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Tuesday, March 04, 2008

Holdout and Holdup

The story of the notch in Macy's has been told before, but to find it you need to know that there is a story to be told. Most past by this intersection at Herald Square, one of the busiest in the city, never suspecting that the enormous sign proclaiming Macy's to be the World's Largest Store is the subject of a small drama. See a photo of the entire block here.
The strange tale is about the quintessential Holdout - in real estate parlance, someone unwilling to sell a key property standing in the way of development. 'Tis the dream of many that through pure happenstance and good fortune, one has an apartment or property which is crucial to a large project and holds out for an enormous sum of money, securing one's financial status ever after.
In the late 1890s, Macy's decided to expand from its 14th location to 34th Street. It secretly began buying property there, but word leaked out. Robert Smith snatched the property for $375,000. Escalating from holdout to holdup, the hope was to use this property to negotiate with Macy's and get occupancy of their 14th Street location (and some of the Macy's original customers).
However, Macy's did not take the bait. It built around the building, and continued to hold the 14th Street property vacant until the end of the lease.
They opened at Herald Square in 1902. The following year, the corner building was torn down and replaced with a new 5 story structure - the one you see here today (it was first leased to the United Cigar Store Company for $40,000 a year.)
Much later, after 1945, Macy's started to rent advertising space, covering the entire building. Although there have been opportunities to buy the property, to this date Macy's has not. They continue to rent advertising space for the 70 foot sign. Sadly, many of the retailers at this corner building have been tacky, unattractive establishments. Currently there is a Sunglass Hut - a step up in appearance.
So if you dream of holdouts and holdups, keep in mind, they may only be pipe dreams ...


lynn said...

I'd like to go there one day.

crazyforcinema said...

Brian, great story. I like to collect littld NYC tidbits like this.

Beth in NYC

Oliver Chesler said...

Very interesting! When you see the photo the small store stands out but over the 10 years I lived nearby I never noticed it or gave it a thought.

Joe Mama said...

Great story and photos. Thank you. I worked at Macy's when I was 17. There was a Nedicks at the corner location at the time. The funny thing, I always did wonder why Macy's built around the corner store. I'm wondering how Macy's could lease a sign that covers a building that they never owned?

Brian said...

Joe - Perhaps my article wasn't clear enough - they lease the wall space from the owners of the building.

Joe Mama said...

Brian: Understood. I always thought that building stood out like a sore thumb and wondered why Macy's built around it. I also never knew that it was a 5 story building. I just assumed the Macy's sign was built on top of what I thought then was a 1 story restaurant.