To the West and North, Chelsea Grows

North Chelsea, Chelsea Heights – even Chelsea Hills.

While none of the new names has caught on for the section of Cheslea north of 23rd Street, the area itself definitely has.

Expanding northward to at least 34th Street, and from Sixth Avenue to the Hudson River, there has been incredible development in Chelsea’s northern section in recent years, as parking lots, commercial loft buildings and low-rise garages have given way to chic new residential developments.

“The neighborhood is moving further north and west each year,” said Gil Neary, who founded DG Neary Realty in 1987 and remembers the days when London Terrace, the block-sized building at 23rd Street between Ninth and 10th Avenues, was the neighborhood’s northern and western outpost. “You’d have to blindfold people to get them to look at an apartment there,” he said.

“Now the northern part of neighborhood is drawing people who like [central] Chelsea and want to live near it,” said Neary.

Overall, the area north of 23rd Street consists of three distinct parts an entire new neighborhood of rental buildings that has sprouted up along Sixth Avenue, a commercial loft district to the west, and, on the far West Side, an area populated by low-rise garages and warehouses that will likely undergo a dramatic transformation, partly as a result of the city moving forward with its plans for Hudson Yards.

Along Sixth Avenue, more than five rental towers have been built between 24th and 31st Street since 1995. The latest, the Aston, was scheduled to be completed by the end of 2003 and is being leased up now. It will add 269 units between 27th and 28th Streets.

Overall, there are more than 2,000 rental units that have been added to the area, including the Capitol at Chelsea, Vanguard, Chelsea Tower and 777 Avenue of the Americas. Neary said there are still a few vacant lots and room for a few new buildings, though no other new projects are immediately planned for the area.

“It’s a whole new neighborhood that has been created over there,” said Neary. “The town where I have my summerhouse, for instance, only has one-third the number of units.”

Douglas Wagner, president of Benjamin James real estate agency, said the Sixth Avenue rental corridor, or “tower district,” is largely populated by “professionals in the early phase of their career, but not fresh out of school.”

In general, he said, the new buildings are getting between $47 and $50 a square foot in rents. Finishes are very high, with features like oversized windows, workout spaces and party rooms.

Despite the slow rental market in Manhattan, Wagner maintains that there is not a glut of rentals in the area. The Capitol, for instance, which has 387 apartments at West 26th Street, is approaching the two-year anniversary of its opening and many people who signed a two-year lease agreement are coming up for their first renewal, he said. Wagner said the units have “come and gone quickly,” and that “lots of people are staying in place.”

But Bonnie Seidler, who works out of Fenwick-Keats downtown office, disagreed. “Rentals have been depressed for a couple of years, and its been depressed along Sixth Avenue. How many people can you possibly bring in?” she asked. Seidler estimated that effective rents normally around $4,500 are down to around $3,000 or so, as a result of incentives like several months of free rent.

The nature of retail along the rental corridor has surprised some, and will be further impacted by a big-box Home Depot moving into 110,000 square feet of space at 28-40 West 23rd Street, between Broadway and Sixth Avenue.

Several other national chains have opened up, and Wagner said it was “shocking” to see the Olive Garden and Best Buy open up shop at The Caroline, another rental building, on Sixth Avenue and 23rd Street.

“I’m surprised to see that in such a sophisticated neighborhood,” he said. “We joke about free pasta refills with a one-year lease.”

Seidler agrees that Sixth Avenue hasn’t seen much of an influx of high-end stores, but said , “I think there will be more high-end later.” She also said the area’s sidestreets “are more interesting and trendy.” Seidler predicted that Home Depot moving in will “wreck havoc for the area, because it will bring in so much car traffic.”

In terms of cachet, Neary also mentioned that there is some “subtle snobbery” that goes on about who lives in Chelsea and who doesn’t that applies to the rental corridor. “People who live in this area will tell you they live in Chelsea,” he said. “But people who live in the center of Chelsea might not say that.

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West of Sixth Avenue extending to Ninth Avenue in the northern part of Chelsea, one encounters a shift, as the rental buildings give way to existing loft construction. The buildings are increasingly being converted from commercial to residential, said Neary, who added that it is “pretty easy” to convert most of the spaces. Seidler said the average apartment might run 1,500 square feet, with 11 to 12 foot ceilings. She said that a 3,000 square foot loft in need of total renovation might cost just under $1 million in the area, though one would have to spend $500,000 on renovation work. A comparable unit in central Chelsea might run $3 million, she said.

Wagner said one of the more interesting sections of the area is just south of Herald Square, between 28th and 31st Streets. “I call it the ‘wholesale district.'”

“It’s earring stores, people selling caps, and it almost reminds you of a market in another country on some days.” In September, sales got underway at the Cass Gilbert Building at 130 West 30th Street, between Sixth and Seventh Avenues. The 20-story commercial structure was converted to 45 apartments, with two to four bedroom lofts starting at $875,000. After only six weeks, 85 percent of the units had reportedly sold. Wagner said the area also happens to be drawing a lot of TV people who use the large apartments as live/work spaces. Overall, Wagner said rents are significantly less than the new rental buildings along Sixth Avenue, in the range of $38 to $42 a square foot.

Further changes to the area may be coming as the Flower Market Association of New York City, which has been in the West 28th Street neighborhood since the 1890s, mulls a move to another part of the city. While there has been periodic talk among the approximately 50 wholesale and retail florists of moving to other boroughs or other neighborhoods, this time it could be more than talk. Wagner, for one, said he “hopes the flower district remains.”

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Meanwhile, west of Ninth Avenue, massive changes are likely to take place in the northern portion of Chelsea up to 34th Street, or even up to 42nd Street, which some consider the neighborhood’s northern boundary.

“Right now, it’s mostly garage buildings and low-rise warehouse buildings west of Ninth,” said Neary. “You’ll probably see a lot of developments over there. Hudson Yards is going to lead to big changes.”

One indication of the new direction the neighborhood is heading in is Hudson Crossing, a 15-story, 259-unit apartment building at Ninth Avenue and 37th Street, which is already fully leased up. Interesting retail, like Hero-Boy and the Cupcake Caf , is also moving in on Ninth Avenue, Neary said.

Olympics or no Olympics, the city has obviously decided that the whole area is going to be redeveloped,” William Dickey of the Dermot Company, which developed Hudson Crossing, recently told The New York Times. The city’s plans for the area include a stadium, expanded Javits Center and 40 million square feet of residential and commercial space over the next several decades between 28th and 42nd Streets.

Seidler said west of Ninth Avenue, between 30th and 40th, is where people are now going to find good deals. A 3,000 square foot space might cost $500,000 to $750,000. “That’s where the bargain seekers are going,” she said. Wagner said rents in the area might run about $35 a square foot.

While these new neighborhoods often seem far afield from the central part of Chelsea, which runs from 14th to 23rd Streets, efforts to come up with new names seem to have stalled.

Neary said ‘Chelsea Hills’ was used for a while, though “only jokingly.” Chelsea Heights was another attempt.

“We also got away with ‘North Chelsea’ for a while,” said Seidler. “But now people are just calling it ‘Chelsea.'”