Retail Traffic

Harlem USA Proves Neighborhood Is Seeing the Light

If you had walked through its urban streets 15 years ago, most buildings would have been boarded up. But today, homes and businesses are being renovated, crime is decreasing and the economy is thriving. Harlem - historically one of the most depressed areas of Manhattan - is now ripe for retail.

At the center of Harlem's activity is Harlem USA, a 285,000 sq. ft. development located at the intersection of 125th Street and Frederick Douglass Boulevard. The $66 million retail and entertainment complex will include a nine-screen Magic Johnson Theatres as well as The Disney Store, Old Navy, Modell's Sporting Goods, HMV Records and Jeepers!. With some retailers opening before Christmas, Harlem USA's grand opening events will commence in spring 2000.

Harlem USA is being developed by New York-based Grid Properties Inc. and the Gotham Organization, in conjunction with Commonwealth Local Development Corp., an affiliate of Harlem Commonwealth Council, a community-based not-for-profit economic development corporation.

The development, which has been in the works since 1992, is the result of a vision shared between Drew Greenwald, president of Grid Properties, and Barbara Norris, president of Commonwealth Local Development Corp.

Retailing in an untapped market "We shared the belief that the area was underserved, but we also believed that you could only do this if it was a high-quality project with high-quality tenants," Greenwald says. "It wasn't about just building a box."

In planning Harlem USA, the developers wanted to create a place that would add more excitement and interest to an already vibrant street as well as give Harlem residents a place to shop right in their own neighborhood.

"We have found through studies and other statistics that the northern Manhattan marketplace has more disposable income than one would have thought," says Stephen Asch, president of New York-based New Spectrum Realty Services Inc., the leasing agent for the project. "Seventy percent of the shopping of Harlem residents was done outside the area."

The increase in population, as well as the cleaning up of Harlem in the past 10 years, stems from the economic boom that has revived all of Manhattan. "The buildings in Harlem were built at a time when there was a lot of opulence. There was beautiful architecture, and it still exists," Greenwald says. "If you go through the area now, on every block you'll see at least a half dozen beautifully renovated brownstones, no matter how bad the block used to be."

While some businesses and members of the community are skeptical about bringing new retail into Harlem, others believe it is due time. With so many residents living in such a small area, the income per square mile is relatively high, Greenwald says.

"The income density of Harlem is $868 million per square mile," he says. "To give you a comparison, in Atlanta, the income density per square mile is $56 million, in Cincinnati it's $77.2 million. What this shows isn't the fact that within a square mile you have people making a fortune, but what you have is a lot of people in that square mile. People have to buy certain types of items, regardless of their incomes."

Although the incomes are steady and the population is high in Harlem, some retailers still cling to traditional inner-city stereotypes that the area is unsafe. But, in a project like Harlem USA, convincing retailers to enter the market was crucial, because the retailers were the driving force of the project.

"There were two key components for us getting involved," says Lewis Jones, president of New York-based Chase Community Development Inc., a wholly owned subsidiary of Chase Manhattan Bank. As the primary lender in the development, Chase financed $47.7 million. "The tenants were first class, and the space was 70% preleased before we closed the loan." Another $11.2 million in loans came from the Upper Manhattan Empowerment Zone Development Corp., an organization that provides city, state and federal funding.

Persuading retailers to be part of a project like Harlem USA can be challenging because there is no similar history of retailers doing well there, Asch says, but adds that "retailers who are aware of emerging markets have taken advantage of this opportunity."

Harlem USA gives retailers the chance to be in a market with 400,000 residents, where they can lock in at lower rents than other parts of Manhattan. "The quality of retailers that have come aboard has signaled an end to the cliche of the inner city," Asch says. "Mainstream retail America firmly recognizes that there is disposable income in other parts of the city."

Harlem USA will be The Disney Store's fifth store in New York City. At 6,000 sq. ft., the store will be larger than the company's average 4,300 sq. ft. store. "What is appealing about Harlem is that there are so many young professionals and young families in the community," says Sondra Haley, vice president of publicity and promotions for The Disney Store. "Opening a store on Harlem's main commercial thoroughfare is a win-win situation for both The Disney Store and the community. Harlem USA's diverse demographics, along with its plan to combine retail and entertainment, make it a natural location for The Disney Store."

Window shopping In the early stages of planning Harlem USA, the developers called on New York-based Skidmore, Owings & Merrill to design a space that would reflect the vibrancy of Harlem. New York-based Simmons Design Group also contributed to the project's design.

"The idea of the building is turning a mall inside out," says Mustafa K. Abadan, partner with Skidmore, Owings & Merrill. "This is a very open, outward-oriented center. It is really to activate the street life on 125th Street."

The project incorporates a glass curtain wall design, with glass on three sides of the building. Each retailer will have its own entrance to the street, without connecting to other retailers. The architects did not add an indoor common area, as they wanted the building to interact with the street.

"New York is a very particular environment that is very street-oriented," Abadan says. "New Yorkers like to be on the street, they like to window shop. Typically, inward-oriented retail environments in New York have a rough time."

The six-level building includes two retail levels; a basement level; a two-story theater; and New York Sports Club, a full-service health and fitness facility on the rooftop. The 20,000 sq. ft. lobby of the Magic Johnson Theatre is surrounded with glass, in order for visitors to look out over the street. The building's glass walls allow tenants to use large-scale graphics to animate their windows.

In addition to the fitness facility, the project also has a video arcade and a branch of Chase Manhattan Bank. "We tried to keep it so the building would be busy and occupied from early in the morning to late in the evening," Abadan says.

As part of a bustling urban street scene, Harlem USA is likely to be busy throughout the day. And the setting was neither contrived nor fabricated.

"A lot of people are trying to do urban-themed environments across the country; they try to give you two sides of the street," Greenwald says. "This project is so authentically urban, it's dynamic and exciting."

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