The Real Deal New York

Stadium, mall could add retail luster to South Bronx

November 16, 2007
By Tom Acitelli

A new stadium and a new mall may infuse the South Bronx with fresh retail space, but first these marquee projects have to get built.

An updated Yankee Stadium and the proposed mega-mall, the Gateway Center at Bronx Terminal Market, face opposition over the impact they could have on the surrounding South Bronx, particularly the increase in vehicle traffic. Also, the stadium may not be the economic boon for the region touted by some politicians. Still, both developments hold the promise of a retail renaissance in the long-blighted area, perhaps one to complement renewed residential interest in the South Bronx.

Right now, only one area of the South Bronx generally commands retail rents comparable to thriving shopping areas elsewhere in the city – the Hub at 149th Street and Third Avenue. “Within a few-block radius, you can see disparities in prices per square foot,” said Marco Lala, a Bronx native and a senior managing director with brokerage services firm Massey Knakal. Lala’s brokered in the borough for a decade. “Retail could go for as much as $100 a square foot at the Hub. But, you start going off a few blocks into the side streets, east and west, you see a drop.”

Some say the stadium and the mall could even out this retail disparity.

“The Gateway Center at Bronx Terminal Market would provide Bronxites with the same shopping opportunities that residents of the other boroughs already enjoy,” Glenn Goldstein, executive vice president of mall backer the Related Retail Companies, told The Real Deal in an email. “The Gateway Center will revitalize this part of the South Bronx by replacing nearly vacant and dilapidated structures that block access to the waterfront with new pedestrian-friendly, modern shopping centers.”

Pending a City Council vote scheduled for Feb. 8, the Gateway Center would unfold on the 32-acre former site of the Bronx Terminal Market. BTM Development Partners, an affiliate of the Related Companies, plans a one million-square-foot retail center plus parking for as many as 2,340 cars, a hotel, and a banquet facility. First announced in 2003 and already approved by the local community board and the city Planning Commission, the $394 million mall would spill over nearly 17 acres on the waterfront just south of the current Yankee Stadium and east of the Major Deegan Expressway. No retail tenants have been picked for the mall because it lacks final council approval.

The Gateway Center did elicit community opposition because of Related Companies chairman Stephen Ross’ ties with Deputy Mayor Daniel Doctoroff (the two were business partners and friends). The Economic Development Corporation, which cut the deal with Related for the terminal site, reports to Doctoroff. Plus, the mall will bring more automobile traffic to the South Bronx, which already has some of the nation’s highest asthma rates, according to a 2004 New York University study.

Still, these questions on the mall are relatively small potatoes to those dogging the would-be Yankee Stadium.

Majority Yankees owner George Steinbrenner, flanked by government officials including Mayor Michael Bloomberg and Gov. George Pataki, announced last summer plans for an approximately 53,000-seat stadium, with construction scheduled to begin this spring in Macombs Dam Park adjacent to and north of the current stadium. The total cost of the stadium and surrounding development is estimated at $1.2 billion, according to the Empire State Development Corporation. The stadium would open probably in 2009.

The city and the state would contribute more than $200 million for upfront construction costs, including for parking garages and new parkland. Also, the Yankees would benefit from several government incentives, with the franchise getting an exemption on rent or property taxes, mortgage recording taxes, and sales taxes on construction materials. These breaks could push the public tab for the stadium to around $400 million, according to a report done by Economics Research Associates at the request of the city itself. Good Jobs New York, a government watchdog group, got the report via a freedom-of-information request and provided it to The Real Deal.

The report concluded that the public payoff for the $400 million investment would be about $225 million over 30 years, prompting questions over whether the taxpayer investment is worth the return.

“There’s a perception that the South Bronx community has to take one for the team,” Good Jobs New York’s Dan Steinberg told the Village Voice.” But it’s actually taxpayers that share the burden of this project.”

The stadium, too, has received a tepid response from Bronx leaders. The local community board in December rejected the Yankees’ plans in an advisory vote, partly because of the parkland a new stadium would absorb.

Bronx borough President Adolfo Carrion, for his part, supports the stadium – but with several caveats. Carrion, who did not return calls for comment, listed on his Web site what he wants with any stadium development, including a new high school for sports careers, a hotel, a convention center, a new Metro North station, and an improved ferry terminal. Carrion, whose role in the debate is largely symbolic, also wants the city and the baseball franchise to coordinate traffic and parking with the Gateway Center by possibly instituting a shuttle service between the mall and the stadium using hybrid vehicles.

Such concerns, though, may be also-rans to the forces already in motion: The Empire State Development Corporation signed off on plans for the stadium in late January, a crucial step toward making it a reality – with public funding. And a Gateway Center spokesperson told The Real Deal that, pending City Council approval this month, “We anticipate being able to move toward groundbreaking later this year.”

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