I would place the 4-way right next to the player one joystick. And let it share buttons/wiring with that stick. I had it that way on my last cabinet (with less than 1/2" between the bases of the two sticks), and it worked out great.
You could also move the player 2 station over slightly and add a 4-way there as well. There are a few 2-player simultaneuos 4-way games (Hyper Pac-Man is a good one), and most Puzzle games are better with a 4-way (Money Puzzle Exchanger!!!), plus that would keep things looking even.
My advice to everyone is to never skimp when it comes to 4-way sticks. Some of the best games are 4-way and my vertical 4-way cabinet has always gotten more play than my horizontal 8-way one.