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New development revitalizes historic Herald Square.

For years, Herald Square was decrepit, little more than a concrete traffic island in the middle of an equally rundown district the square and its less celebrated neighbor, Greeley Square, were not exactly magnets for investment dollars.

Now real estate investors are saying an enthusiastic "hello" to the newly renovated parks, and under new ownership, two major properties have been rechristened: the venerable McAlpin House at 50 West 34th Street has become Herald Towers, and 1328 Broadway, the former Marbridge Building, is Two Herald Square.

"Not long ago, you wouldn't want to be associated with Herald Square," says Joseph Jerome, principal of JEMB Realty, which acquired Herald Towers, last summer. "But now, it's coming of age, and we want to be associated with that. This is an emerging district, and the name Herald has cache." Jerome is in a good position to know: JEMB also owns Herald Center acquired in 1989 from the property's previous owner (none other than Ferdinand Marcos) and converted into a big-box retail property housing Toys 'R' Us, Kids 'R' Us, and Daffy's.

Richard Farley, senior vice president and director of Leasing for. RFR Realty LLC, managing and leasing agent for Two Herald Square, readily agrees, commenting, "There' s history in the name. If you know the history, you know this area was once a thriving part of the city, and it's coming back."

JEMB Realty is investing some $10 million in a. building-wide renovation, of the 25-story Herald Towers, and has brought in Philip Lerner, formerly a residential properties manager for Argo Corporation, to oversee the upgrades and manage the property. Feathered Nest, a Manhattan rental brokerage, is the building's exclusive residential leasing agent. To date, according to Joseph Jerome, all the vacated apartments have been renovated; new kitchens and bathrooms were installed, as well as wiring for internet access. The 6,000 square-foot lobby is undergoing a complete revamping, with the addition of a business center and video-conferencing facilities.

"We're seeing a lot of young professionals taking our apartments," Jerome says. "It's a completely different clientele, including people who work in the World Financial Center, attorneys who work in the new Conde Nast building. So we're offering them the kinds of amenities they expect in a luxury building, like a concierge service."

Location is, literally, central to the marketing of Herald Towers. Jerome notes, "This really is mid-town, and the access throughout the city and the suburbs is terrific." Once the new name and "luxury rentals" went up on temporary signage, Jerome says, people started walking in off the street to look at the units.

The apartments consist of one-bedroom units of up to 1,000 square feet and 500 to 600 square-foot studios, with large closets. Sixty of Herald Towers' 693 units are being rented fully furnished on a monthly basis. Offering maid service, cable tv, local phone service, and fully-stockedkitchens, they are attracting tenants in the apparel and media businesses, people from the United Nations, and a variety of others.

Swedish retailer Hennes & Mauritz (H&M), whose Fifth Avenue store recently opened, with a second Manhattan store planned for space across the street in Two Herald Square, has taken 18 of the furnished apartments for its trainees, according to Jerome.

Changes are also underway at Two Herald Square, where H&M's leasing of 60,000 square feet of space on three levels has already made headlines. "The new name really signals the rebirth of the building," says RFR Realty's Richard Farley. "The only thing that will be the same is the location. Everything else - building systems, lobby, elevators - is undergoing major renovation."

Farley notes that, with full floors of 28,000 square feet, interest is high among prospective, tenants, who thus far have included Internet companies, advertising agencies, and law firms. "This area has become tremendously popular and desirable, the building has great value, and we're presenting the market with a high-quality project, backed by our reputation," Farley adds. "We're getting a lot of support from the real estate community, a lot of interest in leasing, so we're very excited about the building."

Others are equally excited about the 34th Street District overall. Mark Teitelbaum, principal of Argent Ventures, which owns Manhattan Mall, believes the district's potential is now being realized. "There are tremendous retail possibilities here, because. there's so much pedestrian traffic." He adds, "We're now seeing a vibrant office environment, especially in technology." Argent has brought in Urban Retail Properties,. known for its management of such upscale retail venues as Chicago's Water Tower Place and Boston's Copley Place, to manage Manhattan Mall. Teitelbaum says the company is also exploring the possibility of allocating space in the property for technology companies. "The combination of the changes in the district and today's real estate market makes this property one of our most important assets," he says.

The renovations of Herald and Greeley Square Parks are a plus for Manhattan Mall. "Now you see trees and flowers, people eating, having a good time-that really helps the neighborhood," Teitelbaum believes. "We hope to use the parks as a true extension of the mall, maybe hold events there."

Re-opened last summer after a $2.3-million renovation financed by the 34th Street Partnership as part of its capital improvements program, and managed by the Partnership under an agreement with the city, the parks together cover just over half an acre between 32nd and 35th Streets. The Partnership, whose in-house team was also responsible for the rejuvenation of Bryant Park, planned and designed the renovations, assisted by Vollmer Associates, Engineers, Architects, Planners. Among the welcome new features are a wide variety of plantings, an enameled steel fence and arched entrance gates, drinking fountains, and movable wood-and-metal Paris-style park chairs.

"The next stage in the parks' redevelopment will be the installation this summer of two newsstands - at the 35th Street end of Herald Square Park and at the 32nd Street end of Greeley Square Park - designed for the site by architect Hugh Hardy of Hardy Holzman Pfeiffer and constructed of steel with glass canopies. The newsstand in Greeley Square Park will include a cafe, to be operated by Universal News.

"It's the job of the Partnership to revitalize, the 34th Street District, and the completion of these two parks marks a major milestone in that effort," says Daniel A. Biederman, president of the 34th Street Partnership. "The parks are a tremendous enhancement to the quality of life in the area. Even more important, they are a stimulus to the continuing growth of the neighborhood: restaurants want to be located near an important amenity, businesses and residents want to be near fine restaurants and terrific shopping. This is a wonderful opportunity," Biederman continues, "for adjacent properties to reposition themselves and capitalize on this lively and elegant amenity."

Farley, too, is enthusiastic. Commenting on a recent committee meeting of the 34th Street Partnership, he says, "It was wonderful to see the commitment from retailers, building owners - the pride they take in the parks, which are a direct result of the efforts of the Partnership to improve their district. There's a good feeling about the neighborhood, about how far it's come and where it will be in the future."

That future looks good, but it hasn't entirely arrived, Joseph Jerome says. "There's still more that can happen," he comments. "We'd love to see more restaurants and more service-oriented retailers, like dry--cleaners and supermarkets, that are important to the growing residential population."

"We believe in this area," he adds. "We think is still has growth potential; certainly the 34th Street corridor is a hot-bed of activity. It's already well on its way: the 34th Street Partnership has changed the area dramatically, and we're seeing a new clientele, shoppers and residents. There was nothing like that ten years ago.

"In this market," Richard Farley says, "you're always looking for the next hot area. This is it."
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Publication:Real Estate Weekly
Geographic Code:1USA
Date:May 3, 2000
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