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.”