Retailing boom will continue in 1997.

New York City can't have anything but a great year in 1997, as far as retailing is concerned. Retailers and major corporations continue to want to locate here, to expand the presence of their various divisions. That, coupled with the unbelievable bull market that we're seeing on Wall Street, means that Manhattan's tied up with a big red bow, with lots of people tugging at the ribbon.

Retail space is getting tight, but that just forces brokers to be more creative in their deal-making. Anyone who wants badly enough to get in, is going to get in.

The trend that came out of 1996, and which will continue into 1997, is that the luxury market and the power of the luxury labels will remain supreme. People not only want nice things; they also want to buy them at exclusive shops. This desire has made retail space on Madison and Fifth Avenues, and on 57th Street, more valuable than ever. The vacancy rate there is nearly zero, and this has driven up rents by about 20 percent in those areas.

Stores with brand-name attraction aren't confined to those neighborhoods, though. The Disney Store is doing just fine, on Times Square and elsewhere; so are other mid-priced but youth-oriented chains such as Levi's, Swatch and Athletes Foot.

Then there's the superstore craze. More and more retailers are operating on the principle that "bigger is better." If they already have 10,000 square feet in Manhattan, they want 20,000; if they have 25,000, they want 50,000 - and if they're not in New York at all, they want to start right out with 100,000 square feet, just to make a tremendous statement. Although I wonder just how many of these huge stores the market can support, I think it's inevitable that we'll see a few more of them in the next couple of years, in Manhattan and in the outer boroughs.

Borders Books and Computer City are coming in to knock heads with Barnes & Noble and Comp USA, respectively, and those should be a couple of interesting struggles!

The big story on 1997 is that we're seeing new construction of residential space and hotel space in Manhattan for the first time in a long time. Some mixed-use and residential construction is going on the Upper East and West Sides. Farther downtown, several buildings are in the conversion process from commercial to residential. Some experts say that retail follows residential, and some say it's the other way around: I say it doesn't much matter whether the tail wags the dog or the dog wags the tail, since the result will be the same in any case.

The average New Yorker will probably notice the boom in retailing in the latter half of this year. Quite a lot is about to happen Downtown in terms of retail leasing; the Coliseum project will get launched; and as the Times Square construction continues, by the end of the year, we'll really see the fruits of our labor. It's also likely that Alexander's will come out of its sleepy stage and do something interesting, although it's anyone's guess exactly what that plan will actually be.

Looking beyond 1997, a great deal hinges on the upcoming mayoral election. The market will continue to be strong if we keep the same administration in place. We have 39 Business Improvements Districts in New York now, and another 20 on the boards, not to mention great chemistry between the public and private sectors - all fostered by the current administration. If there's a change in city government, there'll be a jolt - inevitable changes, natural attrition, and a certainty that we'll have to start from scratch at least in some areas. We have a winning formula, and we want to keep it in place.

(Garrick-Aug's Faith Hope Consolo can now be seen on the Internet, including the popular retail column, "The Faith Report," and listings with color photographs of store-fronts and recent news articles on the retail market. Her home page is: http://www.-faith-consolo.com: her e-mail address is [e-mail].)