NEW YORK - A nonprofit theater selling tickets for just $20 is bringing one of the world's most renowned architects to New York's pricey theater district.

An arts center designed by Frank Gehry and originally intended for ground zero will anchor a new complex including low-income housing, a hotel, a cafe and a bookstore, the city announced this week.

Despite the recession, the $800 million, 59-story Signature Center "is an example of how our city can keep growing," Mayor Michael Bloomberg said at a dedication ceremony for the new home of the Signature Theatre Company.

The project will create 700 construction jobs, added the mayor, who wore a hardhat and surgical gloves to symbolically sink his hands into cement at the construction site on 42d Street and Tenth Avenue.

Amid the clanging noises of nearby traffic and work proceeding above, a jubilant crowd joined playwrights John Guare, Edward Albee and Tony Kushner, and City Council Speaker Christine Quinn. Quinn was instrumental in helping finalize the public-private partnership, which allows 160 of the 800 residential units to be reserved for low-income housing.

Time Warner will subsidize the $20 tickets.

About two-thirds of the $60 million needed for the off-Broadway arts complex already has been raised, with the city contributing $25 million for what Bloomberg called "a world-class performance venue."

Tony Kushner, famed for his Broadway production Angels in America, which explores AIDS, homophobia, religion and politics, was chosen as the featured playwright for the first season.

"The American playwriting community has never been more thriving with talent and interest, and no theater serves our community better than Signature does," said the Pulitzer Prize winner.

Gehry, who was not present at the ceremony, said in a statement that he believes in Signature's "mission of creating innovative theater" and was looking forward to watching the first performance, slated for 2012.

Gehry's work includes dramatic buildings such as the Guggenheim Museum in Bilbao, Spain, and the Walt Disney Concert Hall in Los Angeles. He has been commissioned to design the Philadelphia Museum of Art's planned expansion, and won architecture's top honor, the Pritzker prize, in 1989.

The firm Arquitectonica and architect Ismael Leyva are creating the rest of the energy-efficient center, which is being constructed by Related Companies.

The Signature, a 20-year-old independent theater group, was originally one of four arts-linked institutions considered for the World Trade Center site. Three have moved on. The surviving candidate was an auditorium to be used mostly for dance by the Joyce Theater. Calls to the Joyce and the Lower Manhattan Development Corp., which owns the land, were not returned Tuesday.

The theater company's founder and artistic director, James Houghton, is detailing plans for what he called "a home for many diverse writers to create work that engages even more artists and audiences."

The new Signature, now performing elsewhere on 42d Street, will present the works of major current playwrights as well emerging artists, plus the lifetime achievements of artists from the company's past.