The collapse of the real estate market laid to rest the promise developers held out for the stark neighborhood on the southwestern fringes of Hell’s Kitchen-optimism that coincided with the opening of the Jacob K. Javits Center nearly a decade ago.
Nobody is talking about digging out those old plans for tourist hotels and new office towers, but the area, marked by the West Side Rail Yards and old warehouses-known to some as the Penn Garment Center-is attracting renewed interest because of its expansive, affordable spaces.
In the last year, several large companies, including the New York Daily News, have signed leases in buildings west of Seventh Avenue, between 30th and 34th streets, for rents averaging $10 a square foot less than those in the heart of midtown.
Some real estate brokers compare the area to Park Avenue South, which a decade ago was close to being a left-for-dead neighborhood, but now is one of the hottest office districts in the city. All it will take, they say, is for several more large tenants to move in.
“The area allows a company to still be in Manhattan, on the fringes of midtown, but enjoy the slightly better economies that areas like Long Island City could only offer before,” said Mike Laginestra, a managing director of real estate firm Edward S. Gordon.
“It’s becoming increasingly desirable,” he said, with rents averaging in the high teens to low 20s per square foot. Average midtown rents are about $32 per square foot.
New developments in the neighborhood include:
– The Daily News will move 600 editorial and advertising employees on May 5 into 112,000 square feet on the third floor of the 1.5 million-square-foot, 25-year-old John Hancock building, at 33d Street and Tenth Avenue.
– Health insurer GHI moved the last of 2,000 employees into the 340,000-square-foot 441 Ninth Ave., between 34th and 35th Streets, which it purchased for $31 million. The building, former home to NYNEX, had been vacant for more than a year.
– Renowned architect Robert A.M. Stern is moving move his 75-person firm from West 61st Street to 20,000 square feet in a former manufacturing building on the southeast corner of 34th Street and Tenth Avenue.
– Developer Joseph Gardner and architect Henry Kibel purchased the former YMCA Sloane House, between 33d and 34th Streets on Ninth Avenue, for $425,000 in December. They plan to develop a hotel or apartment house in the 280,000-square-foot site.
– Edward S. Gordon, managers of the Hancock building, are actively marketing 50,000 square feet on the 16th floor to television production companies. The space, ideal for studios because it is column-less, is home to the Sky Rink hockey rink, which is moving this summer to the Chelsea Piers sports and entertainment complex.
In addition, brokers believe the arrival later this year of Kmart’s first Manhattan store in One Penn Plaza, on 33d Street between Seventh and Eighth Avenues, will spur further retail development in the area.
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“I know it sounds far-fetched, but the Ninth Avenue corridor between 34th and 42d Streets could become the next Sixth Avenue. There is lots of parking and available space for billboard stores. All it will take is for one large store to sign a lease, just like Bed, Bath & Beyond did on Sixth,” said Faith Hope Consolo of retail real estate brokerage Garrick-Aug.
Retailers such as Home Depot, BJ’s Wholesale Club and the Price Club have been eyeing sites along Twelveth Avenue, where wide open spaces would allow them to offer parking adjacent to huge superstores, but any development there would be subject to city approval.
While services in the neighborhood are sparse, from banks to restaurants, Frank Branchini, GHI chief executive, believes pioneers like his company and the News will draw other tenants and service companies looking to serve workers.
Stern said as an architect he is bullish on his new neighborhood because “it offers great space with great light.”
As for resturant accommodations in the neighborhood, Stern admitted “it’s bit of a gastronomical wasteland.”