Times Sq. sites ready to rent.

The four Times Square sites controlled by the Prudential-Park Tower Joint Venture are finally available for lease. The buildings surround Times Square at 42nd Street, but exclude One Times Square and the southeast corner of Broadway and 42nd.

According to Betsy Rodgers, a partner with Rodgers & McCauley, who are the exclusive leasing representatives, interest has been high in the 80,000 square feet of available space.

Of course, the former Nedicks site at the northern corner of 42nd Street and Seventh Avenue is getting the greatest amount of interest. The 16,000 square-foot space is nearly column-free with 20-foot high ceilings. The second floor of that building housed the old California Club, and is available as well.

Those can also be combined with what she calls the Apple Theater next door. "It's also a grand space," she says. "It was once partitioned into two movie theaters and has Belgian brick walls and a ceiling height of 20 to 25 feet. I tell the [company reps], 'Don't think of doing a prototype store - go wild,'" she said.

Brokers representing tenants believe the sites present an opportunity to be at the "Crossroads of the World," and indeed, that is the marketing plan being pursued by Rodgers.

"Some of the [buildings] are art deco and built like fortresses," Rodgers added.

The old Rialto Theater on Seventh Avenue between 42nd and 43rd is also available, but not for movies.

Rodgers expects to refurbish and release all the old spaces with the mix that is appropriate to Times Square. "Hopefully, we'll get the best of the New York eateries," she said. "And a great mix of good stores."

Rents vary by location and size and will reflect a cancellation clause. While leases of ten years are available, there is a six-month cancellation clause. If the cancellation clause is exercised within five years, Rodgers noted there will be some kind of pay back of the unamortized portion of the tenant improvements, negotiated in the beginning of the lease. "The restaurant might be longer," she added, "with five year options. But it's not our intention to roll over tenants."

The joint venture will construct a 6,800 square-foot "glass box" on the southern side of 42nd Street, across from One Times Square, for an as yet to be determined major restaurant.

"The other spaces are going to be a mixture of retail that's fun," she said. "It should be visual merchandise, but with some substance." She would consider a t-shirt store "that does it well" but not electronics and other similar kinds of discount stores just to fill space.

Brokers said the area rents could command $75 to $100 a square foot, but there will have to be a discount for the cancellation clause. "Cheap around there is $40," said one broker who insisted on anonymity.

Michael Butler, president The Butler Group and a retail consultant, said the available spaces are the best in the whole project. "It's also going to be a difficult sale, but achievable," he said. "The market and the demographics are worth it."

He also doesn't believe the office market will turn around so fast that the joint venture will have to buy out the leases.

But one part of the deal bothers him. "They want the tenants to take care of the brokers," he explained. "In my opinion they are shooting themselves in the foot with that philosophy."

The Prudential-Park Tower Project also has strong incentives to lease up the space within the next 18 months. If they don't achieve an 80 percent lease-up, they will lose the rights to the sites for ten years.

Wendy Loventer, vice president for planing and design for the 42nd Street project, said they were very concerned that there be activity on the street as soon as possible. They want the venture to have the core and shell work done within 12 months of signing the leases. "The notion here is that they have to [achieve an] 80 percent lease up in the first round," she said. "If they ever fall below 80 percent, we take back the sites for ten years. So there is a tremendous incentive on their part to get it leased up and stay up because they want to be able to control their sites. But we want the street to stay active."

The only time the site would not be active, Leventer added, would be when preparing for the construction of the long-term buildings.

"We are on a fast track," Rodgers agreed. "We want it all leased in next 15 months and have them move in as quickly as possible."

Marilyn Nichols, president of Nichols - Kane Realty, Inc., a retail consultant, said leasing will be difficult because of the tentative terms. "Certainly the retail user that would not have to make a huge investment in construction and would not have to be concerned with a short-term amortization has a wonderful opportunity because of traffic flow and the potential of setting up a place after there construction."