Pace of Retail Development Picks Up in Harlem
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There are positive signs in retail and commercial development in Harlem. Essentially no one had any interest in taking a risk in the community from 1911 through the late 1990s. It took more than 30 years for the first supermarket to open in April 1999, when Abyssinian Development, in partnership with the Community of East Harlem Abyssian Triangle, finished the 65,000-square-foot retail center at East 125th Street and Lexington Avenue. It includes a 50,000-square-foot Pathmark Super Center with a branch of Chase Manhattan Bank, a 5,000-square-foot retail store, and a parking garage.
In January, a second Pathmark, 42,000 square feet in size, opened on 145th Street at Bradhurst Avenue. The store is on the ground floor of a mixed-use tower, which houses 126 market-rate limited-equity cooperative residential apartments. The Bradhurst Court Development, a 260,000-square-foot mixed-use building, is on a block bounded by Bradhurst Avenue, Frederick Douglass Boulevard (Eighth Avenue), West 144th, and West 145th streets. The $50 million project is being developed with the New York City Housing Development Corporation and was built through the ANCHOR program, which is administered by the Department of Housing Preservation and Development and the Housing Partnership. The development team includes the Related Companies, Leewood Real Estate Group, and Salama Developing and Consulting. The New York City Investment Fund provided a construction loan.
The Blumenfeld Development Group has spent more than a decade developing a mega-retail site in Harlem. A vice president of the group, David Blumenfeld, said that by the summer of 2007 Manhattan may have its first Costco and third Home Depot at East River Plaza, a joint venture with Forest City Ratner. Other stores may include Best Buy, Gap, Old Navy, and Marshall’s at the site of the former Washburn Wire factory between East 116th and East 119th streets, Pleasant Avenue, and the FDR Drive. About 1,250 parking spaces are planned for the complex. The Upper Manhattan Empowerment Zone approved $15 million in November 2001 to fund construction of the retail center.
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Early next year, the Harlem Auto Mall, which will be the largest auto sales and service center in the city, will open at East 127th and East 128th streets between Second and Third avenues. The site was developed by Urban Strategic Partners and the Potamkin Auto Group. The 280,000-square-foot site will occupy a space just smaller than a city block. The $42 million, three-story mall development will include four General Motors franchises selling Chevrolet, Saturn, Cadillac, and Hummer vehicles. The Cadillac and Hummer franchises will be owned by an affiliate of the Potamkin Auto Group, which also owns six General Motors franchises on Eleventh Avenue. The Chevrolet and Saturn franchises are being developed in conjunction with GM’s Minority Dealer Development Program and will be owned and operated by Otis Thornton, a Buick dealer in East Brunswick, N.J. In March 2004, General Motors issued $17 million in tax-exempt empowerment zone bonds for the development through the New York City Industrial Development Agency. The tax-exempt revenue bonds are secured by rental payment pledges issued to the development agency under a lease agreement with Argonaut Holdings, a subsidiary of General Motors, as well as an unconditional guarantee of payment by General Motors.
Across the street, Urban Strategic Partners, a venture of Grid Properties and the Gotham Organization, are planning for Uptown New York. The multi-block, mixed-use development will contain about 700,000 square feet of retail and commercial space on three levels with mixed-income housing above. There will be parking for about 700 cars below-grade and as many as 300 cars above-grade. A separate underground garage with its own entrance and exit will accommodate storage for 80 MTA buses, replacing the existing surface bus storage lot. Uptown New York is on three contiguous sites, the first of which is located on the southeast corner of East 125th Street and Third Avenue; the second on the entire block bounded by East 125th and East 126th streets and Second and Third avenues, the third on the block bounded by East 126th and East 127th streets and Second and Third avenues. The project could break ground next year and is expected to be finished by 2016. Urban Strategic Partners are the developers of Harlem USA, the $66 million, 285,000-square-foot retail and entertainment complex at West 125th Street and Frederick Douglass Boulevard.
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In a few months, President Clinton will have a new landlord. Cogswell Realty Group recently announced plans to sell the 14-story, 240,000-square-foot office building at 55 W. 125th St., where the former president maintains an office. Cogswell is also planning to sell the six-story, 171,000-square-foot office tower at 215 W. 125th St. According to industry sources, both towers are fully leased and may fetch more than $325 a square foot. The majority of the office tenants in the towers, as well as those in most office buildings in Harlem, are local and federal government offices.
Next year may mark the beginning of construction of hotels in Harlem. In September 2002, Forest City Ratner’s 126,000-square-foot retail and office complex, Harlem Center, opened at 125 W. 125th St. The original plans were for the construction of a hotel. In August 2001, the Upper Manhattan Empowerment Zone had approved $2.75 million to construct the Langston Boutique Hotel, a 73-room hotel at 4-14 W. 125th St. In August 2002, the group approved a new location for the hotel, across the street from its original location, and modified the funding to $6.375 million for a larger hotel of 140 hotel rooms. In January 2002, the New York College of Podiatric Medicine leased its 53,000-square-foot parking lot to Majic Development, which announced plans for a mixed-use development. The development, Harlem Park, would include a 222-unit Marriott Courtyard Hotel. These projects have yet to be built. Nevertheless, by the end of the year, a developer is expected to be chosen for the mixed-use development at the former home of the Loew’s Victoria Movie Theater at 233 W. 125th St., next to the Apollo Theater. Three prominent development groups are the finalists. The development will include a mixed-use hotel, residential apartments, and entertainment and retail space. In addition to the boutique hotel planned for the Victoria site, at least one or two limited-service hotels, possibly including a Hampton Inn, will likely begin construction next year.
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On the site of a former motel that once served as the two-level historic 1926 freight house, a retail, restaurant, and office project is under development at 701 W. 135th St., near the West Side Highway. The site, near the 35,000-square-foot Fairway Supermarket on Twelfth Avenue that opened in 1995, is being converted into six retail stores. Just a block from Fairway, construction is under way for the Hudson River Cafe restaurant. Nearby, the Dinosaur Bar-B-Que is drawing crowds. The new restaurant is at 646 W. 131st St., at the corner of Twelfth Avenue. The Harlem location, which opened on December 1, 2004, has live music on Thursdays, Fridays, and Saturdays. Last Thursday evening, the former front man of the group Lovin’ Spoonful, John Sebastian, performed at the restaurant. The New York City Investment Fund provided capital for the restaurant, which accommodates between 170 and 200.
On June 2, the gourmet grocery Citarella opened a 5,000-square-foot store at 461 W. 125th St., between Amsterdam and Morningside avenues, on a site owned by the Gurrera family, the owners of the company.
Real estate developers and entrepreneurs are extremely active in Harlem. Unfortunately, many community leaders feel Harlem is lacking restaurants and social centers, which are limited by the strong influence of the local churches. I agree with this view. All of the new residential and commercial development, however, indicate a bright future, indeed.
Mr. Stoler is a television broadcaster and senior vice president at First American Title Insurance Company of New York. He can be reached atmstoler@firstam.com.