Latest 'Telecom Hotel' will open on the West Side.

The Durst Organization is planning to get into the hotel business, but companies like the Marriott and Sheraton shouldn't worry about new competition.

The company is planning to build a "telecom hotel" on property it owns on the block bordered by 57th and 58th Streets and 11th and 12th Avenues. It will be the third of its kind in Manhattan -- the other two are located at 60 Hudson St. and 111 Eighth Ave. -- but similar facilities are sprouting up nationwide as electronic commerce continues to flourish. Unlike most developers, who convert existing buildings to create telecom hotels, the Durst Organization plans to build the six-story, 500,000-square-foot facility from the ground up, according to a report in The New York Times.

Thomas Bow, Durst's director of leasing, said the decision to build from scratch was mainly a result of the features of the site.

"We happened to own an 800-by-200-foot site with nothing on it that's worth saving," Bow said. "We had the site long before we had the idea."

Building a telecom hotel would represent a major shift in the focus of the Durst Organization, which recently completed a Times Square office building at 42nd Street and owns a host of other Manhattan properties.

When contacted last week, Bow confirmed the company's plans for the telecom hotel but was reluctant to provide an extensive description of the project. But a zoning change will be needed for the site, from manufacturing to commercial. A portion of the site would remain zoned for manufacturing in the hope of attracting an auto dealership to the first-floor space.

The Durst Organization had acquired a 99-year lease on the land underneath the buildings about a year ago and had notified tenants on short-term, cancelable leases that they would be cancelled. Demolition of the existing buildings on the site is scheduled to begin next June. The new building will be called the NYCyberCenter, according to published reports.

With the explosion of Internet-related enterprise, space to house the equipment necessary to do business is in hot demand. Developers across the country have seized the opportunity to build these facilities, often in former industrial spaces that have become obsolete.

Unlike traditional hotels, telecom hotels do not house people, they house the computerized servers where Internet companies store and manage data. Telecom-switching devices, which route telephone calls between long-distance carriers and local networks, are also kept at telecom hotels. Facilities typically have high ceilings, reinforced floors, and special cooling systems, as well as back-up generators. and fuel tanks.

Real estate developers view the trend as a boon to the industry, because it has given new life to previously undesirable properties. With continued growth projected for Internet-related ventures, experts anticipate little chance demand for the space will cool.

In May, Morgan Stanley Real Estate Funds announced the launching of two companies that will focus on the acquisition, development, leasing and management of telecom hotels. The companies have a total initial capitalization of $1.25 billion. The new companies, MetroNexus and Global Gateway, will serve North America, Europe, and Asia.

Entrepreneurial companies like New York-based Taconic Investment Partners Inc. have been behind initiatives to build telecom hotels. Taconic, formed in 1997, bought a 2.6 million-square-foot office building at 111 Eighth Ave. in January 1998. Since three telecom carriers already had fiber cables wired into the building, Taconic founders Charles Bendit and Paul Praiser decided to market the remaining space to other telecom and Web-hosting companies that needed to connect equipment to the fiber networks. Taconic currently has about 60 telecommunications companies on the premises, said Taconic Senior Vice President Andrew Nick.

"When we bought the building, the telecommunications industry was still in its infancy," Nick said. "There was a small telecommunications presence in the building but our building was well-suited for telecommunications mainly because of the infrastructure."

Although the building has floor-to-ceiling heights, floor loads and column spacing that made it well-suited for conversion, Taconic has spent millions to ensure the building has adequate power, air conditioning, a back-up generator, and other infrastructure necessary to accommodate the increasing demands of telecommunications tenants, Nick said. Where office leases tend to be service-oriented, telecom leases are more technology-oriented, he added.

"If you have a building with good bones, then, with the right expertise, you can convert it," he said.

Some companies, including Taconic, which is developing a 1.2 million-square-foot facility in Chicago, are trying to develop national chains of data centers. Among them are T-Rex Developers of Miami, Young Woo & Associates of New York, DataCetnersNow of Rockville, Md. NeXcomm Capital Partners of Southport, Conn., Markley Stearns Partners of Los Angeles, and Infocrossing of Leonia, N.J.

The Durst Organization's planned hotel will be across 58th Street from a power plant operated by Consolidated Edison and companies that lease space in the hotel will have access to a large power supply, as much as 100 watts per square foot. The building will contain other "equipment-friendly" features like 17-foot ceiling heights and a special mechanical equipment zone on each floor to store air conditioning units, electrical generators, and battery backups.

Other planned features are below-ground fuel tanks to power generators and water tanks for air-conditioning equipment. Three freight elevators with the capacity to lift 12,000 pounds each will be installed and will extend to open on the roof, which will be reinforced to accommodate installation of satellite dishes and other equipment, according to published reports.