The Real Deal New York

Bronx Hub revival gathers steam

November 02, 2007
By Marc Ferris

Signs of change abound at the Hub, a historic crossroads once known as the Broadway of the Bronx. Some civic leaders are now trying to have this pocket of the South Bronx designated as Downtown Bronx, with limited success.

Major roads, including Third, Melrose, Willis and Westchester avenues intersect with East 149th Street here, at Roberto Clemente Plaza. Foot traffic is constant and fingers of retail extend to ancillary streets, especially the canyon along Third Avenue between 149th and 156th streets, the northern borough’s analogue to Times Square. There are no electric billboards, but instead a riot of gaudy orange and yellow signs. Scaffolding and construction projects are beginning to sprout at the Hub, which is within walking distance of a recent spate of proposals to revamp the Bronx Terminal Market and rebuild Yankee Stadium.

Well-known chains like Duane Reade and Washington Mutual Bank have joined typical outer-borough establishments such as Mr. Discount, Audio Shack, Cookie’s Department Store and the 99 Express. For every Burger King or McDonald’s, there’s a Jumbo’s Hamburger Place. Bodegas abound.

The city’s Economic Development Corporation helped jump-start the Hub’s resurgence. One project still in the planning stages is an ambitious development of 180 residential units, 300,000 square feet of office space and 500,000 square feet of retail, including a supermarket and a cinema along 149th Street east of Third Avenue, which will be built by Blackacre Capital Management LLC and Cypress Equities, said Janel Patterson, a spokeswoman for the agency.

Heavy equipment has been deployed to begin the Hub’s most dramatic project, now under construction by the Related Companies on Third Avenue between 153rd and 156th streets, which will house a branch of the city’s Department of Finance and the offices of the local community board. Retail components will include a Forman Mills discount clothing outlet taking 42,000 square feet, a Staples Superstore with 18,000 square feet and a Rite Aid with 16,245 square feet. Related is also renovating a 273-space parking garage.

Though the developer won the RFP floated by the Economic Development Corporation in 2003, the $53 million job just got under way. “It’s a challenging site to lease out to various retailers,” said Glenn Goldstein, an executive vice president at Related. “You need to have a significant project like this pre-leased.”

There are still 15,000 square feet to lease, he said, which will be housed on the first floor of the garage. Related is also revamping the Bronx Terminal Market near Yankee Stadium, which will boast 970,000 square feet of retail.

Located on 156th Street across from the Related site is a privately-funded project by Procida Development, which has yet to break ground but will consist of housing and retail.

Though national chains have arrived, bringing their sense of sameness, the local outlets can offer an element of charming seediness. Several buildings are fully rented on the ground floor but are clearly vacant — even dilapidated — up top. One large green sign on 149th Avenue advertises a pawn broker.

“It’s not quite the Fulton Mall, and the arrival of national chains is not happening so quickly, but retailers do quite well,” said Mario Procida, Procida Development’s head. “Over the next few years, the change will be significant.”

Though the Hub is happening, two other Bronx locations, Fordham Road and Bay Plaza at Co-op City, take in more money, though that may change. Within spitting distance of the intersection of Third Avenue at 149th Street, rents exceed $100 per square foot, said Nicholas Burns, director of sales at Massey Knakal Realty Services. In contrast, rents on Manhattan’s major retail corridors average around $330 a square foot, according to a spring report by the Real Estate Board of New York.

“Some very small spaces get $200,” said Burns. “But the farther away you get from the main drag, retail rents drop dramatically.”

The Related project may single-handedly boost rents to new heights.

“It will extend economic activity from the core center and it will add 225 jobs to the area,” said Burns. “Across the street from the site, one ground-floor tenant who paid $20 to $25 a square foot was struggling, so when the lease expired, the owner signed up a national tenant in the $40-square-foot range. That’s just the beginning.”

Despite the presence of stately buildings with good bones that are at least 80 years old, the office market has yet to catch up with retail, but Burns sees that changing as well. He points to government programs that offer tax incentives and other bonuses, including a task force created several years ago by Sen. Charles Schumer, named the Group of 35, to create ancillary business districts to house back-office functions for companies that don’t require inviting retail spaces, such as computer and printing firms. Back on the retail side, the city’s Industrial and Commercial Incentive Program has also helped, spurring Thor Industries to build a large complex at 2914 Third Avenue.

The activity in the Hub is one of the most significant signs that the Bronx’ building boom has only just begun, said Goldstein. “We’re actively looking at other things,” he added. “The borough is in a resurgence and is under-retailed, so we strongly believe in the future.”

Procida shares that optimism: “We’ve been based here since the mid-1970s and have been bullish on the Bronx for quite some time.”

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