High hopes for latest wave of Harlem hotels

TRD New York /
Dec.December 20, 2007 09:29 AM

Developers are moving ahead with three as-yet-unnamed
developments that they think will fill an unmet demand: 5-15 West 125th
Street Off Fifth Avenue; 2296 Frederick Douglass Boulevard between
123rd and 124th streets; and 233-237 West 125th Street, the old
Victoria Theatre at Seventh Avenue.

“Over a million people visit Harlem a year,” said developer Paul
Reisman of New Jersey-based Reisman Properties, which is building the
hotel at 5-15 West 125th Street, “and there is no meaningful lodging
facility to accommodate them.”

Demand for lodging in Harlem is currently being met though a variety of
small establishments, said Tamara Marotta, principal broker for the
Marotta Group, a leading real estate agency in Harlem. “We have seen
many bed-and-breakfasts, apartment-style rooming house/hotel
conversions and modern high-end youth hostels in the neighborhood in
order to deal with the demand, but no boutique hotels yet.”

Room rates for the new hotels have not been set, but developers may be
able to draw tourists priced out of more expensive hotels in Manhattan,
where according to Atlanta-based PKF Consulting, the average room rate
is $276.58 per night.

If the idea of luxury hotels making their way to Harlem feels familiar,
it should. The buzz about Harlem hotels began back in 2003, with a
symbolic groundbreaking ceremony — featuring both the mayor and the
governor — for Harlem Park at 125th Street and Park Avenue. That
much-talked-about $236 million development included a proposed 34-story
building with office space, condos and a Marriott hotel. The project
would have been the first new major hotel in Harlem in 40 years, and it
promised to bring 2,500 jobs in a prime location, next to the Metro
North station at 125th Street.

But the proposed 2006 opening date passed with no major progress while
the developer, Michael Caridi, was indicted on felony charges for
allegedly defrauding HUD on another development. Caridi, who declined
to address why Harlem Park stalled, sold the property later in the year
to Vornado Realty, which now plans to build a 21-story office building
on the site. “We’re not in the hotel business,” said project manager
Barry Langer.

As a result of this kind of ill-starred development, many in the
neighborhood, including state senator Bill Perkins (D-Manhattan), have
come to consider hotel projects the “old bait and switch” — meaning
developers purchased a parcel, got the authority to build a certain
type of property at a certain height and then flipped the land,
increasing the value of the property without actually bringing any
development to the community.

Builders of the new projects, however, are encouraged by the increase
in tourists visiting the area, which include many Europeans,
architectural buffs admiring the untouched McKim, Mead and White 1890s
townhouses on Strivers Row, and various travelers who want to sample
the flavors of Sylvia’s soul food and the sounds of the Apollo Theater.

According to the community group New Harlem, tourism in Harlem is up 20
percent from last year, with the number of annual visitors reaching
more than 1 million. And 65 percent of tourists list Harlem as one of
their top three “must-see spots” while visiting New York.

At 5-15 West 125th Street, Reisman will finish construction on a
full-service, 252-room hotel by the end of the year; the hotel has a
January 2010 completion date. The 18-story property will feature 20,000
square feet of conference rooms, 10,000 square feet of outdoor
terraces, a high-end 120-seat restaurant and a third-floor pool, lounge
and café.

Reisman has yet to finalize an official hotel partner, if he indeed
picks one. “We may run it as a boutique hotel or affiliate with a
higher-end flag,” he said. “That decision will be made within the next
six months.”

The development is being designed by Handel Architects (the architects
behind the Ritz-Carlton Downtown and the Trump Soho Hotel Condominium
New York as well as 40 Bond Street).

Also checking into the Harlem scene is the development at 2296
Frederick Douglass Boulevard, the site of a former Associated
Supermarket purchased in February 2007 for $3.9 million.

Shlomo Levy of Hotel 124 LLC is the official owner. Shuster Management
is currently the developer, although it might not be for long. “We are
still considering it,” said Tali Israeli, Shuster’s vice president of
operations.

At one time, Shuster had teamed with Starwood Hotels — owners of the
“W” and “Aloft” brand hotels — and planned to build an Aloft on the
site. (According to a page on the Shuster Web site that has since been
removed, the “ground-up, mixed-use project of 137,000 square feet will
be used as a high-end residential condo project and … 120-key Aloft
hotel.”) However, according to Roxanne Rabasco, Starwood’s senior
manager of public relations, Starwood has “no confirmed projects for
Harlem.”

Construction has been ongoing since this summer, according to the
Department of Buildings, so it looks like Hotel 124 is looking for a
new flag or developing it themselves as a boutique property.

The third hotel project in Harlem — one that has been talked about
since 2004 — is the redevelopment of the old Loews Victoria Theater at
223-237 West 125th Street, on Seventh Avenue next to the Apollo
Theater. In October, the Harlem Community Development Corporation and
its parent company, Empire State Development, which have owned the
property for years, voted to designate Danforth Development Partners
LLC as the conditional preferred developer of the project.

Danforth is known for its reconfiguration of the United House of
Prayer, a Pentecostal church on 125th Street, and a studio for music
mogul Sean Combs in Midtown West.

Danforth’s hotel proposal also includes condominium residence units and
cultural arts space for the Classical Theatre of Harlem, the Harlem
Arts Alliance and the Jazz Museum in Harlem.

In good company

The hotel developers are following in the footsteps of many national
retailers who have made their way to Harlem to open shop, including
Starbucks, New York Sports Clubs and Bank of America.

Bed Bath & Beyond, Macy’s, Target, Best Buy and Home Depot are scheduled to open stores in 2008.

Residential growth, including luxury condos, has also come to the
neighborhood. According to Jonathan Miller of the appraisal firm Miller
Samuel, the average price per square foot for Central and East Harlem
condominiums rose 39.5 percent between 2005 and 2006, the biggest
increase for a neighborhood in Manhattan.

Also encouraging to developers is a proposed rezoning of 125th Street,
first discussed in 1993, that may finally get approval. The plan, which
would allow for increased density, more mixed-use and commercial
properties, taller buildings and more crosstown transportation, is
expected to be passed in the spring of 2008.

And with fewer undeveloped parcels left in Manhattan, Harlem makes sense.

“There isn’t a lot of room to build in Midtown,” said Adam Weissenberg,
a managing partner of the U.S. tourism, hospitality and leisure
practice at Deloitte & Touche. “Hotel developers are seeking
opportunities in nontraditional areas of the city such as Harlem.”


Related Articles

arrow_forward_ios
(Image by Wolfgang & Hite via Dezeen)

Hudson Yards megadevelopment inspires a new line of sex toys

Cammeby's International Group founder Rubin Schron and, from top: 194-05 67th Avenue, 189-15 73rd Avenue and 64-05 186th Lane (Credit: Google Maps)

Ruby Schron lands $500M refi for sprawling Queens apartment portfolio

Wendy Silverstein (Credit: Getty Images)

Wendy Silverstein, co-head of WeWork’s real-estate fund, is out

(Credit: iStock)

Manhattan rents hit highest level in more than a decade

Adam Hochfelder at the Playboy Club’s opening party with singer Robin Thicke (Alamy Images)

The Playboy Club was a chance at redemption for Adam Hochfelder — here’s what went wrong

From top: 29 Nassau Avenue, 8973 Bay Parkway and 94 9th Street (Credit: Google Maps)

The 10 biggest Brooklyn retail leases of 2019

From left: Dan Teran and Joe De Bey (Credit: Getty Images)

Two bitter rivals compete for WeWork castoff

Lachlan Murdoch, the Chartwell Estate in Bel Air, and Jerry Perenchio

Lachlan Murdoch sets LA record with $150M deal for Bel Air mansion

arrow_forward_ios