If You Gild It, Will They Come?

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.

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.

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 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.

“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.”

Sahred From Source link Real Estate

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