From iconic cookies to gristly murders to hordes of selfie-snapping tourists, the walls of New York’s Chelsea Market have seen it all.
The brick building that currently houses tech tenants and one of New York’s hottest tourist destinations was constructed a century ago as part of the National Biscuit Company Complex in west Chelsea. Some of the site, which covered multiple city blocks, was built on a landfill where excavators uncovered the timbers, chains and anchor of a two-masted schooner, according to the New York Times. To facilitate easy shipping, architect Louis Wirsching Jr. designed a building with an elevated freight railroad viaduct for trains to drop off flour and other goods for Oreos, Mallomars and other treats.
The company, later known as Nabisco, moved out of the city in 1959 and kept the property, at 75 Ninth Avenue, as a warehouse. Irwin Cohen, a developer now in his 80s, teamed up with “a few Russian guys in the aluminum business” to buy the foreclosed mortgage to the building in 1993, he told the New York Post. At that point, the building had a few manufacturing tenants in largely empty space. Outside, the neighborhood was dominated by the business of the Meatpacking District a block south, with butcheries then active where high-end restaurants now sit.
“There were gangland murders in the basement,” Cohen said. “Three people were shot in their knees with their hands tied behind them.” Keen to move considerations of the space from these daunting legends, he envisioned a food market that would make the building more attractive for office tenants. He first convinced a local wholesaler fruit company to set up shop and worked with an architect to install a novelty: a water-spewing ceiling pipe in the middle of the floor that is still a tourist photo attraction today.
As the food market developed and the neighborhood became less centered on manufacturing, Cohen inked media tenants looking for cheap office and studio space, including the Food Network, a local television station and Major League Baseball.
Ultimately, the burgeoning hot spot drew Atlanta, Georgia-based Jamestown Properties’ attention, and in September 2003, the firm bought a 75 percent stake in Chelsea Market in a deal valuing the property at $278 million, according to data provider Real Capital Analytics. A joint venture comprising New York-based investment manager Angelo Gordon; New York-based private investment firm Belvedere Capital; and San Francisco-based operator ATC Partners held the minority stake.
Jamestown expanded the popular food hall to first-floor retail and saw a huge jump in foot traffic from the connected High Line park, an elevated greenway built in 2009. In 2016, nearly 8 million visitors walked the High Line, while about Chelsea Market attracted about 6 million people.
In June 2011, Jamestown bought out its partners’ minority stake in a deal valuing Chelsea Market at $793.5 million. Capital for Jamestown’s stakes came from its open-ended core fund, Jamestown Premier Property Fund. The office-focused vehicle, valued at $19.6 billion as of the second quarter, had returned 11.1 percent net as of Q2, according to the Sacramento County Employees’ Retirement System, one of its investors.
Now, the building is under new ownership with a huge gain for Jamestown. The property company sold Chelsea Market to Alphabet, Google’s parent company, for $2.4 billion in a deal that closed Tuesday. A spokesman for Jamestown declined to comment, and Google could not be reached.
Google has cornered the neighborhood, helping change its character and enrich Jamestown over the years. The tech giant leased part of 111 Eighth Avenue, establishing its local headquarters, then bought the building from Jamestown and partners in 2010 for $1.9 billion. It leased 300,000 square feet at Chelsea Market and 360,000 square feet at 85 Tenth Avenue, which could be next on Google’s shopping list.
Google has, as with most of its deals, kept quiet about its plans for Chelsea Market. In a statement announcing the deal close, Jamestown said it will continue to operate the food and retail parts of the 1.2 million square foot building.
As part of the deal, the property company keeps the branding rights to Chelsea Market, with an eye toward exporting the concept outside Manhattan. Jamestown is reportedly looking at emerging neighborhoods in both Europe and the US, capitalizing on the name-brand success for future walls that might tell a much more boring story than those of the original Chelsea Market.