Visions for Harlem's 125th Street getting closer to reality through efforts of rezoning initiative

For many years, major efforts have been made by the N.Y.C. Economic Development Corp., Dept. of City Planning, and Empire State Development Corp. to revitalize Harlem's 125th St. in a way that builds on the thoroughfare's rich history while transforming it into a world-class arts, cultural, and entertainment destination. The pinnacle of these efforts came with the passage of a major 125th St. rezoning initiative 2008. Although development activity was dormant during the recent economic downturn, broader economic growth and a resurgence in the New York real estate market is bringing the ambitious visions of 125th St. closer to reality. From river to river, a slew of diverse residential, hotel and retail projects are now moving forward. The recent sale of the long-stalled development site at 1800 Park Ave. to developer Ian Bruce Eichner for $65 million is a great example of this trend. The new plan reportedly calls for a 596,000 s/f residential tower that would include 600 market rate and 200 affordable apartments. Directly across the street at 81 East 125th St., a $16 million rehabilitation of the historic Corn Exchange Building is scheduled to begin this year. In 2011, NYCEDC selected a developer for the property, which was built in 1883 and granted landmark status by the Landmarks Preservation Commission in 1993. Vacant since the 1970s, the renovated building will feature six additional floors according to landmark guidelines and will include retail and office components. Moving west to Lenox Ave., Wharton Properties is planning a 180,000 s/f retail project at 100 West 125th St. Whole Foods, a supermarket whose appearance has coincided with many other real estate booms in neighborhoods around the city, and Burlington Coat Factory are currently lined up as tenants. The Urban League Empowerment Center is scheduled to go up at 121 West 125th St. Governor Andrew Cuomo and mayor Michael Bloomberg recently unveiled plans to transform the current 42,000 s/f property into a 400,000 s/f complex that will serve as the national headquarters for the National Urban League and house New York State's first-ever civil rights museum, a conference center, 114 units of affordable housing, retail space, and a 225-car public parking garage. Covering the majority of Manhattanville from West 125th St. to West 134th St. between Broadway and 11th Ave., the $6.4 billion, 17-acre expansion of Columbia University is also underway. The future campus will include several new educational facilities, including a new business school and arts center. Renters and buyers expect this expansion to cause major ripple effects throughout Upper Manhattan and this is already translating into climbing rents and building prices. Another major development in West Harlem is the Taystee Bakery Redevelopment at 426-458 West 126th St., between 125th to 126th Sts. Originally a bakery for the Taystee Bread Co., the rehabbed building will contain 280,000 s/fof LEED Silver certified, mixed-use commercial and retail space. NYCEDC selected the developers for the project, which has an expected completion date of 2015. Construction is approaching the final stages at 301-303 West 125th St., a four-story 100,000 s/f shopping center that will house a 30,000 s/f Designer Shoe Warehouse as its anchor, the city's first Joe's Crab Shack, Blink Fitness, and a party supplies store. One-2-Five LIVE at 261-269 West 125th St., a $14 million, three-story retail building is under construction next to the Apollo Theater. The project is located across from Harlem USA, an entertainment complex built by the same development team. Lastly, one of the most anticipated projects getting off the ground is the redevelopment of the Victoria Theater at 233-235 West 125th St. Current plans call for the façade of the theater, which was built in 1917, to be preserved with two towers rising on top—a 210-room hotel and a 206-unit residential building. The Empire State Development Corp. selected a developer for this project, which was halted during the economic downturn but is expected to break ground in 2013. While comparable sales remain scarce, owners of properties along 125th St. should expect very strong interest and pricing as or more aggressive than the 2007 peak. Owners of properties located just off 125th St. can also expect positive spillover effects as outdated buildings come down and are replaced by new structures paying record rents. Several offerings we're marketing along 125th St. and nearby are a testament to this trend and the corridor's tremendous upside. Currently, we're seeing interest in both a multifamily building we're marketing just off of the Columbia University expansion and a joint venture opportunity located across the street from the Apollo Theater at 256 West 125th St. Ariel Property Advisors recently published 125th St. Corridor Developments, an illustrated guide to the major projects that have been completed or are still in the development stage on the thoroughfare. For a copy of the report, please visit ariepa.com/research. Michael Tortorici is a VP at Ariel Property Advisors, New York, N.Y.