Google Deal Sealed: Chelsea Market is Off the Market | chelseanow.com

Google Deal Sealed: Chelsea Market is Off the Market

Snowflakes flew when photographer Christian Miles visited Chelsea Market; not during the storm of March 21, but on February 7 — one day after news broke that Google was likely to purchase the iconic building (a deal sealed this week). | Photo by Christian Miles

BY WINNIE McCROY | In a move that cements Google’s commitment to the West Side tech corridor, the Internet giant announced on Tues., March 20 their purchase of Chelsea Market from Jamestown for $2.4B. The two companies have agreed to work together to ensure a smooth change of ownership, with Jamestown retaining its role as a manager of the building’s retail and food hall presence.

Google was already the largest tenant in the 1.2 million-square-foot former Nabisco factory complex, having leased about 400,000 square feet of space. In 2010, Jamestown sold Google their headquarters at 111 Eighth Ave. (directly across from Chelsea Market) for $1.77B. Their New York offices have grown to about 7,000 employees from more than 70 countries, with large teams focusing on projects.

“It’s been eight years since we purchased [111 Eighth Ave.], but not before taking on additional space as a tenant in Chelsea Market and 85 10th Ave. Today, we’re excited to announce we’ve closed a deal with Jamestown Properties to purchase the Manhattan Chelsea Market building for $2.4 billion,” said David Radcliffe, Google VP of Real Estate and Workplace Services, on the Google blog.

Back then, local preservationists and other concerned community members said it was only a matter of time before Google expanded their footprint to Chelsea Market. These fears were intensified when, as part of a broader effort to add to the city’s inventory of available office space, Jamestown convinced the city to change zoning and approve a 300,000-square-foot addition to Chelsea Market. Now, those fears have come home to roost among critics who feel the deal undercuts the High Line, which will be cast in shadows should Google go vertical.

In a February 2018 interview with this publication, Save Chelsea’s David Holowka (who is also a member of Community Board 4’s Waterfront, Parks & Environment Committee) expressed concern that “…if they [Google] are allowed to build out their development rights directly about the High Line and Pier 57, they will be sending their employees to work directly above two public parks,” adding in a March 20 phone interview, “We hope they would consider doing [vertical expansion] where it will have less impact on the [High Line] park.” Holowka also said that “Jamestown’s ‘multiple-block technology corridor’ seems like part of a vision that’s been around for five plus years. Their promise to do that may have had a bearing on securing rights to the space directly above Chelsea Market and the High Line [back in 2012].”

Google owns the building, but they’re walking hand in hand into the future with Jamestown, by retaining their role as management for Chelsea Market’s retail and food hall elements. | Photo by Christian Miles

For Jamestown, a German investment and management company focused on income-producing real estate in the US, this long game is all part of business. Now, Jamestown stands to make a huge profit from their original investment of $225M in 2011. This billion-dollar-plus trade is expected to boost the city’s investment-sales market.

“For Jamestown, this is the highest profile example to date of our unique approach to creating value, but it’s consistent with transformative projects we’ve successfully undertaken across the country,” said Michael Phillips, President of Jamestown. “It’s a combination of identifying underutilized locations, creative and visionary repositioning, value-creating management, rigorous financial analysis, and patience.”

It took about 15 years of patience. In 2003, Jamestown purchased a 75 percent interest in Chelsea Market, transforming the site by adding a food hall and focusing on attracting tech, media, and other creative tenants to the upper floors. Now, Chelsea Market is visited by more than 500,000 locals and tourists every month. The food hall has made the property extremely attractive; so much so that Google has said they won’t alter the retail aspect at all. (It is unclear how the sale will affect upstairs tenants, including the Spectrum news channel NY1, the Food Network, and Major League Baseball — which has a lease there until 2022.)

“Chelsea Market is a cornerstone of the Chelsea-Meatpacking district, and has been serving the local community for over 20 years,” Radcliffe said. “The iconic ground floor market attracts visitors from all around the world and provides a great experience for foodies and shoppers alike. With our purchase of the building, we’ve agreed to work together with Jamestown to ensure a smooth transition with little or no impact to the community and tenants of the building. As part of this effort, Jamestown will continue to manage the retail and food hall.”

Despite community concerns, many locals attest that both Jamestown and Google have been good neighbors, by creating the Hudson Guild Tech Up Lab and coordinating efforts to preserve the Julien Binford mural (“A Memory of 14th Street and Sixth Avenue”) that was removed when the building that housed it was slated for partial demolition.

“This purchase further solidifies our commitment to New York, and we believe the Manhattan Chelsea Market will continue to be a great home for us and a vital part of the neighborhood and community,” Radcliffe said in the statement. “We’re proud to be part of a city that’s a cross section of so many industries and cultures, and as we look ahead to the next 18 years and beyond, we’ll continue to invest in our growth and commitment to the city.”