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Buildings bigger than 1x1 have ONE square of their footprint assigned as the "Main" one. That square is the one which must be at the 5th square from the existing town; you might have to rotate the building to be able to place it on desired location.
=== Growing your city to the "other side of the tracks" ===
However, you can build a chain of city extensions, and these remain functional even if that chain is later broken. In other words, the proximity requirement only applies to ''placing'' these extensions, not having them remain functional once placed. This goes for all extensions, including the "Town grow area" one. What this means is: you could temporarily delete a track square, build an extension (such as a Well or anything else), then building another extension four squares beyond that (on the other side of the tracks). If you then delete the extension in the middle of you tracks and rebuild the track, the extension on the other side of the tracks remain and will be functional. You can surround it with "town grow areas" to encourage the city to grow on both sides of your station. This despite none of these new developments being within at most 4 empty squares from any of the "old city" buildings.
You can even use the Advanced [[Game Settings|game setting]] "Relocate demolished buildings" (if enabled) to 1) build a couple of town grow areas on the other side of the tracks, then 2) raze a couple of existing houses on the old side of the tracks. You will be able to see how the game relocates those demolished houses to the new part of town! Voila: instant development making it look like your station is surrounded by the city on both sides right away, without having to wait for the city to expand!
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