(The following article by Kathleen Lynn was posted on the Bergen Record on November 29.)
PARAMUS, N.J. — Expanding its holdings around New York’s Penn Station, Vornado Realty Trust has agreed to pay $689 million for the Manhattan Mall, the Paramus-based real estate company said Tuesday.
The 33rd Street office/retail building — which began life in 1911 as the Gimbel’s department store — is in a major transportation hub, near Penn Station and above entrances to both the subway and PATH trains.
Over the past decade, Vornado has acquired 6 million square feet of office, retail and hotel space around Penn Station and put up giant, Times Square-style signs in the area.
Vornado’s dream is to transform the neighborhood into a destination for shoppers and diners, rather than a place where commuters and travelers just rush through on their way to somewhere else.
Steven Roth, Vornado’s head, has called the redevelopment of the neighborhood a long-term process.
“With so much more value to create, it may be a life’s work,” he wrote in a 2005 letter to shareholders. “Timing and patience are everything.”
He may need patience. The debate over the future of Penn Station, which has been discussed for more than a decade, continues.
Vornado and The Related Companies won a bid in 2005 to expand the train station — the nation’s busiest — west into the Farley Post Office on Eighth Avenue.
Under the proposal, Vornado and Related would build restaurants, shops and a hotel at the station, which is to be renamed for the late U.S. Sen. Daniel Patrick Moynihan, a New York Democrat.
The Penn Station redevelopment plan is on hold, however, after being blocked last month by New York State Assembly Speaker Sheldon Silver. He said the proposal did not do enough to improve conditions for subway riders and Long Island Railroad commuters, although NJ Transit riders would benefit.
Vornado and Related have come back to state and city officials with an expanded plan, proposing that Madison Square Garden also be moved into the post office building, which would allow Vornado to build office towers at the Garden site. Talks on that proposal are continuing.
The Manhattan Mall’s roughly 1 million square feet of office and retail space is almost totally leased. The largest office tenants are Bank of America and the Interpublic Group. Retail tenants include Charlotte Russe, Victoria’s Secret, Foot Locker and Aeropostale.
The mall is currently owned by HausInvest Global, a German real estate firm.
The mall sale includes 812,000 square feet of office space, 164,000 square feet of retail space and 250,000 square feet of additional air rights. The sale is expected to close in the first quarter of 2007.