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The sound of construction drones on in Lower Manhattan, where scaffolding can be seen on every block and cranes rise and fall in vacant yards, reminding observers that rebuilding after 9/11 is taking longer than anyone expected.
This story first appeared in the November 27, 2012 issue of WWD. Subscribe Today.
With no fewer than four retail projects under way, these urban malls are relying to some extent on public transportation, which has yet to be completed. The Fulton Center, a subway hub that will eventually connect to the World Trade Center, PATH trains and Hudson River ferries at Brookfield Place, formerly known as World Financial Center, is due to open in June 2014. Architect Santiago Calatrava’s hub for 13 subway lines and PATH trains will open in 2015 at the World Trade Center.
Most of the retail at the World Trade Center will be located in the transportation hub at Ground Zero. Westfield Group in May signed a deal with the Port Authority to develop, lease and operate 365,000 square feet of retail space at 4 World Trade Center and 3 World Trade Center, with shopping spread across three above-ground levels and two below. Westfield operated the highly profitable underground mall at the World Trade Center before selling its interest to the Port Authority after the Sept. 11, 2001, attacks. While Westfield executives have said the mall will be a mix of upscale tenants, food shops and a high-end supermarket, it has competition for luxury brands.
The World Trade Center and Brookfield Place are bringing a total of 615,000 square feet of retail space to the market. In addition, Fulton Street Transit Center has 70,000 square feet of upscale retail space to fill and the South Street Seaport is also looking for tenants.
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Brookfield Place, which is in the throes of a $250 million renovation, has its eye squarely focused on luxury brands to fill its 200,000 square feet of retail space. “Pre 9/11, it was all financial services” occupying the buildings, but several large financial institutions left Lower Manhattan, said Edward Hogan, national director of retail leasing for Brookfield. “Condé Nast is making the decision to come downtown [to the World Trade Center] and has been bringing more creative firms, including media and high-tech companies.”
Brookfield has been planning the center’s renovation for the past six years, after seeing an opportunity to reposition the 20-year-old center. Since 9/11, Lower Manhattan’s demographics changed favorably. “Before 9/11, there were 30,000 residents living south of Chambers Street,” Hogan said. “That’s doubled to 60,000 residents. The average household income at Battery Park City is $140,000.”
Prior to the renovation, retail was scattered at Brookfield Place, where a lack of concentration of stores failed to draw shoppers.
Hogan said the structural changes and high-end finishes of the renovation will speak to the luxury crowd. A dramatic all-glass entryway on West Street is supported by mushroom columns made of curved lattice steel. The Vescey Street entrance, which has a double-loaded retail corridor, will be fronted on both sides by outdoor seating surrounded by trees and foliage.
“We’re creating a Fifth Avenue-like streetscape facing the 9/11 Memorial that will be several blocks long,” Hogan said. About 25,000 square feet of the former Winter Garden will be leased to a marketplace similar to Eataly. “We’re announcing a deal with a New York marketplace family,” he said. “The balance of space in the Winter Garden is being marketed to luxury brands” of the caliber of retailers on Fifth or Madison Avenues. The area will have an enormous skylight and two-story-high shops. A second-floor 35,000-square-foot dining terrace with marble communal tables and Terazzo tile floors will feature 15 food purveyors with seating for 700 diners. “Food is such a big part of the community,” Hogan said.
Hogan sees the neighborhood’s demographics positively impacting sales. “A decade ago, stores at the World Trade Center were doing $1,000 a square foot,” he said. “Our stores will average $1,900 a square foot.”
Brookfield Place can accommodate two small anchor tenants with 25,000-square-foot and 20,000-square-foot spaces. “The second floor will be merchandised like a NoLIta neighborhood,” Hogan said, referring to owner-operated, unique boutiques and shops.
A second-floor lobby at Brookfield Place will provide a captive audience of potential shoppers: Some 40,000 office workers in the buildings will have to travel to the second floor to reach the building lobbies.
As far back as 1988, the property tried to create a high-end shopping experience, with a 10,000-square-foot Barneys New York outpost and stores for Tahari, Joan & David and Rizzoli.
Current tenants such as Banana Republic and Ann Taylor will close at the end of the year, while P.J. Clarke’s, Rite Aid and Starbucks will stay, although they may be moved to different locations.
“All of the U.S. department stores are looking downtown,” Hogan said. “Ten years ago, the demographics of the neighborhood wouldn’t have attracted luxury retailers. Now, they’re all here looking. We’re also talking to international department stores.”