(Bloomberg) — A massive office tower taking shape next to Grand Central Terminal in Manhattan is the latest evidence that the pandemic hasn’t diminished the real estate industry’s appetite for city-shaping projects.
RXR Realty and TF Cornerstone’s plans for a 1,575-foot-tall tower (480 meters), which would be among the city’s tallest, were recently approved by the city council, clearing the way for a mixed-use building on the site of a Grand Hyatt that includes more than 2 million square feet of office space and up to 500 hotels rooms.
The project, dubbed 175 Park Ave., is what city officials envisioned when they rezoned East Midtown to promote the development of new office towers near Grand Central, said Jeff Nelson, a senior vice president at RXR.
“We’ve always strongly believed the city will continue to be the magnet for talent and the economic engine that it has been historically,” said Nelson. “If you think about where the city’s center of gravity will be, it will be around Grand Central.”
When 175 Park opens, it will join a nexus of high-end office towers beckoning to the financial companies that have traditionally called the area around Grand Central home. Others include JPMorgan’s planned headquarters nearby on Park Avenue, as well as SL Green’s One Vanderbilt. A little further uptown, Citadel plans to move into 425 Park Ave. A separate hub is emerging on the west side, where Gov. Kathy Hochul’s plan to redevelop Penn Station includes several new office towers just east of Hudson Yards, which has already proven appealing to tech and financial firms.
The Grand Hyatt site has long been famous. Donald Trump launched his career as a real estate developer when he reclad the old Commodore Hotel with a glass facade. In 2019, RXR and TF Cornerstone partnered to redevelop the site, and began laying the groundwork to erect a new building.
The planning process was complicated because the city and state both have interests in the site, increasing the number of government agencies that had to sign off on the plans. Now that the entitlement process is complete, the developers will spend next year arranging construction financing and reaching out to potential tenants, with plans to start demolition in 2023.
In addition to office space and a hotel, the development would provide hundreds of millions of dollars for infrastructure and transportation improvements, according to a statement from city council member Keith Powers. That would help pay for a new 5,000-square-foot transit hall and a new subway entrance on East 42 Street as well 25,000 square feet of public terraces that wrap around the building. The project also includes 10,000 square-feet of retail space.
The transit hub, which brings commuters into Midtown on the New York City subway and the Metro North Railroad, is going to get busier when the Long Island Rail Road begins stopping at a new East Side Access concourse. More than 70% of the city’s commuters currently live within an hour of 175 Park, Nelson said.
(Adds retail space at bottom of story. A previous version corrected description of Trump’s project at Commodore Hotel in seventh paragraph.)
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