Weekend FT: The allure of the authentic
Published: March 15 2008 00:43
Chinatown in New York is one of the last few authentic neighbourhoods in a city that is always searching for the next “it” place to live. Its core population is about 80,000, of which 55,000 are of Asian lineage. But residential developments and at least one five-star hotel are transforming an area that was first carved out by Chinese immigrants in the mid-18th century.
“The change is daily. It is obvious. It is irreversible,” said Stefan Gerard, who lives in a former factory on the eastern edge of Chinatown. Gerard, co-founder of Gen Art, a not-for-profit arts organisation, says: “There are no loft conversions on our street – yet. It is all still Chinese businesses but one block from us there is a new fashion boutique, Project No 8 (stocking international and local designers), a new restaurant, Bacaro, and the Swedish bar Good World. We all see the writing on the wall.”
Chinatown’s allure has been alive and well for decades, long before the gentrification of bordering SoHo, Nolita, the East Village, Tribeca and Wall Street. Its alleys are meant to be explored on foot. Its stores, selling everything from live crabs, to silk pyjamas, lampshades and rare teas, offer a different kind of shoppers’ paradise. As well as the many Chinese restaurants, there are street stalls piled high with persimmon fruits, ginger and lychees.
So what exactly is coming to Chinatown? Morgans Hotel Group is building a 270-room Mondrian hotel with a bar and restaurant at 150 Lafayette Street, which it expects to open in the second half of 2009.
W Hotels is reportedly eyeing a bank building for a new hotel. On a smaller scale, the Chinatown Holiday Inn at 138 Lafayette is being converted into a boutique hotel.
On the residential front, a one-bedroom apartment in a new construction or recently opened building costs $1,150-$1,350 a sq ft, so a decent one-bedroom at 600 to 700 sq ft costs less than $1m. A two-bedroom flat can be bought for just under $1.2m. Ten years ago there were few apartments available to buy because there were not as many conversions or new apartments, only a handful of condominiums, according to Glenn E. Schiller, of the SoHo office of the Corcoran group. Schiller, who has been selling property on the edge of Chinatown for 18 years, said: “As early as three years ago, Chinatown would have been $800 to $900 a sq ft but there has been an appreciation across all of downtown.” In spite of the rapid rise in prices, Chinatown remains extremely good value, he says, and is continuing to develop.
A 30,000 sq ft building, a block north of Canal Street, Chinatown’s main artery, will soon be converted into 14 luxury lofts. The developer is gallerist Max Protetch, whose gallery is known for exhibiting architectural renderings and happens to be one of the first to show Chinese artists. He is betting on Chinatown being the next hip area.
Apartments in his development, which involves converting the old Machinery Exchange built in 1915, will cost from $1.6m for a one-bedroom to nearly $4.5m for a two-bedroom duplex penthouse. Protetch said he looked to Chinatown because he found nothing he liked elsewhere. He fell in love with the building’s arched windows and history. The buyers to date are rich Upper East Siders and foreigners, he says.
Directly opposite Protetch’s building is 123 Baxter, a fullservice, 23-unit condominium that shot up three years ago and attracted attention for its “zen spa bathrooms with rainforest showers” and Brazilian cherry floors. A large one-bedroom has been listed for $1.2m.
The big question is whether Chinatown – which started on Mott Street, Park, Pell and Doyers streets, east of the Five Points District, a formerly dangerous slum area depicted in Martin Scorsese’s Gangs of New York – will be able to retain its authenticity.
The conversions have really only been going on in the past two years. The pace of change is conditioned by the fact that many buildings are occupied by rent stabilised and rent controlled tenants who would all need to be moved out in order for them to be converted.
Gershon Adjaye, a broker and property investment adviser with the Gersh Group, doesn’t believe the area will become overrun with condos, as SoHo has. The core has zoning restrictions that prohibit high-rise buildings and he says his Chinese clients own in New York, New Jersey and offshore but never sell their Chinatown properties. “They prefer to keep it in the family. It is not even a case of money.”
He believes the far east end of Chinatown is not an area that developers would go to. “At that point you are so far east and south that you are too far from any major neighbourhood.” But he said if you go north, Chinatown is very attractive.
He predicts there will be more small developments. “Nothing huge scale because even if you get one guy, or one family to sell a building, you need a much bigger footprint, perhaps a whole block to do a very large development.”
Wellington Chen, executive director of Chinatown Partnership, a group that was formed after September 11 to rebuild Chinatown, also questions whether the area, which has been hit hard by fewer tourists and the demise of its garment industry, will become gentrified.
“Most of Chinatown is rent controlled, five-storey walk-ups owned by Chinese or Jewish landlords.” He said these tenement buildings were mostly more than 100 years old and often in poor condition, with bathrooms in the hallways. There is no doorman or parking and only rarely is there a laundry in the building. The buildings are financially supported by ground-floor retail and restaurants that are suffering because fewer tourists are visiting the area, preferring Little Italy or SoHo. “Development is not happening in the core of Chinatown. Speculators have been circling here for years and if there was a soft spot they would have had it by now”.
He predicts that Chinatown will “age out” over time, meaning that older Chinese residents in rent-controlled buildings are dying. Some are moving to more affordable satellite Chinatowns in Queens. The area does not cater for non-Asians, he says. “Try to get a town car to pick you up. Where can you buy organic food? You can’t.”
But Gerard has no plans to move any time soon. “So you can’t buy milk or butter very easily. But you can get 16 different kinds of shrimp paste. We like that.”