March 24, 2019

facebook twitter linkedin tumblr google pinterest

If You Gild It, Will They Come?

If You Gild It, Will They Come?
Spread the love


On Friday, the Shops & Restaurants at Hudson Yards will open, the culmination of more than a decade of planning, strategizing and developing, and New York City will have the newest, shiniest, largest expression of what we used to call a “mall.”

Glide, if you will, up its escalators and you can get a manicure-mid-meditation at Sundays or an $800 haircut at Sally Hershberger, dip into a new-concept Zara or the first “offline” store from the e-tailer Mack Weldon or Rolex or Cartier. Spin through the first New York City Neiman Marcus or its kookier neighbor, Forty Five Ten, a fellow Dallas retailer with outposts in Miami; Aspen, Colo.; and the Napa Valley of California.

Stay for lunch — chicken fingers (at Momofuku’s Fuku) or high-end Korean-inflected cuisine (at Momofuku’s Kawi), Shake Shack or the newest Thomas Keller restaurant — and a restorative 10-minute siesta in a Provençale-scented aromatherapy room at the Conservatory, a new store offering a little bit of everything (including Provençale-scented siestas). Hit Lululemon, Tory Burch and, what the hell, Sephora, and now it’s time for dinner. Won’t you stay?

Hudson Yards hopes you will. If you need, the first Equinox Hotel awaits just outside. Rooms start at $700 a night.

The retail center, all one million square feet of it, is the shopping, dining, pampering hub of Hudson Yards, the largest wholesale innovation to the New York landscape in years. It is nothing less than a full neighborhood developed by Related Companies, the mega-developers run by the billionaire Stephen M. Ross, in a joint venture with Oxford Properties Group. (Related also owns Equinox.)

Built over 28 acres and atop still-active train yards, Hudson Yards runs from 10th Avenue to 12th Avenue, and 30th Street to 34th Street. (The Hudson Yards district is zoned as far east as Eighth Avenue and as far north at 42nd Street, so it will grow.) It includes office towers and residential towers, a new performance space (the Shed), a giant new piece of public art (the Vessel), a public square and garden, and this retail center.

Kenneth A. Himmel, the president and chief executive of Related Urban, who oversaw the project, is a veteran developer of mixed-use developments, including Water Tower Place in Chicago, Copley Place in Boston and the Time Warner Center at Columbus Circle in Manhattan. They all pale before the scope and ambition of Hudson Yards.

“This one,” Mr. Himmel said, “we knew was the mother of all mothers.”

When all is said and done, Hudson Yards will be home to L’Oréal and Warner Media and the Tapestry brands (Coach, Kate Spade and more); to Boston Consulting Group and the global investment firm KKR and Point72 Asset Management (Steven A. Cohen’s investment firm). Current listings for available residences at 15 Hudson Yards include a $4.315 million two-bedroom apartment and a $32 million penthouse. The Shed will have diverse programming, including Björk and Boots Riley. New York Fashion Week is in discussions to move there as well, as soon as September.

If the new neighborhood, as Related is marketing the development, were a country, a tour guide chirped a few months back in the company’s 360-degree multimedia presentation center, it would have a gross domestic product comparable to Iceland’s.

At opening, the retail center will be 90 percent leased, with 100 stores and 25 restaurants, from fast-casual to fine dining, hoping to draw customers not only in but up to scale its gleaming heights. (A 35,000-square-foot “Spanish food experience” by the chef José Andrés is just outside.)

When the retail complex is fully open, Related projects that it will see 60,000 visitors per day. It has designed the center for frictionless ease, to float between floors with minimal effort, and slide from well-known brands to first-time bricks-and-mortar retailers plucked from the direct-to-consumer e-tail boom on its Floor of Discovery.

Still, Mr. Himmel acknowledged, there is always the question: Will it work?

“When you throw a big party, you send out 200 invitations and hope that 150 people come,” he said. “We think we’ve cast the net out to thousands and thousands of people who are going to enjoy the project. But you always hold your breath.”

One reason for that is that malls — “vertical retail,” in industry parlance — are a tricky and often unsuccessful proposition in New York City, where shopping is typically integrated into the cityscape, on sidewalk thoroughfares like Fifth and Madison Avenues, or shopping districts like SoHo or NoLIta.

Recent years have seen an influx of vertical developments, including Brookfield Place and the Oculus downtown, both of which have struggled. In January, Saks Fifth Avenue, one of Brookfield’s anchor tenants, closed its 86,000-square-foot women’s store after a mere two years.

Vertical retail and indoor malls are “two things New York City has never embraced,” said Arthur Maglio, the leader of the Faith Hope Consolo team at Douglas Elliman Real Estate, who had a few clients interested in Hudson Yards spaces. He cautioned, though, that Hudson Yards didn’t have a direct parallel to earlier attempts.

“It’s really at the forefront of where malls are heading,” he said. “On a macro level, the mall at Hudson Yards is pivotal for retail.”

One of the few successful malls in Manhattan is a Related property, the Shops at Columbus Circle at the Time Warner Center, anchored by a Whole Foods and an Equinox gym below street level and tethered to high-end condos above.

“People said vertical retail wouldn’t work in New York,” said Webber Hudson, an executive vice president at Related Urban. “We were able to prove them wrong.”

But Related has had to contend with the lingering sense that New York is not a mall town and that Hudson Yards, the fantasy of one developer more or less magicked out of nothingness, is somehow “not New York.”

“I used to go to Dubai a lot,” said Sally Hershberger, whose salon is on the ground floor of the complex. “This is really Dubai for me, but better, because I can walk there. I don’t have to schlep all the way to Dubai to get that kind of energy.”

That energy is not necessarily a point of pride in a pedestrian’s paradise like New York, which has a certain satisfaction in its cheek-by-jowl mix of glamour and grit. Architectural innovations at Hudson Yards, like the setting back of certain floors, serve specifically to give a sense of streethood. All it takes, Mr. Hudson suggested, is a slight renovation of expectations.

“It’s just like any street,” he said. “It’s just that our sidewalk runs vertically through the project.”

Related hopes Hudson Yards draws huge crowds of visitors, locals and tourists alike. The developer is keen to point out that it has two major streams of easy access: the 7 subway line, which the city extended in 2015 to the development’s doorstep, and the High Line, a tourist magnet that sees some seven million visitors per year and likewise spits out its strollers at Hudson Yards’ feet.

But the complex’s greatest advantage may be the tens of thousands of people who will live and work on-site. When the development is complete, it will comprise more than 18 million square feet, with 4,000 residential units and businesses expected to bring 55,000 workers to the area, providing a captive audience: Some of the buildings will open directly onto the mall’s key floors.

Brian Bolke, the founder of the Conservatory, a new store attempting a showroom-style, inventory-less model, said he was initially uninterested in pursuing a lease at Hudson Yards.

But one of the key draws, he decided, was what he called “the extraordinary relocation of the corporations that moved down there.” Many of the new tenants, including Neiman Marcus and the Equinox Hotel, described robust plans already in the works to market to those living and working in Hudson Yards.

It’s a symbiotic relationship. The new employees and residents patronize the stores, and the stores serve the new employees and residents, who are relocating to an area of Manhattan as yet underserved, even largely unknown.

“It’s literally a neighborhood that nobody’s ever been in,” said Daniel Arsham, one of the principals of Snarkitecture, the architecture and design practice that is opening Snark Park, a ticketed, immersive and Instagram-friendly art installation. “I was in Detroit last week and trying to explain to people where this physically sits and nobody has any reference for the area.”

The main profit driver of large, mixed-use developments like Hudson Yards are condo sales, which are a harder multi-million-dollar sell in an area without conveniences, as Hudson Yards pre-Hudson Yards mostly was.

Retail “almost becomes an amenity,” Mr. Maglio said, though he cautioned that the retail isn’t forgotten. But because Related needs these merchants as much as it needs their rents, it incentivized their deals, as is standard practice, and in some cases invested in their businesses.

“Innovation requires investment,” Mr. Hudson said when asked. Ms. Hershberger confirmed that the company had invested in her salon. “They made it nice for me, put it that way,” she said.

Related may have made Hudson Yards nice for some of its tenants, but the early reaction to the project has much to do with how nice New York City made with Hudson Yards. Related won development rights for $1 billion in 2008 after the city and the Metropolitan Transportation Authority solicited bids. It has since received tax breaks and incentives, which, when coupled with the city’s extension of the 7 train, add up to nearly $6 billion in government assistance, according to research out of the New School.

Critics complain that these tax breaks favor billionaire developers, corporations and luxury buyers, not everyday New Yorkers. New York magazine recently illustrated a diamond-encrusted Hudson Yards on its cover, calling it “a billionaire’s fantasy city.”

Lynne Sagalyn, an emeritus professor at Columbia Business School who has written on redevelopment, dismissed questions of seemliness.

It is clear that given the city’s budget and constraints, development of the site, including the building of the platform over the train yards, would require private-sector investment, Dr. Sagalyn said, for which it would have to give incentives. (Dr. Sagalyn is a board member of Blackstone Mortgage Trust, which provided a loan for the construction of the Spiral, a new office tower in the Hudson Yards district.) “Gauging the magnitude of the subsidies is the right question,” she said. “Did they give away the store?”

Proponents of the development say that the area will generate jobs and property taxes that will benefit the city for years to come, and that New York needs to change with the changing times.

“I worked in New York in the early ’80s,” said Chris Norton, the chief executive of Equinox Hotels. “You wouldn’t go down to that part of town. It was nothing.” What makes New York great, he said, is its continual reinvention.

“If you’re looking to continue to see New York develop and see new things happen, I don’t know if there’s many ways to do it besides vertically,” said Joe Cole of Forty Five Ten, who designed the space with his wife, Kristen Cole, its president and chief creative officer. “It feels like the future.”

Geoffroy van Raemdonck, the chief executive of Neiman Marcus, echoed the sentiment. “We look at this neighborhood as being the next generation,” he said.

Neiman Marcus already does significant business in New York: $100 million in online sales in the New York area in the 2018 fiscal year, Mr. van Raemdonck said. But the Neiman Marcus at Hudson Yards will be the first in New York City, and Hudson Yards’ largest store, encompassing three floors and including two restaurants, a bar and an education and event space.

“There were many opportunities that passed and were not chosen,” he said. “This felt like something we couldn’t miss.” Related and its new tenants are hoping that shoppers won’t be able to miss it, either.

“I would be very hesitant to project how it’s going to do,” Ms. Sagalyn said. “I think people will go over there just to see it — it’s a new part of the city. But how many people return and return there to shop? We’ll see.”

The condos at 15 Hudson Yards are already 60 percent sold, and Related will begin selling 35 Hudson Yards, with 143 residences and prices beginning at $5 million. More office towers will begin construction soon. According to recent transplants, the neighborhood is coming to life. Nick Wooster, a veteran retail executive and longtime resident of the West Village, moved in three years ago.

“I do understand that what makes New York New York is not necessarily this,” he said, but New York’s days of wearing its grit and discomforts as a badge of honor may be behind it. And in any case, far from living at the ends of the earth, Mr. Wooster is on 10th Avenue.

“I do not delude myself into thinking that I live in the Village,” he said, “but it doesn’t feel as disconnected.”

About the retail center’s prospects, he was sanguine. “This is what I believe about today: All bets are off. The rules that we knew 30 years ago don’t necessarily apply.”

Asked about how to keep Hudson Yards humming well into the future, Mr. Himmel said it would now be up to his tenants to draw their customers.

“We’ve done everything we possibly can to set the stage for this,” he said.

In any case, the architect of the mother of all projects is ready to begin work on Related’s next project, in Silicon Valley.

“We have full approvals, 100 percent green light, to build over 12 million square feet of mixed-use,” Mr. Himmel said. “We don’t have to go up. We don’t have to combine all these uses in the same building. We’re going to do a street scene.”



Source link

More from my site

About The Author

Related posts

Leave a Reply