Friday, February 1, 2008

Office Tower to Rise in Harlem for Baseball TV Network

Major League Baseball plans to build a home on 125th Street, Harlem’s premier boulevard, for its cable network, which is scheduled to make its debut early next year with some 50 million subscribers, real estate and baseball executives said on Wednesday.

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Swanke Hayden Connell

A proposed building at 125th Street and Park Avenue.

The planned building, to be developed by Vornado Realty Trust, would rise 21 stories in an interlocking set of luminescent glass cubes at 125th Street and Park Avenue and would be the first prime office tower to be built in Harlem in more than three decades.

Vornado is also negotiating with Inner City Broadcasting, the second-largest radio broadcasting company aimed at black listeners, to move to the planned tower from its Midtown offices, according to real estate executives and local officials.

The Vornado project is an expression of how sky-high rents in Midtown Manhattan have contributed to Harlem’s renaissance, pushing residential developers in particular to build in the once economically struggling community. The Vornado project, to be called Harlem Park, would be the first major office tower in the area since the construction of the State Office Building, also on 125th Street, in the early 1970s.

But Vornado still has hurdles to cross, and if the project advances, it would not be the first to hold a groundbreaking at the site. Three years ago, Gov. George E. Pataki and Mayor Michael R. Bloomberg held a press conference there in anticipation of a $236 million hotel and retail project that never materialized.

Vornado is seeking an exception to proposed rezoning that would impose height restrictions on buildings along 125th Street before it starts construction in the spring, and Major League Baseball is negotiating with the city for an incentive package. Some elected officials are also seeking assurances that the project will provide jobs for local residents and will not displace small businesses in the area.

“We want to know about jobs and we want to protect indigenous businesses,” said city Councilwoman Inez E. Dickens, whose district includes the site, now a vacant lot.

Still, city officials are optimistic that a national developer like Vornado and a major tenant like Major League Baseball will propel the project forward.

“Harlem Park will be the area’s first Class-A office tower in decades and will attract major tenants, showcasing the economic growth under way in Harlem,” said Robert C. Lieber, the deputy mayor for economic development. “We’re still negotiating with Vornado and Major League Baseball, and if we are able to get it done, it will be a home run for the entire area.”

Real estate executives said that Major League Baseball was completing negotiations to lease about one-fifth of the planned 630,000-square-foot building. That would include the second and third floors for broadcast studios and editing, as well as the top two floors of the tower for the network’s executive and sales offices.

The area around Park Avenue is still frayed and has not seen as much development as other stretches of 125th Street. But Harlem has changed dramatically.

The average price for new apartments in Harlem has hit $895,000. The historic Apollo Theater on 125th Street is in the midst of a $96 million restoration and expansion. Two hotels are under development nearby, and national retailers like Old Navy, Starbucks and Sony Theaters have moved onto the boulevard. Columbia University has plans for a new $7 billion campus on 17 acres to the west.

Vornado took over the site at Park Avenue last year, after the hotel project died. The company said then that it viewed the spot as ideal for a commercial tower because it sits close to a subway stop, a Metro-North train stop and what will be the northern terminus of the Second Avenue subway. It has nearby highway access to the airports and has nostalgic appeal because it is also less than two miles south of 155th Street and the former site of the Polo Grounds, where the New York Giants played, and Yankee Stadium, in the Bronx.

Vornado hired Swanke Hayden Connell Architects. But it still needed a blue-chip anchor tenant for the project in order to begin construction. And Major League Baseball, which wanted to enter the lucrative world of cable television, needed space.

The league’s new network, like the channels already operated by the National Basketball Association, the National Football League and the National Hockey League, will offer a mix of live games, studio-based shows and archival, fantasy and reality programming. League-owned networks are vehicles to appeal to fans who want the type of concentrated fix on a single sport that they cannot get from ESPN or the local channels that carry teams’ games.

Unlike the N.F.L., baseball chose not to wage a protracted fight against cable operators to extend its subscriber rolls; it ensured major distribution by giving Comcast, Time Warner and Cox shares in the network that total 16.67 percent, the same stake that had already been provided to DirecTV for being the first to agree to carry the channel. Because of that deal, the baseball network is expected to be one of the most successful start-ups in television history.

After searching for space in Manhattan, Queens and New Jersey, the league’s broker, CB Richard Ellis, brought it to the Vornado project on 125th Street, where proposed rents are half those of similar buildings in Midtown. Tenants could also get tax breaks. Since Vornado does not expect to complete the tower until 2010, Major League Baseball has found temporary space in Secaucus, N.J.

(Sam Zell might think about this as a possible new home for WPIX, whose lease in the historic midtown Daily News Building is up in 2010 , with rumors of a rent increase to double that of the current lease? BD)

The city is set to rezone 125th Street and restrict building heights in such a way that the tower would be about 40 feet too tall. The company is hoping for an exemption.

But local officials are also concerned that the current wave of gentrification is displacing not only longtime residents, but also small businesses on 125th Street that had stuck it out through the bad times in Harlem.

Major League Baseball’s decision “is an exciting way that they can deepen their relationship with the African and Hispanic communities,” said Robert J. Rodriguez, chairman of Community Board 11. “We’re interested in seeing how that develops. As a community, we recognize how an office development could add vibrancy to the surrounding community. But we remain concerned about how this development proceeds and about jobs for local residents.”

Richard Sandomir contributed reporting.

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