Staten Island may be the forgotten frontier of New York real estate, however, there are signs that the borough’s period of isolation may be coming to an end.
The area, which has long provided residents suburban living conditions and the option of taking a ferry to work, is set for a revival with the upcoming installation of the New York Wheel.
The new landmark, which is expected to be enveloped by about 300,000 s/f of retail space, may finally introduce the borough to tourists, who seem to have a habit of taking the first boat back to Manhattan after ogling the Statue of Liberty.
Once completed, The New York Wheel will be the largest observation wheel in the Western Hemisphere, and will stand 630 feet tall. It’s expected to welcome as many as 30,000 riders per day during peak season.
Another big attraction expected to draw large numbers of tourists to the north shore is Empire Outlets, developed by BFC Partners.
Joseph Ferrara, principal at BFC Partners, said there has been “unprecedented interest from retailers and entertainment groups from around the globe,” in Empire Outlets.
“Partnering with New York Wheel, Lighthouse Point, the Yankee organization, Snug Harbor & the historic St. George Theater, we as a team will sculpt “Destination St. George” into a worldwide visitor magnet for decades to come,” said Ferrara.
Along with 100 designer outlet retailers, the development will have a gourmet dining destination with a variety of restaurants and cafes.
The project, estimated to cost between $250 and $275 million, will be the first outlet mall in New York City proper, and will include 340,000 square feet of retail space, a 190-room hotel featuring a rooftop venue with waterfront views, a 1,250-space structured parking garage, and a 40,000 s/f food and beverage deck.
Ferrara told Real Estate Weekly at ICSC RECon in Las Vegas last month that the project is nearly halfway leased.
Among the national brands joining Empire Outlets are Nordstrom Rack, H&M, Gap Outlet, Banana Republic Factory Store, White House Black Market, Guess Factory Store, U.S. Polo Assn., Columbia Sportswear Company, Innovation Luggage, Wilsons Leather, G.H. Bass & Co., Lids, Obey Your Body, Starbucks, Walgreens.
Construction is expected to be completed in 2016. Designed by SHoP Architects, Empire Outlets will feature pedestrian walkways to the water and a sustainable green roof.
BFC Partners has entered into a 99-year lease. They, along with the New York Wheel, will pay $2.5 million per year in rent to the City, with additional participation rents once certain ridership and gross revenue milestones are reached.
The two development sites are located steps from the Staten Island Ferry Terminal and orm part of a “Destination St. George” a tourism campaign.
Lighthouse Point will include 100 residential units, a hotel, shops and dining options, public open space, and parking.
“Once they get to Staten Island, there will going to be something to do there. That hasn’t happened in the last… I don’t know how many years,” said Angela Ferrara, the executive vice president for Sales and Leasing for real estate brokerage firm The Marketing Directors.
“You’ll find that a lot of tourists will get off the boat and then take the next boat back. I think the idea is, ‘We got them here. That’s great. Now, let’s keep them here.’ I think with the new wheel and everything that is surrounding that, people will say, ‘Let’s stop here for a couple of hours or for a day.’”
The notion of a pending tourism boom has spurred a drastic jump in property prices. According to Ferrara, the prices of apartments in The Accolade, a luxury condominium building in the St. George area (where the Wheel will be located), have gone up $30,000 to $120,000 since sales launched in April of last year.
“We have sold three-bedroom condominium homes for over a million dollars. That is unprecedented on Staten Island,” she said.
Experts say that the best time to buy was when the project was first announced. However, this carries some risks, such as plans getting shelved or property prices dropping due to a recession. Stuart Saft, who heads the New York Real Estate Practice Group for law firm Holland & Knight, said that the success of the New York Wheel project, and in turn the health of property prices in its immediate vicinity, is tied in to the health of the city’s economy.
“A lot depends upon the strength of the New York City economy,” he said. “The presumption is that the economy is going to remain strong. If the economy weakens substantially and tourism falls off… if we go into recession, all bets are off. But at the present time, I’m very optimistic about the future of New York City as a global center.”
Saft, who worked on the Sea Cliff Towers project in Staten Island, the first co-op conversion in the borough, likened Staten Island to the area around High Line, but held off on predicting an increase in property prices with the same intensity.
“I would be very surprised if, in a shorter period of time, you had as much gentrification in Staten Island as we had in Manhattan as a result of the High Line. But it is the same thing. It is something unique and it will draw people there. I think you’ll see the same thing happen in Staten Island but I don’t think it’ll be as trendy initially,” he said.
Nonetheless, Ferrara advises prospective buyers to purchase now before prices peak.
“When they were just buzzing about all of that coming to Staten Island, people were like, ‘Let me buy early.’ Now, those people took the biggest risk, to some degree, because what if this never happened?” she said.
“Sometimes, people wait until the plan’s really solidified. Well, they’re pretty really solidified now. So buy now. Because once it’s here, it’s a little bit late. This is really the right time to buy.”