Times Square's very success breeds hassles

Times Square at night, New York. Photo / AP

After New York tabloids made an issue of panhandling by the so-called desnudas and aggressive costumed cartoon characters, Mayor Bill de Blasio appointed a task force to propose laws to subdue the garish agora for tourists, street performers, vendors and vagrants.

At stake are billions of dollars invested in real estate and the center of a $28 billion tourist industry. Publisher Conde Nast has already left, moving its 3,000 workers downtown. Others intend to follow and vacancies are on the rise. A strengthening dollar threatens foreign visitors' spending, said NYC & Company, the city's marketing office.

"We call it the Crossroads of the World, but when you look beneath the surface, you see this unique area that attracts all these different people, each expecting a different experience," said Robert Kafin, chairman of the Times Square Alliance, the business-improvement district that spurred its rebirth. "That raises all sorts of issues as to how to accommodate them and maintain it as the important economic engine it is."

De Blasio has said he'd consider ripping out its $55 million granite-paved walkway to get rid of the beggars and vendors hawking DVDs, sight-seeing tours and shows. That suggestion brought instant opposition from Kafin and other stake holders such as the Durst Organization, which owns $3 billion worth of buildings in the area, and Transportation Alternatives, which seeks reduced car traffic.

The plazas are here to stay, said Gale Brewer, Manhattan borough president. The need to accommodate 450,000 people a day makes them essential, she said. Yet something must be done to improve the ambiance, Brewer said.

"Like most New Yorkers, if I can avoid Times Square, I do," she said. "We can find ways to make it better."

In the 1990s Times Square rid itself of porn-parlors, video game joints, street hookers and littered side streets. By last year, 91 violent crimes occurred, down from 982 in 1994.

Transformed from the 1960s and 1970s, when its sleaze suffused movies such as "Midnight Cowboy" and "Taxi Driver," the district was rezoned to permit Disney and other retailers to build megastores to anchor office towers that attracted tens of thousands of workers. Each building is adorned with electronic signs so bright that street lights are beside the point.

The area is the centerpiece of a tourism industry that brought a record 56.4 million visitors last year. Crowds got too large for sidewalks to contain, and after the Times Square Alliance sought 50 percent more pedestrian space former Mayor Michael Bloomberg's administration in 2009 came back with a more radical idea -- barring vehicles from five blocks of Broadway. Bloomberg is founder and majority owner of Bloomberg News parent Bloomberg LP.

"Crack has been replaced by solicitors for comedy shows," said Erik Schmall, a commercial real-estate broker with Savills Studley, who has placed several tenants into offices there.

Now, 17,000 hotel rooms represent 21 percent of the city's total. Theaters attract 12 million a year. Stores and restaurants generate sales of $1.7 billion, according to the Times Square Alliance.

Yet above the streets, there is disquiet. Real-estate data show a weakening demand in Times Square office space, according to Savills Studley, a commercial real-estate firm. Almost 13 percent of the district's Class A office space was available in June, compared with about 6 percent in December 2013.

In 2014, Conde Nast vacated its space at 4 Times Square, which cost $80 to $90 a square foot, for One World Trade Center, at rents of about $69 per square foot.

The company wanted to help the renewal of the World Trade Center, said spokeswoman Patti Rockenwagner.

Law firm Skadden, Arps, Slate, Meagher & Flom also announced its intention to leave the building in 2019.

Other companies clearing out of the area include Markit Ltd., a financial-information services firm, which went to Hudson Yards; and Akf Group, an engineering firm, which moved to lower Manhattan, according to Savills Studley.

While the area's access to 11 subway lines and the Port Authority bus terminal makes it easy to reach, workers in focus groups last year complained about panhandlers, vagrants and crowds, Goldstein said.

"I'm concerned that if the public space degrades to a certain point, and tenants have other choices to the west in Hudson Yards or downtown in the World Trade Center, they will not elect to take space here," she said.

As rents soar, it becomes difficult to attract tenants other than national stores or restaurant chains, Kafin said.

"How do you prevent it from being the same as a suburban shopping mall?" he said.

Some grieve that the same forces that brought the Disney and M&M stores, Red Lobster and Olive Garden, also brought an end to uniquely New York pockets such as 48th Street's Music Row, a string of instrument shops and sheet-music emporiums where Bob Dylan could find a harmonica or Jimi Hendrix a guitar pick. In December, the Edison Hotel folded its Polish-Jewish luncheonette over the protests of 10,000 petition-signers who were avid consumers of its corned beef and borscht.

"There's almost nothing of New York left in that neighbourhood," lamented Jeremiah Moss, whose blog "Vanishing New York," suggests that such endings diminish the city's soul. "The only remaining bit of chaos and grit is the tourist- hustling cartoon characters and the topless ladies."