THE BUZZ ON 34TH

Byline: Sharon Edelson

NEW YORK — Is it the new “Miracle on 34th Street”?
The thoroughfare, known here for retailers who sell everything from cut-rate electronics to cheap clothing, is in the throes of a major revival, being reclaimed by national chains.
The transformation is evident on the block between Fifth and Sixth Avenues, where stores like 9 & Co., HMV, Claire’s and Parade of Shoes recently opened.
The block already had Lerner New York, Express and Structure stores, which are all divisions of The Limited. And Daffy’s opened a store on the southwest corner of 34th Street and Broadway in October 1994.
National chains are heatedly looking for space on 34th Street, eager to cash in on the heavy foot traffic generated by Macy’s Herald Square and the Manhattan Mall on 33rd Street.
Those scouting store sites include Frederick’s of Hollywood, The Disney Store Inc., Warner Bros. Studio Store and Barnes & Noble.
“We’ve targeted [34th Street] as an area where we want to open a store,” said Peter Fair, vice president of real estate for The Disney Store. “We’ve been looking there for a while.
“It’s a great retail area,” Fair continued. “One of the best Gap stores in the country, if not the best, is on 34th Street and Sixth Avenue. Macy’s does substantial volume.”
According to sources, one of the sites Disney has been considering is the two-level Italy Department Store at 39 West 34th St. But negotiating a lease for the 25,000-square-foot space has not been easy.
In March, Italy put up “going out of business” signs and announced it would open a flea market in the location. The flea-market concept never got off the ground.
Italy has reportedly been reluctant to give up the space, but real-estate sources said the building has a new owner, and the store is now expected to close at the beginning of January.
“That location is clearly a desire,” said Alan Grossman, a partner in The Georgetown Co., a real estate adviser to Disney. “There is possibly one other location on 34th Street, but it has configuration issues.”
“Everybody — all the majors are looking on 34th Street. The problem is there is just no space,” said Beth Greenwald, a broker at New Spectrum Realty Services, who said prime space is renting for $100 a square foot and up.
With so few vacancies, brokers are ready to pounce on every space that becomes available.
A spokesman for Merry-Go-Round confirmed the company will close its store on 34th Street between Fifth and Sixth Avenues soon after the first of the year.
The space currently occupied by Sam Goody, on the second floor of 50 West 34th Street, adjacent to The Gap, is also available.
According to real estate sources, The Gap has reportedly expressed interest in taking over the space, either to expand its current store, or to open an Old Navy Clothing Co. unit by combining the building’s lobby and second floor.
Craig Slosberg, who manages the building for Grenadier Realty, said the space is being marketed, but declined to be more specific.
The Gap had reportedly wanted to open an Old Navy unit in Times Square in a building on the northeast corner of Broadway and 42nd Street. However, Park Tower Realty, which is developing the site in partnership with Prudential Insurance Co. of America, eventually wants to build office towers on the property and is restricting retailers to five-year leases with demolition clauses that would allow the stores to be razed sooner.
According to sources, The Gap has decided not to go forward with the 42nd Street store.
“Since Old Navy is not going to make the deal in Times Square, they want to open on 34th Street,” said a broker who has been working with the company. “They’re very excited about this division.”
A spokesman for The Gap said, “We have no comment unless there is a signed lease.” There are several major projects in the works for 34th Street west of Seventh Avenue.
As reported, Kmart plans to open a store at One Penn Plaza, between Seventh and Eighth Avenues, next year.
In anticipation of Kmart’s arrival, Conway has expanded its store at 1333 Broadway between 35th and 36th Streets by about 25,000 square feet and is changing the name to Conway’s World Premiere Stores. Conway is also expanding one of its 34th Street stores.
Price Costco, the operator of giant membership warehouse stores, is planning to open a 150,000-square-foot unit on 34th Street between Eighth and Ninth Avenues.
“We’re about to acquire some property on West 34th Street,” said Jeff Brotman, chairman of Price Costco, adding that the store will open in about 18 months.
“We have a large number of members in Manhattan that we’re not serving well because our closest units are in the boroughs.”
The new store will be on three to four levels, “which is relatively new for us,” Brotman said. There will be a pickup and drop-off area on the first floor and selling space on the upper levels.
Another big box user is coming to the neighborhood. A 100,000-square-foot freestanding building at 356 West 34th St. is on the market. Faith Hope Consolo, a managing director of Garrick-Aug Assoc., who is leasing the building, said she has been approached by “regional discounters, off-pricers like Filene’s Basement and Daffy’s, category killers like Office Max and Office Depot and a men’s wear category killer.
“I’m in a pick-and-choose situation,” she said. “We did a retail study on 34th Street. It’s upper income, not low-income, as people might have thought. People in the area earn $60,000 to $80,000 a year. It’s a great location for a discounter or off-pricer. Thirty-fourth Street continues to be as active as ever.”

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