The Other Central Park: Madison Square Park’s Residential Renaissance

Madison Square Park. Leslie Parrott/The New York Observer,

Madison Square Park. Leslie Parrott/The New York Observer,

For years after the crash, One Madison loomed despondently over the square from which it drew its name. Not quite finished and sparsely occupied, it served as a mocking reminder of the city’s many unrealized real estate dreams.

The luxury condo building was to have been a triumph for Ira Shapiro and Marc Jacobs, two developers from Rockland County. They had never built anything in the city before, but in the frenzy of the boom, the partners secured more than $300 million in loans and hired Pritzker-winning architect Rem Koolhaas—a combination of lavishness and inexperience that proved disastrous when the recession hit.

A slew of investor lawsuits stymied the project. Mr. Jacobs alleged that Mr. Shapiro had forged his signature and misused money. The few early buyers were left with no option but to move in and rattle around in the building’s unfinished interiors.

But in February of this year, a very different state of affairs prevailed. Media mogul Rupert Murdoch bought the tower’s triplex penthouse for $43 million and the entire 57th floor for another $14 million, essentially setting the record for most expensive Downtown condo if he combines the units.

Mr. Murdoch’s choice of Madison Square Park represents perhaps the most heavyweight endorsement to date of the neighborhood, which has, in the last few years, become known as a favorite of celebrities.

An interior rendering of 10 Madison Square Park.

An interior rendering of 10 Madison Square Park.

Madison Square Park—the green gem located in the heart of the Flatiron District, known for the triangular landmark just to the south—was named for President James Madison. Over the years, the once-stunning park fell into disrepair along with the neighborhorhood, but a massive renovation in the early 2000s transformed both the park and the streets surrounding it. When the renovation was complete, the park had not only been returned to its former glory, but in many ways surpassed it. Besides maintaining the park, the Madison Square Park Conservancy introduced a number of innovative touchs, like displaying outdoor art sculptures that draw office workers and families alike.

The park has also become a destination for gourmands. Trendy burger joint Shake Shack, which began as a hot dog cart in the park, opened its always-bustling kiosk in 2004. Italian market Eataly, which is invariably mobbed with tourists, opened at 200 Fifth Avenue in 2010. Meanwhile, loftier tastes are satisfied by Eleven Madison Park, which has earned three Michelin stars under the guidance of its James Beard Award-winning chef Daniel Humm.

Nor is the park only concerned with creature comforts: the Museum of Mathematics opened in late 2012, giving the area the kind of cultural clout that is more commonly boasted by bigger parks like Central and Prospect.

“The park is the heart of the district, but there are other assets as well,” said Jennifer Brown, the executive director of the Flatiron/23rd Street Partnership, the local business improvement district. “It has really become a livable community.”

The area surrounding the park has become a hot bed of real estate activity. Leslie Parrott/The New York Observer

The area surrounding the park has become a hot bed of real estate activity. Leslie Parrott/The New York Observer

But while the neighborhood was building cultural cachet, real estate development ran into obstacles, delaying what seemed to be the residential community’s inevitable arrival. There was the turmoil at One Madison, of course. Next door, investment company Africa Israel and fashion label Versace’s plan to transform the former MetLife clock tower, on the southeast corner of the park, into luxury condos also ran into trouble. With the plans stalled, Africa Israel sold the property to Marriott International in 2011.

All those false starts seem to have vanished in the past year, however, as new development gathers momentum. Numerous new residential properties have opened, signaling the next wave of change for the venerable neighborhood.

Developer Mitchell Holdings LLC converted the former headquarters of textile firm Clarence B. Whitman and Sons into a four-unit luxury condo, christening the 1924 neo-Georgian building, at 21 East 26th Street, the Whitman in homage to its former tenant.

“We’re offering 30 feet of frontage to Madison Square Park,” said Dina Lewis, a broker with Douglas Elliman who handles sales at the Whitman with her partner, Melanie Lazenby. “We had these incredible floor plates.”

When the Whitman opened sales last spring, it promptly landed a number of boldface buyers, among them Chelsea Clinton and her husband, Marc Mezvinsky, who bought an apartment for $9.25 million. NASCAR driver Jeff Gordon also bought a $10 million unit, moving from 15 Central Park West, one of the most exclusive buildings in the city. After a hedge fund bigwig snapped up the Whitman’s other floor-through last summer, the 10,000-square-foot penthouse, listed at $25 million is all that remains on the market.

The neighborhood’s central location is a major asset, with subway lines connecting to all parts of Manhattan. Its proximity to Grand Central Terminal and Penn Station is also a boon for commercial tenants. It has all the Downtown cachet of Tribeca, in other words, with none of the inconvenience.

“This is a neighborhood that is right in the center of everything,” said Ms. Lewis.

Another major project on the park is the Witkoff Group’s $300 million renovation of the former International Toy Center. Already 90 percent sold, the project is known as 10 Madison Square Park West and is expected to open in 2015. Developer Savanna bought the property’s 20,676-square-foot retail space for $60 million earlier this year. The former Toy Center is also one of the last parcels useable for residential development, and it’s likely that future projects will lack the park views that buyers crave.

“There’s only a finite number of buildings,” said Scott Alper, a partner at the Witkoff Group. “For the person who wants to live downtown, this is the location.”