Generous funding renewed 42nd Street.

When completed, the 42nd Street Development Project, one of the largest urban renewal projects ever launched in the country, will seem like an overnight success to the 20 million tourists who visit the Times Square/42nd Street district annually, and 180,000 commuters who pass through this Midtown Manhattan area daily. In reality, it will be the result of more than 15 years of long-term planning by the State and the City of New York and generous funding from local corporations.

While capital and commitment are undeniably two crucial factors in the success of any major urban renewal project, perhaps the most important element is space. The of way to successfully change the character of a neighborhood is to create a critical mass of the type of space that complements or lends itself to the type of development being considered.

In the case of The 42nd Street Development Project, in order to amass enough space, officials, through condemnation, began ridding the area of all pornography theaters and sex shops. Over 13 acres of Midtown will be transformed into a high-tech, glitzy entertainment mecca. The restoration of Times Square's historic, landmarked theaters and the development of a mega-hotel and two retail complexes on 42nd between 7th and 8th Avenues were the first two steps necessary to return the area to its original grandeur.

Disney's commitment to converting the run-down New Amsterdam Theater into a permanent home for it's theatrical and musical productions and the restoration of the Victory Theater by the New 42nd Street, Inc., were the catalysts for a growing number of multinational corporate investors to begin looking into opportunities in Times Square.

With Disney as an anchor, Madame Tussaud's, the renowned London Wax Museum and AMC Entertainment, a movie theater chain, have signed on to develop entertainment attractions in the old theater district. Taking over three adjacent theaters between Seventh and Eighth avenue, AMC and Tussaud's are expected to attract two million visitors per year. Additionally, the Lyric and Apollo (Academy) theaters will be restored by Livent Inc., a Toronto-based theatrical production company, and combined into a 1,850 seat, state-of-the-art musical theater. The Times Square Theater, one of the few remaining theaters without a set future, has been receiving a lot of attention lately. A new use for this property can't be far off.

The final facet is the development of a $303 million hotel and entertainment complex by Tishman Urban Development Corp. on the Northwest corner of 42nd Street. Backed by a $35 million commitment by the City to fund the condemnation of the proposed hotel site at 42nd and 8th, the hotel complex is expected to open by the turn of the century.

There is no doubt that the multi-billion dollar transformation of the Times Square area will be a tremendous boost to the City's economy - generating an estimated $320 million a year in taxes and providing 20,000 jobs. It's been a long time coming, but it will be well worth the wait.

C. BRADLEY MENDELSON Senior Managing Director Edward S. Gordon Company, Inc.