The retailers in the Newsweek building, at 57th and Broadway, are not a chic bunch. The Cosmic Restaurant and Coffee Shop is a tile-and-Formica diner. There's a Ricky's cosmetics, a CompUSA. And, facing southeast, there's Coliseum Books -- until it closes forever on January 20.
The 27-year-old store is, in fact, much like the New York Coliseum itself. Both were a little seedy, bits of pre-Giuliani New York. And both were doomed by a sense that dumpy old Columbus Circle may finally become a hot destination.
The mammoth AOL Time Warner Center -- going up on the site of the old Coliseum and opening in mid-2003 with a high-end mall, Mandarin Oriental Hotel, luxe apartments, and Jazz at Lincoln Center -- is of course why. Local landlords have big expectations, and rents are rising. Coliseum Books paid $70 per square foot; the new asking price is about $200. That sealed it, says partner George Leibson, who adds that the store had been losing money since a Barnes & Noble opened a few blocks north.
This sort of commercial gentrification is usually slow (think Columbus Avenue in the 1980s). It's also the second try in this area, after the Invasion of the Theme Restaurants, circa 1994. But the huge sums involved now mean faster, bigger changes. Cosmic signed a new lease recently, going from $40 to $120 a foot; the owners say they expect another jump in two years. This despite the recession and a surprising number of empty stores nearby (including Planet Hollywood and a big Lechters).
Whether one building can remake a whole area is debatable. Worldwide Plaza was supposed to transform Hell's Kitchen and lead midtown westward, but few followed. AOL, however, has already been joined by Random House's new building at Broadway and 55th Street, and a glass tower is planned atop Hearst's building at Eighth and 57th.
According to AOL Time Warner leasing consultant Robert K. Futterman, the developer hasn't had to lower rents since September 11. Futterman is also the leasing agent for Random House, and says the same is true there: "We're still getting over $100 a foot." Is he worried? "We'd priced it realistically," he says, adding that the big drops have been "in tourist locales -- Times Square, SoHo."
Of course, until next year, everything is guesswork. One big wait-and-see sign comes from Wien & Malkin, owners of that empty Lechters. W&M director of marketing Fred C. Posniak won't confirm who the new tenant is (rumors say it's Payless Shoes), but he will say it's a short lease. After that, adds Posniak, his plans are clear: "We will definitely benefit from the changes in the neighborhood."