Gagosian Pays $5.75 Million for Largest Gallery in Chelsea

When Larry Gagosian first came to New York from Los Angeles in 1986, he opened a small gallery on West

When Larry Gagosian first came to New York from Los Angeles in 1986, he opened a small gallery on West 23rd Street between 10th and 11th avenues. The silver-haired gallerist was probably the only dealer in Chelsea at the time. In 1989, enriched by sales to S.I. Newhouse Jr., Leonard Lauder and other big collectors, he moved his business to 980 Madison Avenue, near 76th Street, and later opened a second branch on Wooster Street in SoHo. Now Mr. Gagosian is returning to Chelsea.

On July 22, he closed a deal to pay $5.75 million for a 21,000-square-foot, one-story building on the corner of 24th Street and 11th Avenue owned by Tom Gambino Jr., the son of deceased Mafia boss Carlo Gambino.

“I have felt in the last couple of years that the shift to retail has been so pronounced [in SoHo] that I don’t feel as comfortable having a gallery there as I did at one time. When you feel that way, it is always a good idea to try to adjust,” Mr. Gagosian told The Observer .

A low-slung, midcentury industrial structure, across the street from a post office parking garage, Mr. Gagosian’s new building, 202 11th Avenue, is a cement-floored, undifferentiated space with a 23-foot-high ceiling and three large loading docks on the north and south sides. When it opens next spring, it will be by far the largest gallery space in Chelsea.

“It is our intent to create a series of different-sized exhibition spaces,” said Richard Gluckman, the architect who has designed all of Mr. Gagosian’s galleries. One of the spaces will duplicate the SoHo gallery, a 2,400-square-foot, column-free room that has drawn many young artists to Gagosian Gallery.

Mr. Gagosian’s investment in Chelsea marks a sea change in the way the neighborhood has evolved from a desolate, truck-filled outpost of lower Manhattan into the epicenter of the contemporary art market. “I like the neighborhood,” Mr. Gagosian added. “People are walking around looking at art and, well, it is a whole different scene than SoHo.” According to the Gallery Guide , there are now 124 galleries in Chelsea, and art dealers are battling over locations.

Susan B. Anthony, a SoHo-based realtor who represented Mr. Gagosian in his purchase of the Chelsea building, said she has approached almost every building owner on behalf of clients. She contacted Mr. Gambino, thinking that she could put together a group of dealers who would want to share such a large space.

She said Mr. Gambino initially preferred to rent the space and “only wanted one tenant, so I showed it to a couple of dealers who could afford it alone.” The annual rent was $399,000 and the raw space needed renovating. In March, however, Mr. Gambino decided he wanted to sell the property, and Ms. Anthony approached Mr. Gagosian, who had been trying to find a space in Chelsea for three years.

Gallery owners have traditionally avoided buying their spaces, preferring to sink their capital into art acquisitions, but that has not always been the case in Chelsea. “Most of the people I have talked to down there–they all own,” Mr. Gagosian said. “I think that because the dealers are owners, it is less likely that there is going to be a turnover to retail. They are not going to be bumped out by rents.… That was impossible in SoHo, because the prices were just prohibitive.”

In SoHo, rents for upper-floor gallery space now range from $25 to $30 per square foot and ground-floor space goes for about $200 per square foot. In Chelsea, rents range from $17 to $23 per square foot on upper floors to around $40 on the ground floor. The gallery owners who have purchased space in Chelsea include Barbara Gladstone, who paid $1.995 million for her gallery at 515 West 24th Street in 1996, and Paula Cooper, who purchased her gallery at 534 West 21st Street for $512,000 in 1995.

Mr. Gagosian said he is also looking for gallery space in London, which would make him a major presence in three cities, including Los Angeles. Gagosian Gallery is a private business and does not release financial figures, but sources said it has been inching forward in its head-to-head competition with Pace-Wildenstein gallery, its main rival in the contemporary field, which represents the estates of Donald Judd, Mark Rothko and Alexander Calder. The Gagosian Gallery, which is heavily invested in the resale market, has been particularly well placed to reap the benefits of the recent interest in Warhol, whose prices have gone through the roof in recent years, through a special arrangement with the artist’s estate to purchase paintings at a discount. Mr. Gagosian’s Los Angeles gallery, the setting of fabled openings, is also said to be doing very well. Meanwhile, earlier this year Pace-Wildenstein stopped holding regular exhibitions at its Los Angeles gallery.

It seems appropriate that Mr. Gagosian, who next year will edge out Matthew Marks, who has dominated the Chelsea art community lately with two 5,000-square-foot galleries, is buying the former headquarters of T. Gambino Dynamic Express, a company owned by Mr. Gambino. In 1991, the Manhattan District Attorney’s office accused the company of putting a stranglehold on the garment industry, whose goods the company traffics with a fleet of 1,000 vehicles.

The Year of the Urinal

In1917,theFrenchartistMarcelDuchamp submitted an upside-down urinal for an exhibition being organized by New York’s Society of Independent Artists. He had taken the urinal–which bore the signature “L. Mott,” the name of the manufacturer–turned it upside down and put the signature “R. Mutt 1917” on the bottom. The R. stands for Richard, French slang for moneybags, and Mutt referred to the short, hairy, rotund man in the popular comic strip Mutt and Jeff . The original was destroyed. But the artist made eight signed replicas in 1964, primarily to supply museums with examples of the artwork, for which collectors have been paying top dollar. One of those replicas will go on the block at Sotheby’s in November.

Sotheby’s would not release a presale estimate for its fountain, but earlier this year the San Francisco Museum of Modern Art paid $1 million for one of the 1964 editions.

Also this fall, Christie’s reportedly plans to auction off 26 of Duchamp’s works for a Japanese bank and Harry N. Abrams will publish Marcel Duchamp: The Art of Making Art in the Age of Mechanical Reproduction by Francis Naumann. Mr. Naumann, who along with Arturo Schwarz is one of the two leading Duchamp experts in the world, is also curating two Duchamp exhibition: one of Duchamp multiples at Achim Moeller Fine Art Limited, 167 East 73rd Street, and a larger show of artworks by followers of Duchamp at Curt Marcus Gallery Inc., 578 Broadway.

Because his art is basically nonsensical, the possibilities for Duchamp’s followers are limitless: The Duchamp school’s artists included in the show will be Richard Pettibone, Elaine Sturtevant, Sherrie Levin and Mike Bidlo, who wallpapered a bathroom at P.S. 1 with an image of Duchamp’s urinal in 1997. That work of art is still on view.

Gagosian Pays $5.75 Million for Largest Gallery in Chelsea