East harlem' s gateway building searching for office tenant.

The Gateway Building, a project seen-as vital to the future development of East Harlem, is looking for an office tenant.

"This is a real exciting project for Upper Manhattan," said Terry Lane, director of the Upper Manhattan Empowerment Zone. "It's a central part of our East Harlem strategy.

The 3-story, 39,000-SF mixed-use building on the corner of 125th Street and Lexington Avenue is already home to a Duane Reade pharmacy on the first floor and a Seamens Furniture showroom on the first and second floors. It is being developed by 125th Street Gateway Ventures LLC, whose partners include ddm development and services and Communecon Group.

Developers are trying to find a tenant for the building's third floor which has 15,650 SF with wide column spacing and 16-foot slab to slab ceilings. G.E. Grace & Company, Inc., the exclusive leasing agent for the building, is hoping to find a single user to sign a 10-year lease for the space at $28 a SF. It is being shown as raw space, but a $20 per SF work letter is included, developers said.

"We've had a lot of activity from non-profits and from other companies that want to have a presence in Harlem," said George Grace, of G.E. Grace & Company. "It's a market that's largely untapped and companies see an opportunity here."

In the slow economic times, some companies currently located in Midtown are considering Harlem because of the cheaper rents and other government-sponsored incentives such as the city's Relocation Employment Assistance Program, the state's Empire Zone program and the federal empowerment zone program.

"A tenant can receive up to $6,000 per employee in annual wage tax credits, plus substantial sales tax reductions, low cost power and even direct financial assistance in establishing high-speed Internet links," said Nina Demartini-Day, a principal of ddm development and services.

The Gateway Building, which is next to the mixed-use Gotham Plaza under construction and diagonally across from the Pathmark Center, is. the latest development in what many view as a Harlem renaissance. While retail development has been strong in the area, office development has been slow to follow suit. Also, much of the development has taken place on the west side of Harlem and officials are hoping to bring more development to the east.

Developers, brokers and others are hoping for the kind of "critical mass" necessary to turn the once blighted neighborhood into a bustling commercial center.

"We're trying to extend the boundaries of the pedestrian traffic from the west," Lane said. "This is the lynchpin project for making this happen."

Demartini-Day said the company has completed $160 million in Harlem development over the past decade but the Gateway building is its first commercial development.

"There's a lot of buying power in the community that's not served," she said. "But it's still a challenge to get tenants up here."

The building was designed by the New York architectural firm Warren Gran & Associates and features glass and lightweight steel panels. An off-center core houses the building's elevator and stairs.

"The Gateway Building is unique in its timing to the market and in the special niche it establishes in the Harlem real estate market," said Michael Dirzulaitis, principal of the Communecon Group. "The space is open and bright with the. high ceilings associated with the 16-foot-high ceilings usually found only in the lower Manhattan loft market."