Bertelsmann inks blue-chip tenants for Times Square.

Bertelsmann AG, the $11 billion-a-year worldwide media and entertainment company, has announced that it has signed agreements with three blue-chip clients for the retail space in its U.S. headquarters at 1540 Broadway.

A new 65,000-square-foot Virgin Megastore, which will be the largest music store in the world; a four-screen Sony Theatres complex seating 1,400; and the Official All Star Cafe, a sports celebrity-themed restaurant and bar, will occupy the retail space in the building in the heart of Times Square.

The 44-floor, one million square-foot skyscraper houses many of Bertelsmann's U.S. operations, including BMG Entertainment and Bantam Doubleday Dell publishing.

"We're delighted to welcome the Virgin Megastore, Sony Theatres State and the Official All Star Cafe to Times Square, the entertainment center of the world," said Michael Dornemann, chairman and CEO, BMG Entertainment. "When we moved here last year. we brought 2,000 talented and creative people to the heart of Times Square every day. Now these exciting tenants will add to the energy and excitement already in place in this Cross@ roads of the World."

Said K. Peter Blobel, president of Bertelsmann Property, Inc., "This is further affirmation of what we already knew when we made 1540 Broadway our U.S. headquarters - the Times Square area is back and these tenants will add to the glory of visiting, shopping and working in this neighborhood."

"Our Times Square entertainment complex will be an ideal retail environment for Virgin, Sony Theatres and the Official All Star Cafe, attracting millions of people who come to Times Square each year," said Hans-Martin Sorge, executive vice president of Bertelsmann Inc.

Virgin Megastore

With operations in such cities as London, Paris, Milan, Sydney, Tokyo, Vienna. Frankfurt and Los Angeles, Virgin Megastore is the preeminent retail music and entertainment experience in the world. The Virgin Megastore will offer more than 150,000 music tiles on CD and cassette, in addition to an vast selection of laser disc and home video products, computer games software, video viewing stations, music listening posts, clothing and in-store deejay. The Megastore will also feature a news-stand/bookstore and cafe-style restaurant, and will frequently showcase live performances. The operation, which will be twice the size of Virgin Megastores in Paris, is expected to generate as much as $100 million a year in revenues and employ approximately In people. Virgin Megastores will open its third U.S. Megastore in Sacramento, California, this November, followed by San Francisco in March, 1995. In addition, locations under active consideration include Chicago, Miami, Boston, Minneapolis, New Orleans and elsewhere. Virgin Megastore in the U.S. is a joint venture with Blockbuster Entertainment of Ft. Lauderdale, Florida.

Sony Theatres (formerly Loews Theatres), operates 10 theatres in Manhattan with a total of 35 screens. Nationally, Sony Theatres operates 175 theatres with nearly 1,000 screens in 15 states around the nation.

"We are very excited about opening this state-of-the-art Sony Theatre in the Times Square area," said Sony Theatres Chairman Barrie Lawson Loeks. "Sony Theatres prides itself on offering Manhattan movie-goers the best show in town, and this new location will be a wonderful addition to our circuit,s presence in the city."

Vision for 1540 Broadway

Bertelsmann, Inc. has assumed a role at 1540 Broadway as a visionary developer and responsible corporate neighbor ever since its entry into the New York real estate market with the purchase of the vacant West 45th Street site.

From the outset, Bertelsmann envisioned an entertainment emporium consistent with the traditional show business spirit of the Times Square neighborhood, long renowned worldwide for its gargantuan supersigns, the world@famous New Year's Eve ball lowering, the annual free outdoor "Broadway On Broadway" concert, palatial movie houses and Broadway theaters.

Rather than establish a standard shopping mall - as a previous building owner had originally planned - Bertelsmann elected to create a new concept in urban entertainment. To do so. the company will dramatically reconfigure the 150,000 square-foot space.

Bertelsmann ultimately expects to make further significant investments to improve the interior of 1540 Broadway, once the site of the Loews Theater. Twenty@five thousand square feet of retail space in the building is still available.

Bertelsmann's announcement is another step in the renaissance of the Times Square neighborhood, which has dramatically grown into a center for upscale entertainment. With its renowned Broadway theaters and nightclubs, its hit-producing record studios and more than 200 restaurants dishing out everything from fast food to haute cuisine, this landmark neighborhood stirs the senses - and the sensibilities as well. In recent years, companies such as Viacom have opened offices in Times Square, with Disney among the newcomers expected in the near future. In addition, Morgan Stanley has purchased a new headquarters in Times Square.

"Bertelsmann has quickly become the best neighbor in the |Crossroads of the World'," said Gretchen Dykstra, president of the Times Square Business Improvement District, which represents approximately 5,000 businesses in the district, including 404 property owners.