SEARS, CALDOR, KMART VYING FOR SPACE IN MANHATTAN
Byline: Sharon Edelson
NEW YORK — Real estate talk continues to churn over the ambitious plans some of the nation’s biggest retailers have in store for Manhattan.
The newest entry to what could be shaping up as one of the city’s prime retail battlegrounds — the Union Square area — could be Sears, Roebuck & Co.
Sears has expressed interest in taking over the total store space in a proposed residential and retail complex on 14th Street and Broadway — about 200,000 square feet. If Sears lands the space, it could effectively knock out Sports Authority, Caldor, Virgin Records and other interested parties.
In an interview Monday, Arthur Martinez, chairman and chief executive officer of the Sears Merchandising Group, said the company is considering five sites in Manhattan. Martinez said one of the sites is the Union Square location, but declined to name the other four.
In another development, Caldor Inc., the $2.5 billion discounter, is considering a site in the Penn Station area. Such a move would put Caldor head-to-head with Kmart, which plans to open at One Penn Plaza in November.
The site could serve as a second Manhattan unit for Caldor. As reported, the mass market giant is said to be eyeing a major, multi-level store on the southeast corner of 14th Street and Broadway, the same site Sears is considering.
Jeff Blau, vice president of The Related Cos., the developer of the 14th Street site, said, “We are talking to everybody,” but declined to be specific.
Sears has already made a commitment to strengthening its position in the Northeast. Last month, the company bought the leases to an A&S store in Woodbridge, N.J., and a Stern’s unit at Sunrise Mall in Massapequa, N.Y., from Federated Department Stores. In addition, Sears is planning to acquire the lease to a John Wanamaker unit in Yonkers, N.Y. The Wanamaker store is owned by Woodward & Lothrop, which is under Chapter 11 protection and is subject to any approvals required by the bankruptcy court.
According to real estate sources, A&S on Broadway and 33rd Street was Sears’ first choice, followed by Union Square. Federated announced Monday that it will replace that A&S with a Stern’s unit.
Sears was reportedly also looking at the New York Colosseum on Columbus Circle, a property that is currently tangled up in red tape, real estate sources said.
With Kmart planning to open its first Manhattan store at One Penn Plaza between 7th and 8th Avenues on 34th Street in November, the Penn Station area is shaping up to be another hot location, especially for mass merchants. The area is already heavily trafficked by commuters and shoppers of R.H. Macy and Herald Center.
As the battle for real estate intensifies, Caldor may be trying to strike while the iron is hot.
According to sources, the 163-unit regional chain based in Norwalk, Conn., is eyeing the Pennsylvania Hotel at 7th Avenue and 33rd Street, where Sports Authority recently opened a store, in addition to the Union Square site.
“They’re looking at a deal in the Pennsylvania Hotel,” said Faith Hope Consolo, managing director of Garrick Aug, who said she is working with Caldor.
“Caldor is really seriously looking at several sites in Manhattan,” Consolo added. “Caldor is looking in Midtown West and the Upper East Side. I think they would take more than one location. Bigger seems to be better. There are several opportunities being put together at this time. I’m working on several deals in the 80,000- to 130,000-square-foot range.”
Gary Vasquez, senior vice president of marketing at Caldor, said, “We haven’t signed any deals. We’re looking at a number of locations in Manhattan.”
According to Consolo, other big box retailers, like Home Depot, are scouring Manhattan for sites. “There are opportunities for the big box retailers because they have realigned their marketing concept to include more than one level,” she said.
“Yes, I’ve heard rumblings of Caldor looking at the Hotel Pennsylvania,” said William Smith, chairman and ceo of Sports Authority. “We welcome them. We think it’s a great site for any good retailer. Anywhere you have a density of people you have a good retail site.”
“It would make a lot of sense for Caldor to open near Penn Station,” said Richard Seligman, senior managing director specializing in retail real estate at Edward S. Gordon Company in Manhattan. “Both Penn Station and 14th Street have such huge traffic. They are both separate and valid locations.”