In 1994, the Clinton administration's Empowerment Zone initiative placed a 10-year "Upper Manhattan Empowerment Zone" designation on Harlem. The program is meant to revitalize suffering communities with public funds and tax incentives by inspiring private investors to commit to the area. The federal government committed $100 million, which was matched by the state and city, creating a $300-million pot.
In the six years since the designation, New York City as a whole has seen crime drop and lead the nation in job growth. In some areas of Harlem, NYPD numbers show crime has dropped 50%. While UMEZ and private investors, as well as other public fund sources, generated $68 million in the first year of the project alone, most developers and space seekers still did not consider Harlem in their searches. This is finally beginning to change.
As the real estate market tightened, the buzz focused on the shores of New Jersey for office and industrial properties and Brooklyn's housing rentals became trendy. Commercial and residential tenants alike are now, in growing numbers, seeing the proximity of Harlem and its distinctive buildings as too good to overlook.
Harlem USA opened in February 2000 on 125th Street and Frederick Douglass Boulevard, attracting retailers Modell's Sporting Goods, Old Navy and HMV Record Stores and creating hundreds of jobs. The Harlem Commonwealth Council and Grid Properties developed the $66-million urban mall and are now looking to attract minority-owned retailers. Published reports indicate that negotiations are in progress.
A few blocks west of Harlem USA at 1361 Amsterdam Ave. at 126th Street, Urban Box Office has signed a 10-year lease. It will relocate here this winter from 875 Sixth Ave. UBO will reportedly pay between $20 and $30 per sf for 85,000 sf. In the same building, 50,000 sf will be leased by a television prop and equipment firm.
An 11-story co-op has just been completed at 116th Street and Lenox Avenue. The 240 apartments are so hot that a lottery has been devised. To be entered, interested parties must have a total household income of $25,488 to $140,500 before taxes, and they must be willing to pay $4,056 to $14,637 outright and $709 to $2,558 a month in maintenance fees. Levine Builders of Queens developed the project that was funded primarily with public funds. Retailers such as Rite Aid, Met Foods and Petland will also lease space within the building.
When Mayor Rudy Giuliani took office in 1994, he chose to begin selling condemned city-owned property. Developers can bid for and rehabilitate these if they commit to reserving space for affordable housing. Entrepreneurs are purchasing three-story historic brownstones in Harlem for about $300,000. These homeowners are moving into and renovating homes complete with fireplaces, backyards, garages, sometimes even wine cellars, and also renting apartments within them.
Buyers are enjoying purchasing a piece of New York history too. Home first to the Dutch, then the British, it became home to the Polo Grounds in the 1880s and stylish apartments for wealthy Germans, Jews and Irish. After a real estate crash in Harlem in 1904 (similar to its first in the 1830s), Philip Payton and his Afro-American Realty Co. acquired leases on buildings and rented them to African-Americans, making Harlem an affordable and attractive community for the black middle class. The Harlem Renaissance of the 1920s and 1930s saw Harlem as a center of culture and creativity. Throughout the trying times to follow, the spirit of the community persevered and now the attention of the real estate world is returning once again.
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