Commercial landlords and brokers want to know the same thing bargain-hunting New Yorkers are pondering: the eventual location of the city’s first Wal-Mart.
The nation’s largest retailer failed in its bid to open in the Queens neighborhood of Rego Park after a firestorm of opposition from unions and activist groups, but it remains committed to setting up mega-shop in the city. The question is where.
Plenty of big-box retailers have moved into or expanded here in the last 10 years, with recent notable moves by Home Depot. The national chains broke away from their traditional templates for sprawling one-story buildings with massive open parking lots, and many have adapted well to New York’s confined environs.
As a result, some brokers speculate that Manhattan remains a possibility for Wal-Mart, particularly Uptown.
“I honestly think that they could find the spaces,” Patrick Breslin, president of the GVA Williams Retail Group, said. “It’s just a question of if they are willing to adapt to the location.”
Wal-Mart says that it continues to look in all five boroughs. “The key to everything, and the key to everything in New York, is what’s the appropriate space,” Wal-Mart spokesman Phil Serghini said. He wouldn’t discuss specifics, but said that Manhattan “is not out of the equation.”
Serghini pointed out that Wal-Mart opened a new store in downtown White Plains on July 19 in a “nontraditional site.” It opened in a multilevel former Sears department store, taking the first two levels. He also pointed out that New York City residents are now spending $125 million annually at Wal-Marts outside the city. The Daily News reported in June that the Bronx is the most likely spot for Wal-Mart to open, but Serghini dismissed the suggestion that there is a leading borough.
Breslin is among those who believe Wal-Mart could find space in Manhattan, particularly in Harlem above the West 130s. “You get on the island of Manhattan, it’s going to be successful,” he said. “It’s just varying levels of success.” Breslin, like others interviewed for this story, does not represent Wal-Mart; the company didn’t disclose the names of any brokers it may be working with.
Nicole Meyer, a director at Newmark Knight Frank’s retail division, said Harlem or Washington Heights would offer Wal-Mart access to several different markets and major highways. Meyer recently completed two retail leases in Harlem, including 20,000 square feet for Conway on 116th Street. “Not to say the East Side wouldn’t be successful, but I would think the West Side would be more advantageous,” she said of Harlem.
Others are not so sure. Klara Madlin, a residential broker and president of Klara Madlin Real Estate, said Wal-Mart in Manhattan seems unlikely.
“I don’t see that there is enough space for them, except for East Harlem,” she said. And further downtown doesn’t seem to be their market, she said. “Everybody likes a bargain, but I don’t think Wal-Mart could make it in the 70s or 80s or Greenwich Village.”
Matthew Gorman, managing partner of New Street Realty Advisors, said that he doesn’t see the floor plates and parking in Upper Manhattan that Wal-Mart would need, when its minimum demand would likely be for 100,000 square feet — with high ceilings and few, if any, columns. Suburban Wal-Mart stores, of course, are much bigger than that.
Some big retailers, such as Fairway, which opened earlier this year in Red Hook, can squeeze its customers into formerly industrial areas, but Gorman said he couldn’t see Wal-Mart allowing its shoppers to crash into one another.
“People don’t understand Upper Manhattan when they say that is the only place they could go,” he said.
The Bronx makes more sense, Gorman said. The bridges are short and almost all free. “I think that’s the more likely scenario,” he said. Upper Manhattan just doesn’t have the space, and south of 96th Street is too costly. “I don’t see anyone being able to pencil the numbers when you consider what residential yields you on these sites” south of 96th Street.
Upper Manhattan, above 145th Street, is also zoned “lightly commercial,” making a big-box store even more complicated, said Robert Shapiro, senior director of sales at Massey Knakal. Shapiro specializes in Washington Heights. “I haven’t seen any sites that are large enough to hold a Wal-Mart,” he said.
Then there is the issue of Wal-Mart’s reputation for squeezing its employees on wages and benefits. Michael Palma, a member of Community Board 9, said the company would likely face similar opposition in Upper Manhattan to its difficulties in Queens, but he said he could see space and demand for a Wal-Mart in the area. And big boxes are clearly interested in Uptown. There’s a plan for a Costco and a Home Depot to anchor a 500,000-square-foot retail site — the former Washburn Wire factory — on the FDR Drive between 116th and 119th streets.
Palma pointed out that Wal-Mart would certainly be an upgrade from the many 99-cent stores on Broadway in the 130s and 140s. And Target also seems to be thriving just across the Harlem River in the Bronx. “Those stores are succeeding,” Palma said. “Why Wal-Mart couldn’t, I don’t see any reason. The big thing with Wal-Mart is their reputation.”