By Konrad Putzier
The 50 million plus visitors flocking to Times Square each year may soon have a few more beds to choose from.
A partnership between Soho Properties and MHP, formerly known as Murray Hill Properties, purchased 560 Seventh Avenue, the current home of Parsons The New School of Design, for $61 million.
Although the project is still in its early stages and no definite plans have been made, a spokesman for Soho Properties said that the company has a “broad conceptual idea for a hotel and retail space.”
The building was sold by Parsons, which had received it as a gift from philanthropist Albert List in 1978. Bob Knakal, of Massey Knakal Realty Services represented the seller, while MHP was represented in-house.
The property is in the Special Midtown District, and zoning allows for hotel and commercial development.
Garment Center Congregation has leased a portion of the ground floor and basement through 2076, but terms of the lease allow the landlord to provide the congregation with an alternate location for their synagogue and offices after May of 2017 if the landlord wishes to demolish the building.
Soho Properties’ spokesperson said that the company looks “forward to working with the Garment Center Congregation in planning the refurbishment of the existing synagogue on the property.”
Earlier this year, the fashion and design school had announced that it would leave the building by early 2014 and move to Greenwich Village.
The New School is currently building a University Center at the corner of Fifth Avenue and 14th Street. Designed by Skidmore, Owings and Merrill, it is expected to cost $350 million and will house Parsons.
The school is also expanding another building on 16th Street, The Albert and Vera List Academic Center.
Soho’s and MHP’s hotel proposal is the third in recent months for a neighborhood that attracts 370,000 people every day, and where shoppers spend $6.5 billion annually.
In August, Spanish hotel developer RIU Hotels and Resorts began work on a new 600-room hotel on the corner of West 46th Street and Eighth Avenue, a year after it bought the site one block west of Times Square for $111 million.
Just north of the Parsons building, at 701 Seventh Avenue, a partnership between the Witkoff Group, Maefield Development, Infinity Urban Century and Vector Group is planning to build a 340,000 s/f multi-use complex on a site it purchased for $430 million. The complex will include a hotel.
A new 487-room Hyatt Hotel on Times Square at 45th Street is scheduled to open in January 2014.
Tom McConnell, head of C&W Global Hospitality, said that two thirds of the new hotel rooms opening in Manhattan this year are west of Sixth Avenue between 34th and 57th Street.
“With all that supply coming in, the occupancy hasn’t gone down. Anything opening up in Times Square would probably be absorbed,” McConnell said, adding that occupancy around Times Square has always been among the highest in New York.
McConnell also noted that the Times Square area today has far fewer possible development sites for hotels, and that the current development pace is not as high as in other areas, such as Chelsea.
He added, “I think New York continues to draw a massive number of visitors. We put more supply into this market and the occupancy still stays high.ˮ
While New York’s hospitality industry is booming, it has also seen a serious rival emerge in Airbnb — a website that allows users to rent out rooms in their private apartments.
In response to criticism from city officials, Airbnb yesterday (Tuesday) released a study by HR&A Advisors that claims Airbnb “generated $632 million in economic activity in New York in one year and supported 4,580 jobs throughout all five boroughs.”
The study also claims that on average Airbnb guests stay longer than hotel guests and spend more money in the city.
Moreover, it states that renting out their primary residences has become an important source of income for many New Yorkers.
Officials consider subletting through Airbnb an illegal practice that damages the hotel industry and threatens apartment safety.
Two weeks ago, attorney general Eric Schneiderman placed a subpoena on Airbnb requiring it to release information on its users in New York. In response, an Airbnb user started a petition to the city urging it to change its laws.