Smoking may now be banned in bars, restaurants and public places in New York but cigarettes have played an integral part of the history of 521 and 541 West 25th Street.
Part of the Reynolds Metals Company, the two buildings in the heart of Manhattan's Chelsea area, were once smelting pots for the production of foil liners in cigarette packets. Built before the Second World War, 521-539 West 25th Street and its neighbor 541-543, were once the factories feeding Richard Reynolds growing empire.
As a nephew of US tobacco king, R J Reynolds, Richard Reynolds knew cigarettes were missing a vital component in the 1910s. So borrowing $100,000 from his uncle in 1919, Reynolds set about improving their packaging. He soon realized rolled aluminum foil was key to his future success and by the 1940s, had established operations in various parts of the US, including at West 25th Street. His creativeness even saw Reynolds become king of the kitchen, with the production of US's favorite tin foil brand, Reynolds Wrap.
However as New York City grew, the make-up of businesses in Manhattan changed, with West 25th Street no longer the ideal place for smoke stacks, smelting pots and heavy industry. By the 1970s, the buildings – together with 511 West 25th street next door – had changed hands (and occupations) becoming home to the archiving of business records.
Purchased by Whitehall Business Archives, the three buildings were an early-day computer server, as it were, housing millions of corporate records for business across New York City. But as rents rose, and the cheaper storage alternatives emerged across Hudson River, in New Jersey, Whitehall president, Jack Fuchs, recognized that, once again, a change was needed. No longer would corporations pay a premium to house their documents on the same island as their headquarters, and so by the late 1990s, Fuchs and his brother, Aaron were renting warehouse space to an altogether different clientele: Artists.
By 2001, when the pair were left with vacant space owing to a failed deal with a telecom company, Fuchs was convinced that storage was no longer a viable livelihood and that he could make just as good a living renting to artists. Indeed by 2006 Fuchs – who has since become known as the “Don” of the art gallery district – had seen rents more than double from just five years previously. By 2001, when the pair were left with vacant space owing to a failed deal with a telecom company, Fuchs was convinced that storage was no longer a viable livelihood and that he could make just as good a living renting to artists. Indeed by 2006 Fuchs – who has since become known as the “Don” of the art gallery district – had seen rents more than double from just five years previously.
With retirement in hand though the dour landlord – who once said the last thing on his mind was renting to galleries who were “frankly cheap, difficult and not particularly well financed” – sold the three buildings to a joint venture involving investment firm and developer Cardinal Real Estate Investments and Halcyon Real Estate Investors, the private-equity real estate affiliate of hedge fund manager Halcyon Asset Management. The deal was valued at $97.5 million and comprised the 85,000 square foot, nine-story building at 511-519 West 25th Street and the former home of Reynolds Metals at 521-539 and 541 West 25th Street. The former property is an 80,000-square-foot, four-story building while 541 West 25th Street is an 7,500-square-foot two-story property.
Today, Cardinal New York partner Trevor Stahelski says the two firms want to continue Fuchs' legacy by “carrying the torch” for the artistic community. In the three buildings, 80 percent of the occupiers are galleries, with the remaining 20 percent creative media companies. “We are taking the history of New York and the history of the art community here one step further. We want to carry that torch,” Stahelski tells PERE.
With plans to exit the project within three years, El Segundo, California-based Cardinal is offering leaseholders the opportunity to buy commercial condo interests in the properties, whereby the artists buy their portion of the building outright. There have, of course, been fears from gallery owners the new plans would force them to leave.
However Stahelski rejected the claim, saying: “We are not trying to push out the meek and bring Starbucks in there. We want to keep the Chelsea art gallery district just that, an art district.”