 |
 |
 |
 |
 |
 |
 |
 |
Shopping Centers Today -> December 2000
 PRINT THIS STORY: |
  CHANGE TEXT SIZE: |
Street of dreams
BID paves the way for retail transformation on 34th Street
By Kimberly Pfaff
 |
 |
| In the ’80s, 34th Street was home to a string of low-end shops. Today, it’s a thriving retail thoroughfare, with chains like Old Navy. |
 |
| More than $2 million was spent to renovate two small parks near 34th Street. |
Once largely the domain of local, low-end retailers and street vendors, it’s now a veritable fashion destination, home to Banana Republic, Aldo Shoes, Steve Madden Shoes, Old Navy, Skechers and Zara, among others. The stellar names set to line the street by year’s end include French cosmetics firm Sephora and Swedish clothier H&M.
What’s spurring this revival? District cleanup efforts and high revenues from the new arrivals have had an impact; and as development moves further west along 34th Street in midtown Manhattan, other retailers are seeking to move in now, before prices rise. And they’d better hurry; industry sources say retail rents have already skyrocketed to about $250 to $300 a square foot for stores near Fifth Avenue, and as high as $200 a foot as far west as Eighth Avenue.
One group that’s worked to spearhead this revival is the 34th Street Partnership, a business improvement district (BID) — one of several in New York City — that operates a multipronged approach of marketing, area cleanup and security, and publicizing the district’s many benefits for retailers. Established in 1992, the nonprofit organization has an annual budget of $7.8 million. About $7 million comes from a mandatory special assessment that New York City collects from the district’s business owners. “We’re not a voluntary membership organization, or a merchants’ association,” said Dan Pisark, vice president of retail services at 34th Street Partnership.
With tourist draws such as the Empire State Building and Madison Square Garden flanking the area, not to mention daily commuter traffic from Penn Station (see story, page 38), 34th Street might have always seemed a natural retail destination. But by the 1980s, the area was in decline; for years, the only nationally established stores on 34th Street were Macy’s and B. Altman’s, which closed in 1989.
“When we started, the area had really slumped. There was a sense that 34th Street was on the skids,” recalled Pisark. “It had all the vestiges of urban ills, from disorderly behavior and street crime to filth, litter, illegal vendors selling counterfeit merchandise, and food vendors competing with legitimate people. There was a feeling that the place was out of control.”
The partnership put a uniformed security force on the street, and added private sanitation employees to remove graffiti and keep the sidewalks clean. Since 1991, crime in the area has dropped more than 60%. Once the security and crime issues were addressed, the group concentrated on upgrading the low-end retail offerings, and trying to attract retail leaders. “There were many pockets that were pure retail chaos,” said Pisark.
By the mid ’90s, specialty stores began arriving and today, the change is rapid.
Vornado Realty Trust, Saddle Brook, N.J., is the largest property owner in the district, with a critical mass of 7 million square feet of retail and commercial space between 32nd and 34th streets, along Seventh Avenue. Among the firm’s plans are to extend the street-level retail space at Two Penn Plaza out to the sidewalk on both sides of the Penn Station entrance, creating a combination of shops and restaurants. Construction is expected to begin in 2001 and last about two years. Vornado will also renovate the Pennsylvania Hotel, located across from Penn Station, and upgrade the property’s street-level entertainment retail space.
“The plan for that entire area is to create a retail entertainment district,” said Randy Brandt, a principal of Gordon Brandt Ltd., the exclusive retail development and leasing consultant for Vornado’s Manhattan properties. “Right now, there’s a lot of fast food and properties there that only take advantage of the commuter traffic. We think there’s much more of an opportunity with the other markets that are there.”
With the recent news that Stern’s would vacate its anchor spot at the 11-story Manhattan Mall, owner Argent Ventures has announced a makeover of the 1.1 million-square-foot retail center at Broadway and West 33rd Street. The firm is seeking upscale specialty stores, eateries and office tenants, and plans to separate the eight-level Stern’s property into multilevel spaces.
Recently, another prime spot became available: The 70,000-square-foot Toys ‘R’ Us store in Herald Center, located at the corner of 33rd Street and Broadway. Robert K. Futterman & Associates is the exclusive leasing agent for the property.
While CEO Robert Futterman noted that the multilevel space can’t be divided into several separate parcels, he said there had been “enormous interest” in 50,000 square feet from apparel and hard goods retailers, bookstores, consumer electronics chains and specialty retailers.
Futterman said he believes a tenant will be signed by the end of the year. The space will be available in May, which would likely mean a fall 2001 opening for the new tenant.
“What I’d like to see there is a Crate & Barrel,” said Futterman, “someone who could complement Macy’s, something better suited to what I see as a revival to that neighborhood.”
Westward ho!
Not too long ago, the 34th Street district essentially ended at
Seventh
Avenue; now it’s on a course of westward expansion. J.D. Carlisle Development Corp. is developing a major mixed-use property on 34th Street between 8th and 9th Avenues, across from the recently renovated New Yorker Hotel, now a Ramada Inn & Plaza.
The building will feature a 250-lot public parking garage on the lowest level, 86,000 square feet of office space on the concourse and second floors, and 25,000 square feet of retail on the ground floor. Situated above will be a 3,000-seat, 14-screen Loews multiplex, topped by 333 residential rentals. The entire project is expected to be complete by August 2001.
“We believe that the far west side is the next frontier for development,” affirmed John Porges, vice president, J.D. Carlisle Development Corp. “Thirty-fourth Street is a critical artery that lends itself to retail. It’s a dynamic, vibrant area with great traffic.”
Dan Biederman, president of the 34th Street Partnership, also believes that Amtrak’s high-speed Acela train, slated to debut at Penn Station by the end of the year, will prove a boon to the district. “Look at the timetables — anyone who’s got an office in the 34th Street district can get to anywhere else along the Northeast Corridor rail line in two-and-a-half hours, some in half an hour,” he said. “The Amtrak high-speed rail will be so important, within 10 years, there’s the possibility of another 5 million square feet of office space in the area.”
Still, despite all its successes, one of the partnership’s as-yet-unrealized goals is to attract more restaurants to the area. “It’s probably the No. 1 question I receive in the course of a year: Where are the restaurants, why aren’t they here?” said Pisark. “It remains a mystery to us.”
Dan Biederman, president of the 34th Street Partnership, also believes that Amtrak’s high-speed Acela train, slated to debut at Penn Station by the end of the year, will prove a boon to the district. “Look at the timetables — anyone who’s got an office in the 34th Street district can get to anywhere else along the Northeast Corridor rail line in two-and-a-half hours, some in half an hour,” he said. “The Amtrak high-speed rail will be so important, within 10 years, there’s the possibility of another 5 million square feet of office space in the area.”
Still, despite all its successes, one of the partnership’s as-yet-unrealized goals is to attract more restaurants to the area. “It’s probably the No. 1 question I receive in the course of a year: Where are the restaurants, why aren’t they here?” said Pisark. “It remains a mystery to us.”
One restaurant group that has settled into the area is Manhattan-based Restaurant Associates. Earlier this year, the firm opened another branch of its successful Cucina & Co. in Macy’s Cellar. And in September, the firm opened Nick & Stef’s, a steakhouse, in Four Penn Plaza by Madison Square Garden.
“The entire area has undergone a remarkable renovation and upgrade, and we wanted to become part of it with the right opportunities,” said Bill Post, president of the restaurant division at Restaurant Associates. “With Nick and Stef’s, we’re at the ground level of Madison Square Garden, and we’ve got street-level visibility, so it’s the best of both worlds. You can capitalize on all the events that take place at the Garden, plus you’ve got the local business clientele.”
Pisark noted that while the BID welcomes retailing big guns like Old Navy and Sephora, it remains committed to smaller, independent retailers. “The small independents give the district a special flavor and character, and we don’t want them to go away,” he said.
To keep these stores competitive, the BID launched the “Savvy Store” program, which offers small retailers free, personalized consulting on merchandising, operations and service issues. Recently, the group offered to replace stores’ solid metal security gates with the see-through, latticed metal kind found in upscale shopping areas.
Today, the partnership’s focus is also on quality-of-life issues. “We’ve invested millions into improving the amenities in the district,” said Pisark. “The shopping experience and the amenities are inextricably linked. In that respect, we’ve definitely learned lessons from shopping malls.”
As a result, pedestrians now find the streets lined with trees, sidewalk planters and hanging flower baskets. The Partnership has added new directional signs, added sidewalk benches, and even replaced the city light poles with distinctive fixtures featuring white metal halide bulbs.
In addition, the group spent over $2 million renovating the area’s two run-down small parks, Herald Square and Greeley Square parks, with movable Parisian chairs, lush flower gardens and special events. New additions will include a European-style newspaper kiosk and cafe, and — a true rarity in Manhattan — a public toilet.
Also helping matters has been the Department of Transportation’s recent move to ease the traffic chaos at the corners of 34th Street and Broadway and Sixth Avenue, and provide more pedestrian space for shoppers.
“We’ve changed our marketing campaign,” said Pisark. “A few years ago, we were saying ‘The street has turned around, don’t think of it as it was in the ’80s and early ’90s.’ But that’s an old campaign. Now we don’t have to convince people the area’s changed — we just have to tell them that for smart retailers, it’s the place to be.”
 | Current Issue November 2008 |