Freedom Tower seen financially stable in 2012

NEW YORK (Reuters) - The New York and New Jersey Port Authority on Thursday formally approved nearly $500 million of construction contracts for the Freedom Tower and projected the building will be financially stable three years after its opening in 2012.

The Freedom Tower is an iconic skyscraper being built on the site of New York's destroyed World Trade Center.

The agency hopes to lease some 600,000 square feet of space to the federal government, a lease that could be signed within a year, Michael Francois, a staff official with the agency, told the Port Authority board. About 400,000 square feet of offices should be leased to New York State, with documents signed this quarter, the official added.

Whether the Freedom Tower would even be built or be redesigned became an open question when New York Gov. Eliot Spitzer took office in January because he had called it a "white elephant."

But the New York and New Jersey governors on Tuesday said they were committed to building the 1,776 foot (541 meter) Freedom Tower in its current design. It is the centerpiece of the rebuilding of the World Trade Center site after the September 11, 2001 air attacks.

Real estate firms and hedge funds have expressed interest in buying the Freedom Tower. The agency's executive director Anthony Shorris later told reporters the full gamut of privatization options will be explored, from leasing floors to dozens of tenants to selling the building to investors.