Indeed, no meaningful addition to the city’s roughly 400 million square feet of commercial space has been added to the skyline in two decades, raising questions as to whether it could face a shortage in the coming years, a situation that has pressured rental spikes in the past. For now, however, amid what appears to be at least a hiccup in leasing during the last quarter of 2011 and the opening quarter of this year—not to mention lingering concerns about the health of the economy—only the most intrepid developers have gone into the ground with projects.

51 Astor Place.

Uncertain demand and other hurdles that developers must negotiate to build, including securing a site in a city where prime development parcels are both difficult and expensive to acquire, only partly explain the dearth of construction.

In the wake of tightened lending standards, construction financing remains hard to secure, and for developers who are able to source loans, the terms have shifted in a way that places far more of a project’s risk on their shoulders.

“We’re finding that for the right projects and sponsorship, there are lenders in the market who are willing to provide financing,” said Charles Bendit, a principal at Taconic Investment Partners LLC, a real estate investment and development firm that has built a number of buildings despite the challenging lending conditions in recent years, including the boutique office building at 15 Little West 12th Street. Mr. Bendit and Paul Pariser, another principal at Taconic, are in the process of starting 837 Washington Street, a roughly 55,000-square-foot office and retail property that, like 15 Little West 12th, is located in the trendy meatpacking district and will be built on speculation.

But Mr. Bendit pointed out that even developers like himself and Mr. Pariser, who have an impressive track record, have to front as much as 45 percent of the cost of a new building to secure financing, a far higher equity requirement than in the years before the recession hit.
“It used to be that you could get construction financing for 75 percent of a project’s cost,” Mr. Bendit said.

Developers must also submit to various loan covenants, terms they might have laughed at during the boom years, when money came with few stipulations.

“You’ll always have certain guarantees such as completion guarantees that you’ll finish the building,” Mr. Bendit said. “But now the lenders want more. There are guarantees that if you run out of interest reserves, you’ll pay the interest out of your own pocket. There are guarantees that if there’s a default and the lender has to take, say, a $50 million project and sell it for $47 million, you’re on the hook for the $3 million difference. These terms are all new.”

The tougher lending environment has forced developers to pour more of their financial resources into construction deals and also to bear more exposure to the consequences of how the investment performs.

John Lam, a prolific developer of hotels in the city, told The Commercial Observer that he may pony up as much as $200 million of the estimated $350 million cost of a large new hotel and retail complex he is planning to erect on 30th Street and Broadway.
“Financing is still very tough and most of it is relationship driven right now,” Mr. Lam said.

Mr. Lam said he is pulling money out of his large portfolio of Manhattan hotels by refinancing the properties in order to write the huge equity check for what will be his signature Manhattan development. Before the downturn, he would have likely been able to finance the project without having to involve his other assets. Although he is leveraging his holdings to do the deal, Mr. Lam also looks at the massive cash infusion as a way to gird himself against risk by lessening the debt payments he’ll have to make while he gets the 30th Street project up and running in the coming years.

“I don’t like to have a lot of leverage against a property when it’s not income producing,” Mr. Lam said, noting that his portfolio currently has low leverage and strong cash flow and that the planned refinancing won’t burden his hotels with undue amounts of debt.

Like Mr. Lam, other developers have plowed substantial funds of their own to get buildings started. In late 2010, Monday Properties, a real estate company with holdings in Washington, D.C., and Manhattan, began construction on a nearly 600,000-square-foot office tower at 1812 North Moore Street in the D.C. submarket of Rosslyn, Va. Unable to get a construction loan at the groundbreaking, Monday Properties financed the project with its own funds while searching for a loan. Over a year later, the company continues to pay for the planned $350 million construction out of pocket and said it will continue to do so if necessary through the project’s scheduled completion in late 2013.

“We’ll build it all equity,” said Anthony Westreich, the chief executive of Monday Properties. “We believe in the market and the site. We know that tenants will come.”

Mr. Westreich said that the North Moore Street tower he is building would be one of the best quality office properties in the entire D.C. region, a market that rivals Manhattan for its high office rents and occupancy levels and enjoys strong demand from government tenants. Still, the company’s commitment appears incredible compared to past years.

Behind the willingness of developers to persevere in spite of the trying lending market is a core belief that timing is on their side. Recent developments like 510 Madison Avenue and 11 Times Square were easily financed during boom years, but fell on hard times because construction started too late in the cycle and completed only after the market turned. By beginning now, just as the market appears to be heading back up, many developers feel assured that their projects will come online just in time to capitalize on strong conditions.

“My feeling is, if you show people pictures of what you’re building, they don’t believe you,” said Edward Minskoff, a developer who’s currently building one of the city’s largest and most anticipated spec office buildings, 51 Astor Place. “If they go down to my site, they’ll see 30 or 40 guys on the job, like little beavers working away. My eye doctor called me the other day and said, ‘I can’t believe you demoed those buildings and are starting.’ When you’re actually building, people know the difference, the project becomes real.”

Mr. Minskoff recently secured a $160 million construction loan for the 400,000-plus-square-foot office building, which he said will be finished next year. Mr. Minksoff told The Commercial Observer that the loan would cover between 60 and 70 percent of the project’s estimated cost, but declined to discuss specifics.

“The credit markets have changed significantly,” Mr. Minskoff said. “I remember in the early 1980s, I would have been able to get something like this 100 percent financed in a few hours by making a few calls. But in this case, we feel our timing is good.”

dgeiger@observer.com

Would that change if rent-stabilization rules change in Albany?
Mr. Bendit: I don’t think that rent-stabilization laws will affect some of the outer-borough locations as much as they would affect parts of Manhattan.

Just because the rents are too low there?
Mr. Bendit: The rents are too low. You’re not looking at families that are going to be decontrolled. The decontrol limit is too high—we’re not even close to that with our properties there.

The big problem in the industry has been that people have loans that come due but they can’t refinance, whereas it would have been easy a couple years ago. How are you on the debt side of things?
Mr. Pariser: We term out most of our projects into four to six years, so we don’t have any near-term rolls.

In general, you seemed to do pretty well at the market’s peak. You sold 450 Park for over $500 million, which was over $300 million more than you bought it for.
Mr. Pariser: It was a price of $1,650 a square foot for an office building, which turned out to be a near-term peak.

Do you wish you’d sold more back then?
Mr. Pariser: We did sell a bunch and refinanced a bunch. … We wound up selling 450 Park. It turned out to be an even better sale and a perfect decision—it wasn’t exactly foresight. We didn’t think it was going to stop and drop; we just thought it was at a point that we can take advantage of it.

Do you think the people who bought it are regretting it at this point?
Mr. Pariser: They’ll wind up having a longer holding period than they probably would have thought. But, ultimately, it’s a very fine building and a superb location.

Do you think you overpaid for anything at the time?
Mr. Pariser: We’re value buyers, so we like to buy well; so I think we certainly look back at the things we acquired and made very good rational sense. We bought a building on Pearl Street, a 1 million–square–foot building from Verizon two years ago, and our rationale for the deal was that we were going to be one of the few potential sites to put a 1 million–foot tenant, by cleaning up the building, re-skinning it. … That was the right, sound thinking, we didn’t expect the market to slide off. But we still bought it well and it will probably just now be a longer hold.

Is that building just going to sit empty, not making any money for you, until you find someone to fill it?
Mr. Pariser: It’s a big building, but we can afford to hold it, and still produce a product four years from now, five years—whenever we do find that tenant—to produce a product that’s a significant pricing advantage.

At Coney Island, you bought 8 acres out there that you want to turn into luxury housing. When did you first get interested in property out there?
Mr. Bendit: It was 2004. … We had a series of acquisitions, to the point where we control four blocks, more or less, that are either on the north side of Surf Avenue, across from Keyspan Park, or to the west.

Why Coney Island?
Mr. Bendit: What attracted us to Coney Island was the fact that it’s vacant land—we didn’t have to dispossess anybody, relocate anybody. And it’s the beachfront. How much beachfront land is there in New York City? Not only that, but beachfront land that’s accessible to the subway. So, if you think about it, how many young people, or anybody, for that matter, would like to commute into New York or Brooklyn, and go home at night and live on the beach?

Is that to say you see it emerging as a Brighton Beach, or is it more high end than that?
Mr. Bendit: Who knows what it will end up looking like? We just thought it was an opportunity to create a neighborhood. Just the properties we own, we could build 2,500 apartments, at varying price points, from high end, meaning maybe $800 or $900 a square foot if we get lucky, to $300 or $400 a square foot.

But it’s far away.
Mr. Bendit: If there’s an express train, the F express train, which they’re planning on, it’s 30 minutes from midtown Manhattan.

Right to the east, the city wants to create a vibrant, new, year-round amusement district. Does the success of your land depend on that?
Mr. Bendit: I don’t know that people are going to move there because of being adjacent to the amusement district. I think people will want to move there because of the lifestyle. … Having the amusements there, that whole amusement district there being developed only makes it better. … But I don’t know that you need to build the amusement in order for people to live there.

Your land sits around the parking lot for the minor league baseball stadium. The local Councilman, Domenic Recchia, wants that to stay a parking lot, whereas the city wants it to be housing. How does that affect your plans? Can you still develop if that’s a parking lot?
Mr. Bendit: [The lot is] mapped as parkland; and as city parkland, you have certain zoning restrictions that require setbacks or require that you don’t have windows facing it … so when you have a huge development with no windows on one side, it makes it very problematic for it to be a successful development. So if the city is not able to alienate that parkland or move that parkland elsewhere, it has a dramatic impact on the feasibility of our own project.

What’s talking to Domenic like? He seems pretty dead-set on this.
Mr. Bendit: I think Domenic is caught in the middle, because he wants to do what ultimately will be best for the community but he’s dealing with the people who live in the community today, who are a little nervous about what the new development will bring in the way of change.

You’re in talks with the city to bring Ringling Bros. to the city this summer?
Mr. Bendit: They’ve asked us whether we could accommodate them. It’s not really our negotiation; it’s the city’s negotiation. We said that we would work with them in making a place available for the circus to locate during the summer.

ebrown@observer.com

But just beyond its limits—which stretch only as wide as the skinny platform, at 30 to 60 feet—there is a frenzied contrast. Up and down the High Line’s mile-and-a-half stretch, dozens of sites are readying for construction.

At least 27 projects—mostly luxury condos and hotels—are in various stages of development: Some are being constructed, others have just broken ground, and a few are in the design stages. And many more are expected.

All of the projects will have an intimate relationship with the park: Some buildings will have private access points that lead to walkways into the park; three will actually have the High Line tucked inside the buildings; many will loom over the park, with high-end retailers serving as a backdrop; and all will be capitalizing on a rare chance to develop directly next to—or, in some cases, within—Manhattan’s newest public park.

“I think it’s remarkable,” said Andre Balazs, whose two developments both have the High Line running through them. “It’s like having a building in Central Park.”

Many of the planned buildings include a ridiculously well-muscled list of architects: Frank Gehry, Jean Nouvel, Renzo Piano and Annabelle Selldorf, just to name a few. The formerly hardscrabble part of West Chelsea, already on its way out, will soon be no more.

“Every parking lot and every derelict building in that neighborhood will be redeveloped,” said Ron Solarz, a broker at Eastern Consolidated, which is representing at least three sites in the area. “It will be all hotels, condos, rentals and restaurants with super-high-level users.”

But what will it mean when it’s all added up? The architects, the developers and, ultimately, the new dwellers have the chance to influence something so routine, yet so hard to achieve in New York: reorienting the identity of a neighborhood.

And who exactly are these people clamoring to move into the new West Chelsea?

ON MARCH 22, A NEW LUXURY CONDO named the Chelsea Modern, located on 18th Street off 10th Avenue, held a launch party. Prices for each of the 47 condos starts at $1 million. The party’s high-wattage attendees included Ivanka Trump, Spanish supermodel Eugenia Silva, and socialites Emma Snowdon Jones and Tracy Stern.

Matthew Betmaleck, a 39-year-old who owns his own fashion-photography company, spent $1.25 million on his unit in the building. He said the building’s proximity to the High Line is why he bought in.

“It’s Manhattan, so outdoor space is at a prime,” he said, wearing glasses with a Club Monaco scarf wrapped around his blazer. “If you live on the Upper East Side or the Upper West Side, Central Park is at your front door. Right now, I live on Bank and Washington, so I go to the West Side Highway all the time for rides or to walk my dog, and I think it’ll be the same thing at the High Line. It’ll be a destination, and people will come and check it out and say, ‘Wow! What’s that? I wanna see it.’ But I think ultimately the people who live here will be the people who use it.”

Greg Casto, a 26-year-old working in public relations, hopes to move into one of these shiny new condos when he can afford it. That’s because West Chelsea defines what Chelsea means to him already.

“Chelsea is becoming a very focused, very smart community,” he said. “That’s what you’re seeing here—not only in living arrangements, but in shops and restaurants, too. Everything that is around Chelsea is becoming very sexy and very sophisticated. And that’s the key message everyone is bringing to Chelsea: smart and sexy.”

He said he’s lived in New York for nine months.

The High Line streaks from Gansevoort Street in the meatpacking district to 34th Street. The entire train platform, which is made out of a very 1930’s combo of steel and reinforced concrete, will become a park, except for the portion between 30th and 34th streets that’s shaped like a sideways J—the city is still figuring out what to do with that section.

The park is scheduled to open in the summer of 2008, with a projected cost of $165 million. The city has raised $85 million, the federal government has given $22 million, and private funding has raised more than $17 million. The Friends of the High Line, the nonprofit arm that has pushed this project forward, has launched a campaign to raise an additional $40 million.

“I’m very excited about the project,” Congressman Jerry Nadler told The Observer. He took a tour of the High Line in 2005 with Senator Hillary Clinton and City Councilwoman (now Speaker) Christine Quinn to boost support for its redesign. “It certainly says something about the power of the West Side.”

The park, designed by Field Operations and Diller, Scofidio & Renfro, is unique in that it will be open around the same time as the dozens of luxury developments skirting it.

IT'S THIS LUXURY, WHICH LITERALLY OVERSHADOWS a park birthed through hefty public support, that raises the question: Will the High Line become a stylized playground for the rich only?

The Friends of the High Line loudly say no.

“We care passionately about this being a place for all people in the neighborhood and all New Yorkers,” said Joshua David, who co-founded Friends of the High Line in 1999. “And if there are some expensive buildings in the High Line neighborhood, then that’s true of neighborhoods throughout Manhattan. But this remains an incredibly diverse neighborhood, and we’re committed to its diversity.”

At the least, the people who move into these condos will have a comfy lifestyle. Mr. Balazs’ 14th Street High Line Building, for instance, will actually include the High Line, even though the Parks Department will still manage the part that’s inside. Mr. Balazs described the 15-story property as a “private club” that will be for “members only,” who will buy into the building and rent out rooms as a hotel.

According to one source, the High Line Building may also ask the city for a private entrance from the building that leads to a passage to the park—in essence, a direct passage from the building to the park itself. Connection to the park, said developer Charles Bendit, will be a main selling point for all landlords who can get access to it.

“It’s like living two houses off Central Park, and you have access to the park right around the corner,” he said. “You will have the same benefit here.”

Several more developers are expected to make a request for this sort of private entrance once their buildings come closer to completion, the source said.

The one building that has made the request is the Caledonia, which is owned by Mr. Bendit’s Taconic Investment Partners and mega-developer the Related Companies. The tower’s approximately 185 luxury condos are sold out, Mr. Bendit said. The building has already signed Equinox, which will have a second-floor view that will overlook the High Line.

Mr. Bendit said he expects other developers to follow suit—to bring in high-end retailers to overlook the High Line from their second- or third-story windows. Even if there aren’t direct connections to the stores themselves, if a person strolling in the park has a wandering eye for the Bed Bath & Beyond right next-door, then he can shuffle down the High Line’s stairs and buy that shower curtain he always wanted at a moment’s notice.

Naturally, the marketing machines are already moving with a swift pace. High Line 519, a condo being constructed on 23rd Street, markets its units as a “fusion of contemporary architecture, European opulence and raw Chelsea charm.”

But what exactly is “raw Chelsea charm”? Does it recall the authenticity of Chelsea and the meatpacking district in the 1970’s and 1980’s, when S&M and gay leather bars like the Eagle, the Mineshaft and the Lure pervaded the area? Or is it the gritty urban setting that’s currently in its last throes?

Whatever the appeal, it’s now being smoothed over with that burnished architecture. The New York Times architecture critic Nicolai Ouroussoff recently called Mr. Gehry’s development, between 18th and 19th streets near the High Line, a strong—if safe—project and lavishly praised a stairwell in the building, saying it might be the city’s best.

Indeed, it’s projects like Mr. Gehry’s that make for few, if any, detractors of the re-imagined West Chelsea. Even classic naysayers for most projects, like Florent Morellet, the owner of the meatpacking mainstay diner Florent, approve of it.

“I believe the change is positive,” he said. “You have to live with change. When I took over the restaurant, there were people who moved in the neighborhood in the 1970’s, and people said, ‘That’s it. It’s gentrification; it’s over.’ Then more moved in during the 80’s, and they thought it was the end, and the same in the 90’s. Every month, someone says to me the neighborhood is finished.”

So with a new element about to wind its way through the area, there’s naturally one thing to do: plan a big party. Even though the High Line is more than a year away from opening, tickets are on sale on March 30 for the official H&M-sponsored High Line Festival to help raise additional funds for Friends of the High Line. The party will be in May, though it won’t take place on the High Line, since it’s still illegal to enter it. But that’s beside the point.

For a project and an area that places such a premium on famous luminaries like Mr. Gehry and Mr. Nouvel, this event fits the bill. The famous gay party planner, Josh Wood, and Broadway producer David Binder are organizing it. David Bowie will curate the festival. High-profile artists like Laurie Anderson and Arcade Fire are among those that will perform.

Of course, the H&M-sponsored event, which will also get some sponsorship help from Garnier, Jet Blue and Grolsch, looks a lot like the High Line and all the developments around it—a little edgy, but something that is definitely established.

Mark Wellborn contributed reporting to this story.