Reverse Rejuvenation for Times Square?
When looking at the history of the long building craze in New York City, it's hard not to recognize Times Square at patient zero. This is where overdevelopment began. A neighborhood of low-scale buildings and grunge because the home of Disney, Madame Tussaud's, Planet Hollywood and countless hotels and office towers.
At his point all the glitz and glam and glass feels so permanent and irrevocable. But is it? There's news today that the Virgin Megastore in Times Square will close up shop in February. The giant music outlet was one of the first big arrivals as the area was being transformed in the mid-90s. According to Fox, this is the result of "Virgin’s billionaire balloon traveler Richard Branson quietly leasing the existing 12 megastores to Vornado Realty and Related Properties last year."
Add Virgin's exit to the still-undeveloped-site once occupied by Howard Johnson's, the huge vacant Ollie's space on 44th Street, and the string of closed restaurants and businesses on 45th Street and 46th Street between Broadway and Eighth—still awaiting the construction of a rumored new hotel which never comes—and there are a few missing teeth in Times Square's shiny commercial smile. It's doubtful in this economy that much new is going to happen with these spaces. A couple more significant closings on 42nd Street or the blocks facing Times Square and we may be looking at a new era in the history of the Crossroads of the World.
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From what I hear, Virgin is being closed by Vornado because they are paying $54 psf when the market for the area is $700 psf. The Virgin Megastore is actually being priced out.
This is the kind of "trend" that only someone needing daily copy would identify. CD stores are obviously obsolete, so the Virgin closing has nothing to do with Times Square. The other closings have to do with new business interests. This is creative destruction.
Perhaps, Jake F, but the businesses on 45th Street have been shuttered for more than two years, ditto Howard Johnson's, Ollie's more than a year. And there's no activity. Also, are we sure that there's someone who's going to leap at $700 psf in this economic climate? Real estate people are known to kick out paying tenants in hopes that a higher-paying one will come along. Often, no one comes along for years.
Commercial landlords sometimes would rather keep space vacant than rented out at low rates if they believe market rents are soon going to rise. This way they can move quickly if the rise actually occurs, rather than having to wait for the low-rent leases to expire.
Yes, Peter, I know, and I, quite frankly, deplore that practice as the worst sort of predatory real estate behavior, particularly when it forces out successfully performing businesses to satisfy the greedy prospect of future riches. LeNell's in Red Hook is suffering from just this sort of behavior.
I suppose there can be a bit of cosmic revenge in these situations. If market rents really don't end up rising, the landlord ends up taking a big financial hit.
I'm all for cosmic revenge where landlords are concerned. I'm sure, if Hell exits, there's a special circle there for them. You don't fuck around with people's lodging and livelihoods just to line your pockets. You just don't. Therein lies the innate immorality of the business.
"You don't fuck around with people's lodging and livelihoods just to line your pockets. You just don't."
Don't suppose we could get that on a tee shirt? Seriously, though, it's sad that that principle even has to be stated, but so few people seem to grasp it in today's NYC.
Thanks, Baha. Nice to see someone agrees with my "radical" notion of a landlord's moral duties. Most people look at me like I'm crazy when I say stuff like that. But the thing is, those aren't buildings you own, Mr. Landlord. Those are buildings with people in them.
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