Manhattan Land Barons Would Make a Big Pile on West Side Yankees

Mayor Rudolph Giuliani and George Steinbrenner aren’t the only powerful New Yorkers who stand to win big if a glittering new Yankee Stadium is built on the West Side of Manhattan. By transferring millions of deep-pocketed sports fans out of New York’s poorest borough (the Bronx) and into the richest (Manhattan), the proposed stadium holds the promise of a big payoff for a small cadre of players well positioned to benefit from a publicly financed sports palace in midtown. Among them: developer Steve Roth, ferry magnate Arthur Imperatore Jr., sports impresario Charles Dolan and perhaps even Fred Wilpon, co-owner of the Mets.

Real estate sources have told The Observer that Mr. Wilpon is considering developing an office tower above the James A. Farley Post Office, the splendid Beaux-Arts structure on Eighth Avenue that will soon house a new Penn Station and that would be a five-minute walk from the proposed ball park. Mr. Wilpon’s Sterling Equities Inc., and Hines Interests, a longtime business partner of Mr. Wilpon’s company, are advising the U.S. Postal Service on the redevelopment of the building. As a result, Mr. Wilpon and company are in a perfect position to influence the sale of potentially valuable air rights above the sprawling new transportation hub–air rights they just might decide to buy themselves.

According to real estate sources, Mr. Wilpon and his partners have been biding their time, uncertain whether the real estate market could support the project. But a new stadium and a new Penn Station would help transform the neighborhood from a collection of parking lots and soot-encrusted garment buildings into a gleaming tourist destination.

More to the point, perhaps, the prospect of renting plush corporate suites with a sweeping view of a new ball park is compelling indeed–even if it is home to a team that has consistently bested Mr. Wilpon’s Mets for the title of New York’s marquee ball club.

Mr. Wilpon dismissed questions about his future plans. “It’s much too premature to know what the Post Office is going to want to do there,” he said.

Nonetheless, Mr. Wilpon and other midtown developers have to be overjoyed by the prospect of a new stadium. It would help create a midtown sports and entertainment mecca to rival Times Square–a sports corridor running from Madison Square Garden to the new stadium on the Hudson River that would attract fans who have been spending money in the bars and shops under the rumbling No. 4 train on River Avenue in the South Bronx. If the new stadium is built, those fans will be set loose on the West Side.

“Moving the stadium would rip a hole in the Bronx,” said Andy Roos, an executive vice president at GVA Williams Worldwide, a major midtown brokerage house. “But it would be great for Manhattan. Land values on the West Side would skyrocket. The volume of people emanating from the [midtown] transportation hub to points west would be enormous.”

So, too, would the volume of people crossing the Hudson River from New Jersey, one of the Yankees’ biggest fan bases. And that’s where Arthur Imperatore Jr. comes in. Mr. Imperatore and his father, Arthur Imperatore Sr., the irascible former trucking magnate, run the NY Waterway company, which ferries 13,000 commuters across the Hudson River each day. They have considered the fleet to be the key to solving traffic nightmares that would almost certainly plague a West Side stadium.

The Imperatores already own six ferry terminals at key points along the New Jersey riverfront and operate one on West 38th Street, near the proposed stadium site. The New Jersey terminals are easily accessible to the Garden State’s highways and its public transportation network. And, as luck would have it, those New Jersey terminals are privately owned and thus unavailable to any competing ferry companies that might want a piece of a new Yankee market–although competition might break out for other markets such as Staten Island or Westchester.

“We control four to five thousand parking spaces on the New Jersey waterfront,” said the junior Mr. Imperatore, who is president of NY Waterway. “You figure a 400-passenger boat, leaving every five minutes, from four different locations. That’s approximately 20,000 people in the hour before a game.”

It’s also several thousand more fans than NY Waterway’s Yankee Clipper ferried to Yankee games during the entire 1997 season.

Mr. Imperatore took care to point out that his company isn’t lobbying for a West Side stadium. But he conceded: “I think we obviously would see a great increase in our ridership, and, yes, it would be in our interest.”

After all, he added, the company would probably charge $3 or $4 each way for ferry rides at game time. NY Waterway would gross $120,000 per game if it ever did ferry 20,000 people at $6 for a round-trip ticket; the Yankees host 81 home games each season.

A Vested Interest

And if some of those fans decided to pay a visit to a suburban-style theme restaurant for an overpriced cheeseburger before returning to the suburbs of New Jersey, Steve Roth would be delighted. As chief executive of Vornado Realty Trust, Mr. Roth reportedly invested $300 million last spring in the neighborhood around Penn Station.

According to researchers at GVA Williams, Mr. Roth is the area’s largest landowner. He counts among his properties several buildings on 34th Street, and two soaring office towers atop and around the Madison Square Garden complex–both picked up in Vornado’s $656 million acquisition of the massive portfolio of developer Bernard Mendik. Vornado also co-owns the Hotel Pennsylvania, on Eighth Avenue between 32nd and 33rd streets.

Convinced that the dowdy Penn Station neighborhood of scalper’s hangouts and fast food joints is the next 57th Street, Mr. Roth floated neon-saturated plans last March for new restaurants, stores and a revamped hotel, all centered around a sports and entertainment theme. Real estate insiders note that Mr. Roth has been decidedly reluctant to talk about his intentions in recent months. But the prospect of the West Side crowded with tourists–not to mention the possibility of thousands of bloated baseball fans wandering the neighborhood looking to spend some cash and crow about their ball field heroes to bored Hooters waitresses–would almost certainly spur Mr. Roth to push forward. (Vornado didn’t return an Observer call.)

“Clearly, Roth would be a major winner with a new stadium,” noted one top midtown broker. “If the city extends west, it will make [Mr. Roth’s] property more central to the business district.”

Finally, there’s Charles Dolan, the chairman of Cablevision Systems Corporation. Mr. Dolan owns Madison Square Garden, the Knicks, the Rangers and the television rights to the Yankees. It’s likely that having a new baseball stadium for a neighbor would help enhance the Garden’s reputation as a sports mecca–and, by extension, Mr. Dolan’s own image as the sultan of New York sports.

But, ironically, a new stadium may not play entirely in Mr. Dolan’s favor. Mr. Dolan is reportedly interested in buying the Yankees. The value of the Yankees, however, would undoubtedly rise with the elevated profile–and increased attendance–that new stadium would bring, raising the price of the team. Moreover, a stadium could represent new competition for the Garden in the chase for rock shows and other high-profile acts.

“I think it certainly enhances the image of the city, and of the whole neighborhood–the fact that within a few city blocks you have three of the greatest franchises in sports,” said Bob Gutkowski, former president of Madison Square Garden and chairman of the Marquee Group, a sports marketing business. “But some acts might prefer to play outdoors. Billy Joel might say, ‘Shit, let’s play outside. I’d love to play at the new Yankee Stadium.'”

That’s assuming, of course, that the new ball park’s architects pay no attention to some proposals calling for, of all things, a domed stadium.

Manhattan Land Barons  Would Make a Big Pile on West Side Yankees