Hotel Builders Find Space at City’s Fringes
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

Governor Pataki, Mayor Bloomberg, and business and community leaders are expected to gather this morning for the official groundbreaking celebration for Harlem Park, an office, retail, hotel, and residential development to be constructed at 1800 Park Ave. at 125th Street.
On November 10 of last year, the City Council gave final approval for the 453-foot-high complex to be built on a 53,000-square-foot parking lot owned by the New York College of Podiatric Medicine.
The final phase of the development will include a 222-unit Marriot Courtyard on 11 floors, with two floors of retail, 15 floors of commercial office space, 100 residential apartments on 12 floors, and underground parking accommodating 300 vehicles. According to industry sources, financing has not been finalized for the $200 million mixed-use project.
As I reported in the fall, the New York City Industrial Development Agency Board agreed in October to provide the developer with sales and real estate tax benefits totaling $8.5 million. The chairman of the Industrial Development Agency, Andrew M. Alper, said, “The $200 million project will create 1,500 new jobs and offers needed office space in an area that continues to grow as one of New York’s emerging business districts.” The project is also eligible for the Industrial and Commercial Incentive Program and Empire Zone assistance.
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The former home of the Loews Victoria is a few blocks away in central Harlem. In 1925, the 2,394-seat Loews Victoria, also known as the Loews 125th Street, opened its doors at 233 W. 125th St., next to the famed Apollo Theater.
Seven teams of developers are reportedly interested in developing the site as a mixed-use hotel with residential, entertainment, and retail space. The majority of these developers have extensive experience in completing mixed-use developments in the city. They include Apollo Real Estate Advisors, Starwood Hotels, RD Management, Full Spectrum, W Hotels, and Thor Equity.
The New York Sun has learned that there is a possibility that one of these two developments may secure Liberty Bond Financing.
Under the Liberty Bond program, up to $2 billion of bond financing can be allocated outside of the Liberty Zone. Liberty Bond financing outside of the zone has been approved by the NYC Industrial Development Agency for $650 million of bonds for the office building called One Bryant Park at 42nd Street and Sixth Avenue, an $80 million office building at 535 W. 18th St., and $113.9 million for the Atlantic Terminal in Downtown Brooklyn.
The combination of a boutique hotel and the Marriott Courtyard planned for Central Harlem would add about 400 rooms to upper Manhattan. A Manhattan developer of residential housing told me, “As hotels thrive under commercial utilization for business or recreational and social purposes, I question if Harlem has achieved the momentum to carry such projects.” A number of operators of hotels in Manhattan have told me they have confidence that a boutique hotel can be successful in Harlem and question the financial success of the proposed Marriott Courtyard.
Less than two miles from these sites is the former site of a car wash and gasoline station on First Avenue and East 92nd Street. This spring, a Chicago developer, John Buck Co., is scheduled to complete a 32-story rental apartment building known as First Avenue Tower. The tower will have 196 apartments, of which 20% will be reserved for rental to individuals earning less than 60% of the area median income. The Sun has learned that the residential tower is under contract of sale to UBS Realty Investors for $97 million.
Adjacent to the residential tower, John Buck & Co. and its majority partner, Madison Equities, are developing a 15-story, 226-room Marriott Courtyard Hotel. Haves, Pine & Seligman arranged a $47 million construction loan for the development, which will house a 40,000-square-foot private school in the commercial condominium below the hotel. The hotel is scheduled to open later in the fall.
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With the closing of hotels including the Plaza, Mayflower on Central Park, Olcott, Regent Wall Street, Intercontinental, Sheraton Russell, and Empire, the city has lost about 3,000 rooms for conversion to residential condominiums. The weakness of the dollar has prompted more European and foreign travelers to come to New York.
The global industry leader of the hospitality and leisure practice at PricewaterhouseCoopers, Bjorn Hanson, has said, “The lower value of the U.S. dollar relative to the euro has benefited U.S. lodging demand, especially in gateway markets including New York and Washington, D.C.”
The combination of the strong economy, weak American dollar, reduction in the number of hotel rooms, and limited supply of land for development in Midtown has resulted in new construction in fringe areas in all the boroughs.
The chairman of NYC & Company and chairman and chief executive of Loews Hotels, Jonathan Tisch, said, “These hotel developments, in parts of the city that only a few years ago would not have been considered, are a testament to the strength and the importance of the city’s travel and tourism industry.
“These new projects illustrate how the hospitality industry helps revitalize neighborhoods, serves as a catalyst for economic development, and creates jobs and opportunities for New Yorkers,” he added.
The managing partner of the U.S. Tourism, Hospitality, and Leisure practice at Deloitte & Touche, Adam Weissenberg, said, “There isn’t a lot of room to build in Midtown. Hotel developers are seeing opportunities in the nontraditional areas of the city such as Harlem, downtown, and the Lower East Side.”
These new developments can take advantage of the increased demand that is forecast for Manhattan while building in areas where the costs of entry are not as steep.
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One developer from Asia has at least a dozen hotels in various stages in Manhattan, Brooklyn, and Queens. A few weeks ago, he purchased a site on the far West Side where he plans to construct two hotels.
He also purchased another site in the area of the East Village and Union Square, where he plans to build another small hotel. His company is working on developments in SoHo, on West 45th Street off Fifth Avenue, and West 28th Street, as well as the new Hampton Inn on West 31st Street.
Realizing the great demand for hotel rooms in downtown Manhattan, he is developing a site on Pearl Street, one on Maiden Lane and Nassau Street, another on Duane and Church streets, and yet another on York Street and the Avenue of the Americas.
Last month, the groundbreaking ceremony took place for the first Wingate Inn Hotel in Manhattan. A 17-story, 92-room hotel will be built at 233-235 W. 35th St. between Seventh and Eighth avenues.
A number of hotels are opening up on Manhattan’s Lower East Side. After four years, a 22-story, 111-room Hotel on Rivington Street opened its doors this fall at 107 Rivington St. According to industry sources, there is an excellent possibility the property will be sold to another hotel operator or will be converted into residential condominium apartments.
A few blocks away, the Pomeranc family, the owners of Thompson Hotels, are planning to begin construction of a 22-story boutique luxury hotel. In addition to hotel suites, the property will have condo-hotel units and luxury condominium apartments. Construction is scheduled to begin next month with a scheduled opening at the end of 2006.
This coming October, Thompson Hotels plans to open another luxury boutique hotel, 6 Columbus, across from the Time Warner Center. Last month, they purchased a hotel in Beverly Hills, Calif.
Also rising in this neighborhood in a former tenement is an eight-story, 22-room Blue Moon Hotel. The hotel is located at 100 Orchard St., across the street from the Lower East Tenement Museum.
On January 20, the Muss Development Company held a groundbreaking ceremony for the $77 million, 24-story expansion of the New York Marriot at the Brooklyn Bridge, which will get extra retail space and an additional 280 rooms for a total of 656 guest rooms. Muss Development paid $5.2 million to the city for the land on the site, which is adjacent to the hotel.
Hotels are being built throughout the city, with the possibility of a hotel in the Bronx at a site near the proposed new Yankee Stadium.
As long as our economy continues to thrive, coupled with the weak American dollar, and the loss of established hotels in conversions to residential condominiums, the outlook is bright for the hospitality industry in New York City.