It wasn t hard for Stephen Ross to keep a close watch over the construction project that marks the pinnacle of his career so far.
From his office at the corner of 59th Street and Madison Avenue, the Chairman of The Related Companies needed to only hoist the binoculars sitting on his desk to watch the panes of glass being added to the nearly complete Time Warner Center at Columbus Circle.
The $2 billion project currently the largest in the country, and the biggest construction effort in New York since the World Trade Center will open the first of its many doors when the Mandarin Oriental Hotel checks in its first guests on Nov. 15.
It s vision of a different sort the kind looks to the future, rather than out the window which has Ross, 63, convinced that New Yorkers will flock to retail at the first vertical mixed-use facility of its kind in the city. The 2.8 million square-foot building will also house Time Warner s headquarters, Jazz at Lincoln Center and luxury apartments.
Ross, who started his career as a tax attorney, founded Related three decades ago, turning it into the second largest owner of rental apartments in the country. But it has been his work on large-scale mixed-use development projects which combine office, retail, apartment, hotel and arts space – in recent years that has raised the stakes for the company. Along with Boston developer Kenneth Himmel, Ross built a 72-acre development in West Palm Beach prior to the Time Warner project. He may be building something Downtown next. “We re certainly looking at it,” he said.
The Time Warner Center will have a big impact, Ross predicts. “Until it is open, I don t think people will understand the importance of the project,” Ross said. “There is no other building like this that has so many uses, and people haven t seen the finishes yet.”
But the challenges appear sizable, particularly for retail. The idea is to make Columbus Circle, formerly a no-man s land between midtown and the Upper West Side, into a destination address. There is also the hurdle of getting New Yorkers to discard their usual tendency to shop only at ground level stores. Every previous attempt at vertical retail in New York has failed, but Ross thinks the six-level, 350,000- square foot Shops at Columbus Circle will buck the trend. The shops are set to open Feb. 4, and are already 95 percent leased.
Some retail experts have their doubts. Alan Victor, executive vice president of the Lansco Corporation, said, “the jury is out. Vertical retail like this has not worked to date. And Columbus Circle itself funny as it sounds might be a physical impediment, because you have to go around the circle. But if anyone is going to make it work, it s these guys.”
Robert K. Futterman, chairman of the firm bearing his name, said the project will be “incredibly successful, because of the level of design and the integration of the facility.”
Ross said layout is key. “It ll work because it s all about how you lease the upper floors,” he said. “We put Jazz at Lincoln Center at the very top. It s the most expensive, and also the most dramatic and exciting. This will drive people up the building.” Retailers, including Whole Foods and Equinox, will also benefit by catering to a surrounding area that lacks for services. “The area has been underserved,” Ross said. “But if you look at the demographics, it s very upscale and incomes are very high.”
Despite predictions for his building s success, Ross doesn t see other mammoth projects with vertical retail springing up all over Manhattan. “This is a unique site,” he said. “I don t know if there is any other site, other than the World Trade Center, because of all the traffic it gets, where you could do this.”
The project will also alter the face of the Columbus Circle, a unique area in its own right. “It s the only traffic circle in New York, so this is going to be a special spot that doesn t exist anywhere else,” said Ross. The Circle is being renovated as part of a $21 million project that includes adding trees, landscaping and decorative paving. Ross said the Time Warner Center complements the Circle. “I think when people go in the circle and see how the lower portion of the building really emphasizes the circle, they love that.” Next door, a revamped Two Columbus Circle will be the future home of the Museum of Arts and Design (formerly the American Craft Museum). “The character of the neighborhood will change,” said Ross. “Other buildings will upgrade, because they ll want to benefit from the high number of people in the area.”
The Center itself will serve as a “showcase” for Time Warner and other companies, but befitting its location, advertisement will be more subtle than in Times Square. The glass prow of the building on 58th Street will serve as space for possible digital displays by Time Warner, including telecasts.
“It might be one telecast, not a series of them,” said Ross. “It might just be color a lot of times, or art forms.”
The building will also serve as a display area for various other building “sponsors” including technology company Samsung, and unannounced car and finance companies. The building will even have its own fleet of chauffeur-driven cars that will be visible throughout the city, as a result of an affiliation with a major car company. “People will know the cars are from the Time Warner Center because of the uniforms of the drivers, or possibly because of the color of the cars,” said Ross.
As far as office space, Ross won t have to settle for only a view of the building after this year, because Related and Apollo Real Estate Advisors, which also developed the Center, plan to take a total of 106,000 square feet of office space there for their headquarters. Ross said the companies considered taking space all along, despite recent reports. Time Warner will occupy 865,000 square feet in the south tower of the building, with some operations moving in by spring. Another 105,000 square feet was bought by the media company, which it may market or hold on to for expansion.
Despite setbacks including a fire in April in Jazz at Lincoln Center that caused $100 million in damages and delayed the opening of the retail center until after the Christmas season Ross said the project has gone rather smoothly. “We would have been right on time but for the fire,” he said. Ross said the developers of the project are getting a “major portion of our equity back” before the project is even finished through a recent refinancing and through selling a stake in the retail space and underground garage earlier this year.
As for the binoculars, Ross said while watching the construction process over the last several years, he has been surprised how quickly it has all gone up. “To look out my window now and see almost a complete building there,” he said, “it s amazing. You wonder, where did the time go? What have I done over the last three years?”
The answer, of course, is put up other new buildings. Related recently completed the Park Imperial on Broadway between 55th and 56th Street, and is in the process of completing the Westport on 10th Avenue and 56th Street, one of 16 highly-branded luxury rental buildings in Manhattan operated by Related Rentals. For the company as a whole, Ross said four new projects are set to get underway in the coming year and that there is more than $1 billion in various stages of development in New York, Boston, Miami, Chicago, California and other locations. Around 1,500 employees work at the company, overseeing a real estate portfolio valued at more than $15 billion.
For Ross, the path to becoming the developer behind a super-luxury project that will boast Manhattan s most expensive apartment (sold for $45 million) and the most expensive hotel built here in the last decade has been gradual.
Ross grew up in Michigan, and began a career as a tax attorney in Detroit. “I was practicing law and doing tax planning and structuring deals for real estate developers, and I took a liking to it,” he said. “I saw the opportunities.” After a short stint in investment banking, he founded Related before turning 30 years old, spending his first 10 years cutting his teeth on affordable housing.
Ross s firm ran into trouble in the early 1990s, before Ross restructured more than $100 million in unsecured debt, which cost him a chunk of the company, which he sold to partners.
Around the same time, the company shifted more of its focus towards building and acquiring high-profile Manhattan luxury apartment buildings.
Outside of work, Ross serves on a number of charities and boards, including an appointment last month to the board of the Guggenheim Museum. Modern art is fine, but what does he think about jazz? “Am I a jazz fan? I guess I will be.”