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Penn Station Tunnel Project Puts Ousted Stores in a Tight Spot

By DNAinfo Staff on July 20, 2010 10:23am

By Jill Colvin

DNAinfo Reporter/Producer

MIDTOWN — Jewelry store owner Adam Gindi has spent the past year and a half hunting for a nearby storefront to relocate his business to, after learning his building was among those set to be demolished by the Port Authority to make room for an expanded Penn Station.

But the owner of "Gindi's Diamond and Dials" has become convinced that there’s no available storefront property near his current location at West 34th Street and Sixth Avenue, despite the ongoing recession that some believed would open up the Manhattan retail space market.

"It's devastating," said Gindi, 46, whose family-owned store is among the more than 90 businesses that will be displaced by the $8.7 billion Penn Station expansion project boring two new tunnels under the Hudson River. "I'm going to be lost. I don’t know what to do."

While the Port Authority is planning to reimburse displaced tenants for the costs of relocation, experts said the dearth of retail space could make the process of finding a replacement space in Midtown nearly impossible.

"It's going to be a problem," said Joanne Podell, an executive vice president at Cushman & Wakefield, who specializes in retail leasing in the city.

Despite the recession, Podell said that finding space is the area is "very tough," especially for smaller, independent retailers like many of those that are being displaced. Tenants like Gindi who are looking for spaces under 1,000 feet in the area will have a particularly difficult challenge.

"It doesn’t exist," Podell said.

But it's not just mom-and-pops that are panicked. Mega-corporations are worried, too.

Two Starbucks locations — one at One Penn Plaza and another on Seventh Avenue between West 34th and West 35th streets — are marked for demolition, along with outposts of the Sunglass Hut, Modell's and AT&T.

At a public hearing on the issue earlier this month, Starbucks attorney Michael Zarin said the company has "significant concerns" over the closures.

There are very few viable options in the area, he said, especially space that has the kind of visibility the current storefronts have. And because of the company's business model, the new locations must be located nearby.

Port Authority spokesman Ron Marsico said the authority is planning to work with businesses to find new spaces, and has hired a relocation consulting firm to assist with the hunt. 

But for some, even that assistance has not been helpful.

Jim Hickey, 74, the owner of 43-year-old Hickey's Bar on 34th Street, was told he should consider moving to Avenue C.

His bar, which was once popular with union workers stopping in for mid-day pints, is now a common spot for commuters catching a drink before boarding their trains  — worlds away from the Lower East Side.

Like Hickey, Gindi said he can't imagine working anywhere else.

"Another neighborhood's a new world," he said sadly. "I'm basically going to have to start from the ground up."