Harlem is poised to usher in a bright future while celebrating its traditions. New commercial and residential developments are joining museums, art galleries, elegantly refurbished brownstones, a variety of retail stores and fine restaurants to make Harlem one of the most exciting and bustling neighborhoods in New York City.

Best known as a destination for visitors seeking to experience live jazz, theatre, dance, and delicious soul food, the 125th Street Corridor boasts a bustling retail and entertainment corridor and a small, growing commercial office market.

Rezoning Creates Opportunities
Recently approved rezoning will allow over 2 million SF of additional commercial office and retail space, and approximately 4,000 new housing units. The Harlem business district will expand eastward as the 6-acre East 125th Street site (between 2nd and 3rd Avenues and 125th and 127th Streets) is redeveloped as part of the East Harlem redevelopment plan.

Who's Already in Harlem
A wide range of companies and institutions are located in Harlem, including Columbia University, Madame Alexander Doll Company, Sylvia’s , the New York Academy of Medicine, Verizon and former President Bill Clinton maintains an office on 125th Street. Current retailers include Citerella, Chuck E. Cheese’s, Fairway, H&M, M.A.C. Cosmetics, Marshall’s, Old Navy, Staples and Sony Theatres .

Harlem boasts a large and active cultural community. The presence of art, cultural, and academic institutions has attracted a well educated workforce and is creating a vast and talented labor pool to draw from. More than 800,000 visitors come to Harlem each year to experience the cultural and entertainment attractions, such as art exhibitions, Book Fairs and the Jazz Festivals.

A World-Renown Cultural Mecca
Cultural Institutions which call Harlem home include: The Apollo Theatre, the Casa Frela Gallery, the Harlem School of the Arts, Lenox Lounge, Minton’s Playhouse, the National Jazz Museum, the Studio Museum, the Schomburg Center, and the Victoria Theatre, among others.

Residential Development in Harlem
Residential development is growing in Harlem. Recent additions to the Harlem housing stock include: The Langston, a 180-unit, Gotham Organization rental development at 68 Bradhurst Street, Avalon Bay’s Avalon Morningside Park, a 20 story, 300-unit rental development at West 110 and Morningside that is scheduled for leasing in May 2008, the 250-unit Kalahari at West 116th Street, and the Dwyer condominium located at St. Nicholas and 123rd Street.

Surrounding the 125th Street corridor are several, well established residential neighborhoods such as Hamilton and Washington Heights, Sugarhill, Inwood and the ever growing Morningside Heights, which is quickly becoming one of New York’s most dynamic places to live.

Harlem is easy to access via a variety of transportation options:

• Ten convenient subway lines: A, B, C, D, 1, 2, 3, 4, 5, and 6 
• Metro-North Railroad at 125th Street with a second station located at 1818 Park Avenue 
• Nineteen bus lines including the M35, M100, M101, and the M60 connector to LaGuardia
• The area is also connected to the Bronx, Brooklyn, and Queens via the Triborough Bridge, Harlem River Drive, and the Henry Hudson Parkway
  

Harlem’s Central Business District is considered part of the Upper Manhattan submarket, which consists of 4.8 million SF of office space.

• Vacancy Rates
  Vacancy rates for the area ended the 1st Qtr 2008 at 8.1 percent, with a 0.0 percent vacancy for the existing 250,000 SF of Class A space. There is nearly 393,000 SF of Class B & C office space currently available with additional office space due to come on line in 2009.
• Average Asking Rents 
  Average asking rents for the overall Harlem market are $40.50 per SF.  Rents for new Class A construction are expected to be in the upper $40’s to upper $50’s per SF, before incentives.

More than $25 million in City, State and Federal funds have been secured for public improvements in Harlem.

West Harlem Waterfront
Work is continuing on a $21 million dollar reconstruction of the West Harlem Waterfront bounded by 125th and 135th Streets. The construction of the Harlem Piers will create the following:

• More space for fishing and recreational boating 
• Ferry Service to Midtown and Lower Manhattan 
• Biking and Jogging paths 
• Enhanced pedestrian access

Streetscape and Inter-modal Improvements
Also planned for 2008 is a $5 million upgrade to 125th Street between Broadway and the Harlem Piers. Improvements to the 125th Streetscape will create a more pedestrian friendly environment, truly creating a river-to-river boulevard that will improve connections between various modes of transportation. Improvement will include:

• New sidewalks 
• Landscaping along the street 
• More lighting, street furniture and artistic elements
  

Commercial Projects
Many development projects are planned or currently underway in Harlem. There are several development sites ready or nearly assembled for future development.

• Harlem Park – A 650,000 SF, mixed-use retail and office building, developed by Vornado, will be first Class A office tower to rise in the Central Business District in nearly 40 years. Major League Baseball’s cable television network and Inner City Broadcasting are expected to occupy approximately 200,000 SF for media production and office space. 
• Columbia University Expansion – A $7 billion project to expand the campus by 17 acres on the western end of the corridor and will create more than 6.8 million SF of academic space; new civic, cultural, recreational, and commercial facilities; and public open space. 
• East 125th Street Development – A 1.7 million SF mixed-use project will anchor the eastern end of the 125th Street corridor and will include Class A office space, media production space, local and national retail, entertainment, and residential uses. 
• East River Plaza – Forest City and Blumenfeld are developing a 500,000 SF retail complex on the Harlem River Drive between 116th and 119th Streets. Committed tenants include Target and Best Buy. 
• Victoria Theater – This historic theater will be redeveloped into a 300,000 SF mixed-use building housing the Classical Theatre of Harlem, The Harlem Arts Alliance, and the National Jazz Museum in Harlem. Additional proposed uses include a hotel and condominiums.

The estimated savings from the following as-of-right programs can total $15 per SF or more per year. (See table below for sample benefits calculation.)

Relocation and Employment Assistance Program (REAP) ^{(1) (2)}

• Annual credit against City business tax of up to $3,000 per employee for companies that relocate from outside NYC or from Manhattan below 96th Street
• Benefits are available for up to 12 years, refundable for first five
• Benefits are available for all jobs moved and created over the first five years, up to the greater of 100 and twice the initial number of employees
• Company must have been operating for 24 months before the start of the tax year during which it relocated
• Minimum required investment of $25 per SF on leased space, or the building must be improved by 50 percent of its appraised value

To apply, download this REAP Application (PDF) maintained by nyc.gov.

Commercial Expansion Program (CEP) ⁽¹⁾
A credit of up to $2.50 per SF per year for five years is available to tenants signing qualifying leases in pre-1999 buildings with at least 25,000 SF of floor area. To be eligible for the program, minimum lease terms and investments are required as indicated below:

• Minimum lease term must be (a) three years if 125 people or fewer will be employed in the premises; or (b) 10 years if more than 125 people will be employed in the premises
• Minimum investment level must be at least (a) $2.50 per SF for leases of less than 10 years and for renewal leases of 10 years or more that include newly leased space; (b) $5.00 per SF for renewal leases of 10 years or more involving only previously occupied space; and (c) $25.00 per SF for new and expansion leases of 10 years or more

To apply, download this CEP Application (PDF) maintained by nyc.gov.

Industrial and Commercial Incentive Program (ICIP)

• Partial exemption from increases in real property tax that would otherwise result from construction or renovation of commercial buildings
• Minimum expenditures required
• Benefits depend on location of property

To apply, download the ICIP Application (PDF) maintained by nyc.gov.

Energy Cost Savings Program (ECSP) ^{(1) (3)}

• 12-year program providing discounts of up to 45 percent on delivery portion of electric and gas bills
• To qualify, building must be receiving ICIP benefits or be leased from the NYCIDA, City of New York or certain other public agencies

To apply, download the ECSP Application (PDF) maintained by nyc.gov.

Empire Zone (EZ)
State program which aims to give companies that increase employment in the area the opportunity to operate on an almost “tax-free” basis for up to 10 years in designated areas of New York State, with additional savings available on a declining basis in years 11 through 15.

For more information or to apply, contact Sandra Morales DeLeon at the East Harlem Business Capital Corporation: phone (212) 427-6590, e-mail: smdeleon@ehbcc.org  or visit www.empire.state.ny.us .

Upper Manhattan Empowerment Zone (UMEZ)
Federal program that seeks to revitalize distressed communities by using geographically targeted public funds and tax incentives as catalysts for private investment. Harlem, East Harlem, Washington Heights and Inwood all fall within Upper Manhattan Empowerment Zones.

Businesses that are located within the Zone and meet the eligibility criteria of the Zone may receive capital funding via grants, loans, loan guarantees and equity investments. For more information or to apply, visit www.umez.org .

Note:
* (1) Program not available to retail stores.
* (2) Program not available to not-for-profits.
* (3) Program not available to not-for-profits if services are performed at this location

For more information about Harlem or any of our other Central Business Districts, please contact:

Christopher Shepard
Senior Project Manager, Business Development – Real Estate
cshepard@nycedc.com
(212) 312-4221