Commercial districts grapple with slowed
return to business as usual
BY GREG DAVID
THE CITY
Before the pandemic, 60,000
people a day came to
Hudson Square in Lower
Manhattan. Despite the recovery
from the COVID shutdown, now
only about 15,000 people show up
most weekdays.
In Flatiron, there is usually a
line waiting to get into the new
Harry Potter store on Broadway at
22nd Street. On each of the other
corners of the intersection, large
stores remain vacant.
At the Garment Center, traffi c
has rebounded to 55% and the
district’s many hotels are fi lling
about 60% of their rooms, says
the Garment District Alliance.
But people arriving into the
city, especially through the Port
Authority bus terminal, navigate
an increased number of homeless
people, offi ces, some of whom
were taking over two outdoor
restaurant structures at night
until they suddenly were removed
over this past weekend.
Cranes loom large over construction at 4 Hudson Square.
“When people come back
they look and say ‘Wow, what
happened?’ said Jerry Scupp,
vice president of the Garment
District Alliance, on a recent walk
through the business improvement
district, or BID. “To those
of us who have been here during
the pandemic, it looks so much
better.”
Labor Day was supposed to
bring a return of hundreds of
thousands of office workers,
breathing life into the city’s
hard-hit business districts.
Instead, the rise in coronavirus
cases coinciding with the
Delta variant, and warnings
from health authorities that vaccinated
people can still transmit
COVID, have put those districts
into a state of limbo as companies
postpone their return to the offi
ce for months.
At risk is the city’s fragile economic
recovery and maybe even
its long-term future.
“We are in a fi ght for survival
—and don’t take survival for
granted,” said Winston Fisher,
owner of offi ce buildings and a
civic activist.
Last week, the Partnership for
New York City reported that its
most recent survey of members
shows only 23% of Manhattan
offi ce workers have returned to
their buildings, and that companies
expect to increase that
fi gure to only 41% by the end of
September. In May the members’
expectation had been that 75% of
workers would be back right after
Labor Day.
Vacant Storefronts
The business districts examined
by THE CITY show both
the progress that has been made
and how much ground remains to
be made up.
Hudson Square is eerily quiet
on a weekday. The neighborhood
is primarily home to many tech
and media companies, the two
sectors reportedly most reluctant
to order a return to the offi ce.
During the pandemic the business
improvement district has
A shuttered storefront in Manhattan’s Flatiron District
pursued its extensive capital program
to add pedestrian space and
attractive street furniture, and in
recent months has increased its
programming for events including
live music and art. Several
months ago, the NYPD removed
two homeless encampments in the
area that had unsettled those who
had returned.
The idea is to make it so that
when people do visit the area,
especially as part of a hybrid
working experience, they will
want to continue coming back.
“When they put a toe in the
water we want them to enjoy the
experience,” said Hudson Square
BID CEO Ellen Baer.
In Flatiron, Credit Suisse has
returned most of its staff to its
Park Avenue building but nextdoor
New York Life doesn’t have
many people back. Large vacant
storefronts remain a jarring sight,
with a 20% vacancy rate.
“We need stores to reopen,”
said Flatiron/23rd Street Partnership
Executive Director James
Mattham.
With few additional office
workers expected, the area’s near
term also depends on how many
students Baruch College brings
back to campus as CUNY adopts
PHOTOS BY HIRAM ALEJANDRO DURÁN/ THE CITY
a mostly hybrid approach to its
fall semester.
Seeking Quality Space
The BIDs clearly see that as their
mission, with the groups serving
the four districts having sharply
increased their programming of
events ranging from children’s art
projects and closed-off streets, to
ping pong tournaments and music
performances in parks.
Long-term, the debate continues
over how the pandemic has
reshaped the need for offi ce space.
A June study by the Federal Reserve
Bank of New York, based on
a survey of companies in New York
and New Jersey, projected that 16%
of all work will be done remotely
after the pandemic, about double
the fi gure before March 2020. That
fi gure is likely to be higher in New
York City, the study said.
The real estate firm CBRE
estimates an overall reduction of
9% in the need for offi ce space in
Manhattan.
“Nine percent will be a lot
less dramatic than people have
assumed,” said Nicole LaRusso,
senior director of research and
analysis. “We are optimistic that
office-using employment will
continue to grow.” CBRE and
others predict a “fl ight to quality”
as companies move into new or
renovated buildings with modern
systems and more light and air.
Older buildings will have to be
renovated or converted to other
uses, she added.
Some companies are willing to
bet huge sums on the assumption
that tenants will want to upgrade.
SL Green, one of the city’s largest
commercial landlords, is spending
more than $2 billion to construct
a new offi ce tower at 1 Madison
in Flatiron with 1.4 million square
feet of offi ce space.
“I don’t think the Delta variant
would change anything that tenants
are doing for their 5- or 10-year
long-term planning and that really
is evident by the ink on their leases,”
CEO Marc Holliday said last month
on an earnings conference call.
He isn’t alone. Google is close to
completing a new building in Hudson
Square and the new headquarters
for Disney continues to go up.
The two companies will eventually
house 5,000 additional workers.
This article was originally
published on Aug. 31, 2021, by
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