Kmart opens in One Penn Plaza.

Kmart opened its first Manhattan store on October 2nd at One Penn Plaza, the fifth largest office building in Midtown. Located on the world's busiest retail street, 34th Street, and catty-corner from R.H. Macy's flagship store, the new location is among the retailing giant's largest in the United States.

On hand for the ribbon-cutting ceremony were Floyd Hall, chairman of the Kmart Corporation; Peter L. Malkin, chairman of the 34th Street Partnership Business Improvement District and a general partner of Mid-City Associates, the partnership of Harry B. Helmsley, Peter L. Malkin, and MetLife that owns One Penn Plaza; Charles Gargano, chairman of the Empire State Development Corporation, representing Governor George Pataki: Charles Millard, president of the New York City Economic Development Corporation, representing Mayor Rudolph Giuliani; Mira Graetz-Ball, Regional Manager for MetLife; and Daniel E. North, vice president and director of Management and Leasing for Helmsley-Spear Inc., which manages One Penn Plaza for Mid-City Associates.

Kmart's 145,000 square-foot store occupies portions of the bottom four levels of the 57-story One Penn Plaza, which is situated above the Pennsylvania Railroad at Eighth Avenue and 34th Street. The lowest retail level opens onto the Long Island Rail Road Station Concourse. Kmart's main entrance is on 34th Street, just west of Seventh Avenue.

"The art of the deal was accumulating the 145,000 square feet in the Concourse through the 34th Street ground-floor areas of the building. These spaces were not originally designed to accommodate a single large tenant," said North.

The deal was engineered by North and his associate at the time Fred Posniak, working in cooperation with John B. Trainor, Jr., senior vice president of Helmsley-Spear, Inc. The team created and assembled 32 individual spaces, including six spaces on the ground floor, 11 spaces on the mezzanine below that, and four retail spaces on the recently-renovated LIRR Concourse. Much of the space was occupied, which required canceling some leases with existing tenants and relocating other tenants.

To create enough square footage to make this puzzle come together, North's team also reconfigured some of the building's entrances and corridors which at the time were under utilized since the LIRR had opened its new main entrance and escalators on 34th Street near Seventh Avenue.

"The reconfigured corridors will afford commuters a more direct path to the railroad," North said.

Peter A. Brandenberg, president of Brandenberg Realty Associates, Inc., and Stephen Friedus of Andover Realty, Inc. represented Kmart.

Retailing in the 34th Street area will never be the same. The major shopping area will now extend beyond Seventh Avenue all the way to Eighth Avenue. Kmart, which is among world's largest retailers with over 2,350 retail outlets, and Macy's will make 34th Street and Seventh Avenue the busiest retail intersection in the world. And, with the $315 million reconstruction of the James A. Farley Main Post Office on Eighth Avenue between 31st and 33rd streets, financed with Federal, New York State, and New York City support, the 34th Street shopping district will soon stretch from Fifth Avenue to Ninth Avenue.

Price Costco is building a warehouse store west of Eighth Avenue and renovations are underway at the New Yorker Hotel. A Howard Johnson's Hotel has opened at 34th Street and Seventh Avenue.

The 34th Street Partnership, under the leadership of Malkin, its chairman, and Daniel A. Biederman, its president, is completing a privately financed, $25 million capital improvement plan for the area. The area now boasts new sidewalks, new granite curbs and corners, new lighting stanchions, new crosswalks, new trees and planters, and new traffic signs.

One Penn Plaza is currently undergoing a $85 million program of improvements including all public spaces and mechanical systems. The improvements include the redesign of the 33rd and 34th street entrances, the Seventh and Eighth Avenue plazas, the main lobby, the street level and railroad concourses, all the public corridors, all of its 44 elevators, and its mechanical equipment.