Roosevelt Island sees wave of chain stores

By John Celock | December 31, 2007 04:50PM

Following the rule that stores follow population,
formerly sleepy Roosevelt Island is changing as more chain stores are
moving into the middle-income enclave in the East River.

Formerly known as “Welfare Island,” Roosevelt Island is run by a state
agency — the Roosevelt Island Operating Corporation — and much of the
area has a state-supported, institutional feel.

“It looks like East Berlin before the wall fell,” said Andrew Oliver,
executive vice president of Cushman & Wakefield Sonnenblick
Goldman. For years, there was only one chain store, a Gristedes
grocery, and much of the remaining retail was service-oriented: a
diner, a Chinese takeout joint and a thrift shop, among others.

This fall, however, the island became home to a Duane Reade, which
followed on the heels of the opening of the area’s first Starbucks.
Both are tenants in a Hudson Companies/Related Companies complex, and
part of a new wave of retail space that brokers say is changing the
island.

Lay of the land

Roosevelt Island is cigar-shaped, a long ellipse running north to
south. The northern tip of the island is dominated by playing fields
and the Octagon, Becker and Becker’s luxury rental building that opened
last year, based on the 19th century Octagon Tower, part of a former
asylum on the same site.

The center of the island — accessible by the F train or via overhead
tram from Manhattan — contains buildings owned and developed by the
Roosevelt Island Operating Corporation, built in the 1970s and 1980s in
an institutional style reminiscent of state university campuses built
in the same era. The RIOC buildings are a mix of residential, retail
and community space, including the island’s public school and library
branch.

To the south of that is Riverwalk, the complex being developed as a
Hudson/Related joint venture, which currently contains five of a
proposed nine buildings. Farther south, below the 59th Street Bridge,
is a no-man’s-land of old warehouses, currently being debated as the
site of future parkland or residential development.

The island’s relatively limited transportation options have made it a
stepchild of the Upper East Side, with much of its populace working for
the United Nations or local East Side hospitals. The residents have
long complained about limited dining and shopping options. For example,
the island had for years been one of the few parts of Manhattan to lack
a coffeehouse. The RIOC retail slots, which total 40,000 square feet,
currently have 13,000 feet available for leasing.

Finally, java

As a result of the limited retail options, the arrival of seven store
spaces in the new Riverwalk buildings — Buildings 3 and 4, also known
as Riverwalk Place and Riverwalk Landing, respectively — is a big deal
to area residents. David Kramer, a principal with Hudson, noted that
the island’s location and limited transportation options will never
make it a destination for shoppers, but he said that six of the seven
retail spaces in the new development have been leased out.

Along with Starbucks and Duane Reade are a salon and a dry cleaner, and
two restaurants: Fuji East and Nonno’s Focacceria. The seventh space
has yet to be filled, but Kramer said the developers are looking to
bring a food store into the space.

The retail rents for the new Roosevelt Island buildings have been hovering in the $40 to $45 a square foot range, he said.

Kramer said the developers tried to gear the new retail toward the new
and existing residents on the island. This included trying to recruit
stores that were not featured in the current crop of basic service
retail offered on Main Street.

“We want to complement what is there,” Kramer said, noting that the
developers worked with RIOC before recruiting retail to the island.
“There was not a Starbucks or a Duane Reade. It is not a competition.
The stronger it can be, the better it is for our residents.”

Many of the new stores have been opening as new development brings more
residents to the island. Since 2000, the island’s population has gone
from 9,520 residents to approximately 12,000. Riverwalk buildings 1 and
2 — known by their addresses of 475 Main Street and 465 Main Street
house staff for Memorial Sloan-Kettering Cancer Center and Weill
Cornell Medical College.

When the entire development is completed, it is estimated that 16,000
people will reside on Roosevelt Island. In addition to the space set
aside for hospital personnel, Kramer said some of the residential space
has been snatched up by other young professionals seeking a cheaper
alternative to the rest of Manhattan.

Cushman & Wakefield’s Oliver said that as a rule, Roosevelt Island
rents run about 20 percent below the rest of the borough. Currently,
island rates range from $1,700 for a studio to $4,600 for a
three-bedroom.

Riverwalk’s fifth building, a 123-unit condominium building known as
Riverwalk Court, opened for sales on Oct. 24. The units are priced
around $850 a square foot, Kramer said.

RIOC comptroller Carmine Tedesco, who is overseeing the corporation’s
retail development strategy, said the top priorities now are to bring a
pizzeria, fish store and bakery to the island, to replace ones that
were evicted after falling behind in rent last year. Tedesco said
several businesses have expressed interest and are working through the
state leasing rules before being approved by the RIOC board.

He has also received several calls from people looking to open a sports
bar and a veterinarian clinic on the island, and that he continues to
hold discussions with the interested parties. He declined to identify
future plans for the RIOC-owned retail space, but said service-oriented
retail has been a goal for the island.