Google announced Friday that it will relocate its Ann Arbor offices to a larger space a few blocks from downtown and closer to campus.

The company plans to establish an office of AdWords – the company’s advertising division – into an 80,000-square-foot space in the McKinley Towne Centre at 401 E. Liberty St. this March.

Google has committed to the space for four years, The Ann Arbor News reported.

The company announced it would open an AdWords office in Ann Arbor. It is expected to hire 1,000 people locally over the next five years.

The company has been operating out of a temporary 7,000-square-foot office on South Main Street above Vinology Wine Bar since September.

The McKinley Towne Centre office will expand the company’s presence in Ann Arbor, but the space will not be Google’s permanent home in the city.

The company is describing the move as its second phase of expansion.

City Council passed a resolution on Sept. 5 encouraging the company to keep its offices downtown and offering support setting up the headquarters.

City officials have offered the company 200 free parking spaces in city-owned lots. The spaces are worth an estimated $1 million for four years, The Ann Arbor News reported.

Although the city owns the lots, the Downtown Development Authority maintains and sets parking rates. This has generated confusion as to how to follow through on the pledge, with some questioning the city’s right to offer the parking spaces.

City Council member Joan Lowenstein (D-Ward 2) said she expects the issue to be resolved soon.

While in the McKinley Towne Centre, the company expects to expand from between 70 and 90 local employees to 300 or 400 local employees.

The McKinley Towne Centre has 50 parking spaces, which Google would share with other businesses.

Lowenstein said the parking Google is asking for is a necessity. She added that the company is not asking the city for tax abatements.

“The city of Ann Arbor will be able to benefit from the taxes they will bring,” she said.

Google has deep ties with the University. University President Mary Sue Coleman told The Michigan Daily in July that Google co-founder and alum Larry Page had first hinted about his plans to bring Google to Ann Arbor when she visited him in California a few years ago.

The University is also one of a handful of colleges working with the Google Book Project to digitize its library collection. The project aims to digitize the entire collection by 2010.

Google Book Search lets students comb the full texts of books in the public domain or materials that aren’t copyrighted online through or through the University’s Mirlyn catalog.

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