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Shopping Centers Today -> December 2003
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ALL THAT JAZZ
Related Cos.’ Time Warner Center combines retail, offices, condos, a hotel — and Wynton Marsalis too
BY IAN RITTER
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| Photo: Ian Ritter |
The 80-story towers across the street from the southwest entrance to Central Park are no longer new to the Manhattan skyline. But New Yorkers will have to wait a bit longer to see the bottom seven floors of the Time Warner Center, which are to house the 337,000-square-foot Shops at Columbus Circle.
The opening of the retail portion of the $1.7 billion, 2.8 million-square-foot development, built by Apollo Real Estate Advisors and The Related Cos., has been pushed back from its November date. Construction delays at five of the center’s upscale restaurants are largely to blame, says Kenneth A. Himmel, president and CEO of Related Urban Development, a division of The Related Cos. Then a fire broke out in April near the retail areas, in a space that will house a performance hall for Wynton Marsalis’ Jazz at Lincoln Center. That didn’t help.
The developers say it would be better to open the retail area of the project all at once, instead of in phases.
“You only get to open this one time, and if you don’t open it the right way, you’ll never get another chance to make a first impression,” Himmel said. “This is New York. You don’t recover easily from mistakes in New York.”
Some call the project the most significant retail development in New York City in decades. Among them is Robert K. Futterman, CEO of real estate services firm Robert K. Futterman Associates, which has steered Bose, Hugo Boss, Whole Foods Market and other tenants into Time Warner Center.
“It’s probably one of the largest projects the city’s seen since Rockefeller Center was built,” Futterman said, referring to the world-famous Midtown office and retail area that was built in the 1930s. “It’s going to be a great integration of all these different uses in one of the most architecturally impressive buildings the city’s ever seen.”
But retailers are not thrilled about missing out on the holiday season, of course.
“Was anybody happy about [the delay]? Of course not,” said Himmel. “We all wanted to make the Christmas season.” But it’s better to do it late, and do it right, than do it on time and blow it, he says.
“No one takes lightly the sequential opening of a vertical project,” Himmel said. He recalls another upscale, urban, mixed-use project he worked on, Copley Place, in Boston. That center’s opening was similarly delayed, he says, though the impact was minimal in the long run and traffic flow turned out not to be a problem. “If you can’t make a plan and circulation work in a vertical project, you can never recover from that.”
When Shops at Columbus Circle does finally open, it will be home to a mix of upscale boutique stores, and grocery and household tenants.
Whole Foods will open a store on the basement level, its second store in Manhattan; the other is in Chelsea, some 35 blocks downtown. At street level, clothier Joseph Abboud will launch its first New York City store. The flagship unit will join Crabtree & Evelyn, Davidoff cigars, Williams-Sonoma and others there. On the second floor shoppers will find such names as Borders Books & Music, J. Crew and Sephora. A/X Armani Exchange and some restaurants will occupy the third floor, and on the fourth level still more eateries will sit above those. Once inside the building, visitors will be able to look up and see all these floors, thanks to a carved-out open area topped by a glass roof.
The building (called the AOL Time Warner Center until September, when Time Warner dropped the AOL from its corporate title) will house the company’s headquarters and other, non-Time Warner businesses, a 251-room Mandarin Oriental hotel and 191 luxury condominiums, starting at $1.8 million each.
“The center is sure to be one of the most exciting shopping environments in the nation,” said Tamara L. Heim, president of Borders Stores and Borders Online, in a news release.
Still, building a vertical mall in Manhattan is not for the lily-livered, given the challenges that have confronted other multilevel centers there in the past, including Herald Center, Manhattan Mall and others (SCT, April 2003).
“It’s an impressive lineup of retailers, but it’s challenging, because vertical retail has never worked in Manhattan — never,” said Faith Hope Consolo, vice chairman of New York City-based Garrick-Aug Worldwide. “But that doesn’t mean it won’t work. You have a lot of things here that aren’t at other locations. I think if any vertical retailing has a chance in Manhattan, this is the one.”
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Not only will the center be in an area of Manhattan that lacks significant retail, thus attracting local residents, she points out, but the Shops at Columbus Circle will also draw customers from the building’s residential and hotel components.
Consolo speculates that delaying the center’s opening until February probably won’t hurt because that month is the start of another important fashion season. She predicts that the center could achieve sales per square foot of up to $800, compared with $330 for the average U.S. mall. Manhattan Mall’s sales per square foot are $750 to $800, according to its owner, Argent, while Westfield America Trust says sales per square foot were $900 in its Westfield Shoppingtown World Trade Center before it perished in the Sept. 11 attacks.
“Surely they wanted to be open for the holiday season. Who wouldn’t?” said Consolo. “But it doesn’t always happen that way.”
Himmel says the restaurants will be a large part of the Shops at Columbus Circle’s success as a vertical center. Star chefs will be running them, including Thomas Keller, Gray Kunz, Masa Takayama, Charlie Trotter and Jean-Georges Vongerichten. Because all the restaurants are on the upper floors of the Shops at Columbus Circle, diners will pass the stores on their way to and from dinner and, Himmel hopes, do some shopping.
Whole Foods will help bring customers to the stores too, as will the fitness club below it, says Richard Hodos, president of New York City-based Madison HGCD, the real estate services firm that represented Borders, Coach, Cole Haan, J. Crew and Sephora in leasing deals at the development. “The neighborhood will be there on a daily basis,” he said.
But persuading tenants to go into a multilevel project was no morning stroll, Hodos concedes.
“It was extremely difficult,” he said, noting that tenants are notoriously skittish about being above the second floor in developments. “But it made such sense, the way they designed the project.”
The developers and retailers aren’t the only ones convinced that the center will work.
In February Apollo and Related sold a 49.5 percent stake in the Shops at Columbus Circle to San Francisco-based real estate investment advisory firm MacFarlane Partners and the California Public Employees’ Retirement System. The deal was valued at between $425 million and $500 million, though there has been no price finalized, nor will there be until the transaction closes in January 2005.
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