Macmillan to bring relief to Union Sq

Real Estate Weekly, Oct 16, 1991

Macmillan to bring relief to Union Sq.

The School Division of Macmillan/-McGraw-Hill is expected to sign a lease for 120,000 square feet in 10 Union Square East, bringing relief and hope to not only the developer William Zeckendorf, but the city and the Union Square area, which lost a major corporate tenant last year.

The mayor's office for economic development and the 14th Street Local Development Corp. were instrumental in luring Macmillan and 400 employees downtown from its current location at the Maxwell Macmillan Building at 866 Third Avenue at 52nd Street. Macmillan, who it was believed was considering moving to New Jersey or Connecticut, would move into roughly one third of the commercial portion of the mixed-use tower -- four towers above are residential condominium. Last year, Integrated Resources the building's sole tenant vacated its roughly 300,000 square feet when it filed for bankruptcy.

The value of the pending lease is said to be $34 million over 10 year.

The area, which in recent years made a comeback lead, in part, by the Zeckendorf Towers office and condominium development, suffered somewhat of a setback when Integrated moved out of the building.

Zeckendorf's partners in the building are Elie Hirschfeld and KG Land. With $67 million in Industrial Development Agency bonds, financing was provided by Equitable Life.

"(The transaction) is going to trickle down and have an impact on stores and restaurants," said Rob Walsh, director of the 14th Street Local Development Corp. In the past five years, Walsh said, dozens of restaurants have opened in the area.

Walsh said the LDC, the New School for Social Research, and the city's Department of Business Services assisted Zeckendorf's efforts by making pitches to the company over the last few weeks. And, he said, they will continue their efforts to lease the rest of the space.

"Zeckendorf is doing it and we're ready to jump in and sell the neighborhood," said Walsh.

Walsh said the area has become an academic, cultural and publishing hub in the city. According to surveys done by his office, there are more than 100,000 full- and part-time college students, professors and administrative workers in the area from such schools as New York University, The New School, Cordozo Law School, and Cooper Union. There are also, Walsh said, more than 70 cultural institutions. Coincidentally, the renovated 499-seat Variety Arts theater held its officially opening on the same day MacMillan made its decision.

According to local merchant Ken Gidden of Rothman's men's store, at the corner of 17th and Park Avenue South, "I think it's a great neighborhood to work in."