By Ken Alltucker
The Cincinnati Enquirer

In one of downtown's largest real estate deals this year, AT&T will relocate 400 downtown employees to the 525 Vine Street office tower next to Fountain Square.

AT&T signed a five-year lease to occupy nearly 77,0000 square feet of office space at the 23-story office tower near the intersection of Fifth and Vine streets. The telecommunications giant now rents several floors at Sixth Street's Crowne Plaza.

AT&T scouted several downtown towers before settling on the Vine Street building, purchased in December by Pittsburgh-based McKnight Development.

"The employees are pleased because it's right next door," said AT&T spokesman Mike Puny. "We're looking forward to moving in September."

David Ginsburg, who heads the property services group Downtown Cincinnati Inc., said it's vital that the city's core retain high-wage jobs rather than losing more companies to suburban office parks.

"It's very important for downtown that a tenant of international stature has decided to remain downtown," Ginsburg said.

The Vine Street office space is considerably smaller than AT&T's current 220,000 square feet. AT&T once had more than 2,000 workers in downtown Cincinnati, but moves such as the spin-off of Lucent and AT&T Wireless and the sale of AT&T Broadband eliminated many jobs.

AT&T was Crowne Plaza's sole office tenant. The building's owners plan to upgrade the Sixth Street office building and have hired CB Richard Ellis to recruit tenants. The office space has no windows, and some downtown consultants have criticized the look of the building's facade.

Staubach Co. broker Joe Judge coordinated AT&T's office search. Jay Morey of Duke Realty Corp. represented the landlord.

McKnight Development soon plans to embark on a $5 million overhaul of the Vine Street building that will include building a street-level lobby. The building's lobby now is on the second floor, accessible only by an above-ground skywalk.

E-mail kalltucker@enquirer.com