NEW YORK — Nordstrom Inc. is eyeing the massive Hudson Yards project under development on the far west side of Manhattan where it could open its first full-line store in the city.
This story first appeared in the April 21, 2011 issue of WWD. Subscribe Today.
After years of combing Manhattan for a site and considering a number of alternatives, the Seattle-based department store chain is “looking at the potential of Hudson Yards,” said a source. “They’re in discussions with Related Cos.,” developer of Hudson Yards, a 26-acre commercial and residential project to be built over the rail yards near the Hudson River located between 30th and 33rd Streets and 10th Avenue and the West Side Highway.
“It’s fair to say they’re interested and considering it, but nowhere close to any kind of deal or commitment,” the source added.
Nordstrom is also considering other sites in Manhattan, but Hudson Yards seems like its best bet given the enormity of the project and its ability to provide Nordstrom’s space requirements of at least 180,000 to 200,000 square feet, a parcel extremely difficult to find in Manhattan, particularly in an area dense with upscale shoppers.
Nordstrom also has transportation requirements and wants to be near subways and major thoroughfares. The 7 subway line is being extended with a new station on 34th street and 11th avenue that will be at the front door to Hudson Yards. There is also a proposal to convert the Farley Post Office into the new Moynihan Station for Amtrak, which would feed more traffic to the area. In addition, Hudson Yards is located at the northern terminus of the new High Line park.
Store executives are also concerned about the economics of opening in Manhattan, including construction, operations and labor costs, but most probably could get some enticing incentives from Related involving sharing some capital expenditures.
“While we don’t comment on specific conversations with tenants, we have seen significant interest from retail and office tenants for the Hudson Yards,” said Joanna Rose, vice president, corporate communications and public affairs, Related Cos. “Progress on the development continues and we are looking forward to delivering our first tower and ideally the retail complex in 2015, providing that conversations are converted to contracts this year.”
Related has been seeking a department store anchor for Hudson Yards, which would be critical as a magnet to lure smaller specialty tenants and fill the planned mall on the location. Related was recently spurned by Bloomingdale’s for the project because store executives were not keen on the location, although for years they have pondered the idea of opening a unit on the West Side, even before Bloomingdale’s opened its scaled-down unit in SoHo in 2004.
With Related’s Shops at Columbus Circle in the Time Warner Center seen as a growing success, certain retailers are likely to bet on the Hudson Yards project. Since the opening of the Time Warner Center, there has been a steady influx of higher grade retailing to the vicinity, including Apple, Burberry, Brooks Brothers and Uggs. The Hudson Yards project will have a similar construction as Time Warner shops, with its curved front.
Nordstrom, as well as Kohl’s and Target, have been among the retailers scouting the West Side and Columbus Circle areas. But Kohl’s and Target might be considered too down market for Hudson Yards, which is expected to look for a higher grade anchor to lure upscale specialty retailers such as J. Crew or Coach.
Nordstrom considered a building at 1775 Broadway, which is an office tower just south of the Time Warner Center. The site also carries the address 3 Columbus Circle.
But the closest Nordstrom came to landing a Manhattan site was the former Drake Hotel space, on Park Avenue between 56th and 57th streets. A nonbinding letter of intent was signed, but Nordstrom rescinded it in 2008. It’s possible the retailer is still examining that spot. One big issue was whether the store would have a 57th street entrance.
Over the years, Nordstrom also looked at the Lord & Taylor flagship; the 34th street area in the vicinity of Pennsylvania Station; Madison Avenue in the 50s; 200 Fifth Avenue in the Flatiron area; an office building on the southwest corner of 58th street and Madison Avenue, and the corner of 42nd street at Sixth Avenue.
So far the retailer has had to settle for a Rack outlet that opened last spring in Union Square.
Related expects to open its first office tower in Hudson Yards, along with some retailing, in 2016 or 2017 and is seeking major office tenants. Ultimately, under the master plan, there will be 14 towers, 5,000 residential units, a cultural center, a hotel, a school, lots of green space, an underground infrastructure servicing the entire community, as well as retail.
The site is divided into two sections: Hudson Yards East and West with 11th Avenue in the middle. Phase 1 is on the east side of the avenue. The project is estimated to cost $15 billion and occupy 12 million square feet. Construction could commence next year.
Hudson Yards is the largest undeveloped single piece of property in Manhattan.
Oxford Properties Group, the real estate investment and development arm of the OMERS Worldwide group of companies, is partnering with Related on the development and jointly signed a contract with the Metropolitan Transportation Authority for the development rights at the Hudson Yards.