Business Boom / Developers - and shoppers - flock to Forest Hills

By Katia Hetter
Staff Writer

New York City Councilwoman Karen Koslowitz couldn't imagine a Disney store opening up across the street from a strip club.

Austin Street is now a shopping mecca packed with Disney, Banana Republic, the Gap and other national chains, plus upscale restaurants, cellular phone stores and exercise clubs, but that was all in jeopardy six years ago when Runway 69 opened on the narrow thoroughfare one block from Queens Boulevard. Worried about the impact on her tightly knit residential and retail community, the councilwoman led a protest of more than 1,000 people down Austin Street against the strip club and kept the pressure on for more than two months. The club agreed to close in April, 1993.

Koslowitz (D-Forest Hills), who along with fellow Councilman Walter McCaffrey (D-Woodside) later helped pass the city's sex club restrictions, points to the shutdown of Runway 69 as the turning point for Forest Hills. Once the club was run out of town, the Queens neighborhood began its redevelopment into "a mini Fifth Avenue," said Roy Chipkin, an associate managing director with Insignia / Edward S. Gordon Co., Inc., leasing agents for the Lefrak Organization's 1 million square feet of office and retail space in Queens.

"You wouldn't see stores coming in like The Children's Place, Nine West, Aerosoles and the wonderful stores that have opened up if this place had deteriorated," Koslowitz said. "People going to Runway 69 would hurt [our efforts] to promote people coming into our community to shop."

A weeknight or weekend stroll down Austin Street or Continental Avenue (also known as 71st Avenue) makes it clear that the neighborhood has become a popular shopping destination for Queens residents and workers. Honking is rampant as cars navigate through the maze of delivery trucks, buses and hundreds of pedestrians crossing narrow streets without regard to traffic lights. If drivers can't find the rarely free one- or two-hour metered parking spaces, a few lots may have a spare space available at $4 to $5 an hour. The subway and Long Island Rail Road also have Forest Hills stops.

But popularity has its costs: Rents are increasing steadily every year, making it harder for independent merchants to stay or locate on Austin Street and nearby. Traffic congestion also is increasing, and some residents are worried about the congestion and trash brought in by the growing number of retailers and restaurants.

Initially developed between 1904 and 1908 by real estate mogul Cord Meyer Jr., Forest Hills was once known for the U.S. Open tennis tournament (now in Flushing). But to Koslowitz, it's also a neighborhood of elegant family homes and quaint mom-and-pop shops dotting Austin Street. Over the years, many famous politicians and entertainers have called Forest Hills home, including former U.S. Sen. Geraldine Ferraro, actor Carroll O'Connor and singer Carol Channing.

The nearby community of Forest Hills Gardens Corp., which restricts everything from the roofing tile to the parking within its boundaries, has created an exclusive neighborhood that keeps property values high and bars public parking on its streets (cars without permits will be towed).

Prices for prime retail locations in the heart of Austin Street and Continental Avenue have risen steadily past $100 per square foot, but the most dramatic growth has taken place on the shopping area's periphery. Retail property on Austin Street toward Ascan Avenue and Yellowstone Boulevard is renting for $50 to $60 per square foot, said Muss Development Senior Vice President Stanley Markowitz, up from $40 per square foot prior to Disney's entry in 1996.

The community's upscale demographics and strong rents are reasons why Manhattan-based W&M Properties and other developers have begun looking for retail space in Forest Hills and other parts of Queens. W&M is a Manhattan-based owner and developer of condo units in larger mixed-use, urban developments and residential complexes in eight states.

Forest Hills has W&M's three elements of a successful retail complex: a residential base with spending power, a daytime employment force, and a destination retail location. W&M redevelops undervalued properties and leases them to "higher quality tenants at better terms for us," said George Perry, the company's vice president of acquisitions.

Family-owned Muss Development Co. anchors one end of Austin Street with a Barnes & Noble bookstore, TGI Friday's, Starbucks, Creativity and other shops at 70-00 Austin St. in a building it had previously leased to Citibank. When Citibank left in 1994, Muss added 20,000 square feet and a parking garage with 400 spaces to the 80,000-square-foot structure.

The Men's Wearhouse opened its newest stores in the building in late October. The 5,500-square-foot store has a dozen employees. "It seems to be the center of activity for a lot of shopping for the local area," said Tom Jennings, the company's vice president for real estate. "We're looking for the highly educated, white-collar customer . . . who wear suits on a frequent basis."

Muss still has 8,500 square feet available at 70-00, but Markowitz said the company will wait for a quality tenant. "There's been lots of turnover on Austin Street and each change seems to be a nice upgrade," Markowitz said. "We love Austin Street and love to do more work there in the future."

Property owner and developer Heskel Elias, who brought Disney to Forest Hills and built one of the company's few storefront sites (most are in malls), has big plans for the area. He partnered with Federal Realty Investment Trust of Rockville, Md., to buy three properties covering 13 storefronts and 55,000 square feet of retail space on Austin Street and Continental Avenue. Elias' accomplishments include the newly renovated United Artists Midway Theater, which opened Nov. 20 with nine screens and stadium seating. On one side of the theater, a Krispy Kreme opened in August. On the other side, the Italian restaurant Tutta Pasta reopened its doors in conjunction with the theater after its own renovation.

The Forest Hills developer is closing the Continental I / II theater in January, with plans for a $1 million rehabilitation. The site will be redeveloped as the United Artists Brandon Cinema Center, a high-tech arts theater with stadium seating named after his 5-year-old son. Elias hopes to open the theater at the end of April.

Elias also has contributed to the drugstore boom in Queens. Forest Hills already had profitable CVS, Genovese and Rite-Aid stores within blocks of each other when Elias signed a deal with Duane Reade Inc. to open a drugstore on Continental Avenue between Queens Boulevard and Austin Street. Construction began last week to convert the Forest Hills Theater space into 20,000 square feet of "mega-retail" space on two levels. The store, which will take 9,000 square feet, is scheduled to open in February.

Additional signs of affluence abound:

• Smith Barney, Austin Securities, Quick & Reilly and Charles Schwab all offer brokerage services and financial information.

• Sprint, Omnipoint, Bell Atlantic Mobile and Telepage are scattered throughout the neighborhood, selling cellular service. Last weekend, Sprint opened its newly expanded store, which consistently ranks as one of the company's top 10 stores nationally in sales.

• New York Sports Club and Lucille Roberts offer exercise facilities.

• Along 70th Road, known to locals as "restaurant row," seven restaurants serving Japanese, Caribbean, Italian, diner food and other cuisine feed hungry shoppers, while other restaurants are scattered across Austin Street.

Farther down Queens Boulevard, the Lefrak Organization - which has developed huge tracts of Forest Hills, Kew Gardens and Rego Park since its founding in 1905 - has signed CompUSA as a tenant in its two-story addition to 97-77 Queens Blvd. to open at year's end. Lefrak also is upgrading buildings, including its 275,000-square-foot, 12-story tower at 95-25 Queens Blvd. Tenants there include Catholic Medical Center, Greenpoint Financial Corp. and Red Lobster.

Space in Forest Hills Tower, which is currently 100-percent occupied, will become available as Con Edison consolidates much of its Forest Hills operations in Brooklyn. The company, whose lease with building owner Muss Development runs out in 2012, has hired Cushman & Wakefield to sublease up to 100,000 square feet at 118-35 Queens Blvd. The property will be available sometime in late 1999.

Residential development, perhaps surprising in an already crowded community, also is taking place within the walls of Forest Hills Gardens. The covenants of the Forest Hills Gardens Corp. dictate and restrict modifications to Gardens property, and public street parking is strictly prohibited.

Within the Gardens, the West Side Tennis Club is selling its tennis stadium to raise funds to build a lap pool, a recreational pool and a kiddie pool. The 3.6 acres, home to the U.S. Open until 1978, is zoned for residential use, and developers must abide by the Garden's design restrictions. Major developers offered in excess of $5 million for the property by the Sept. 20 bidding deadline, said Victoria Tushingham, the club's executive director. The club's membership will vote on the sale after the new year, she added.

With the increased traffic, Muss Development's Markowitz worries about maintaining the development that already exists. Dirty streets and sidewalks and the other problems that come with a popular destination need to be addressed, said Markowitz, who wants the business community to keep the area well-maintained.

Responding to a request from the Forest Hills Chamber of Commerce, Councilwoman Koslowitz funded a capital project for improvements to Continental Avenue from the Long Island Rail Road trestle to Queens Boulevard. Koslowitz chief of staff Matthew Farrell said the two-year, $960,000 project, now freed from the council's budget wranglings with the mayor, will include tree plantings, benches and improvements to the street's sidewalks and curbs.

Renovation of the Long Island Rail Road's Forest Hills 87-year-old station, scheduled to be completed next spring at a cost of $5.7 million, should bring more shoppers to the area on public transportation. The two-year project includes a historic renovation of the grand access stairway where former President Theodore Roosevelt gave his famous unification speech on July 4, 1917. The four platform shelters, the station building and existing lighting fixtures also will be renovated and new lighting and new access ramps for both platforms will be installed.

Not everyone is upset by the traffic and congestion. Austin Street and surrounding streets have always enjoyed a reputation as a popular boutique shopping strip, but the addition of national chains has made the area an even bigger draw.

"The appearance of these major franchises are another notch in Forest Hills' belt," said Robert Hof, owner of Terrace Realty in Forest Hills and a lifelong resident of the Gardens. "These franchises have really added to the [community's] quality of life.