Rent increase in Chelsea might force out longtime filmmaker




Leasing this office space in a once-industrial building for the 17 years, Marc Levin is concerned he will not be able to stay any longer. "I have a realtor come and said, ‘you’ve got the most valuable space in all Manhattan.’ So there’s no way I’m going to be able to [stay]," he said. Photo: Keenan Chen.

Marc Levin in his Chelsea studio of 17 years is not sure how much longer he can afford to stay. Photo: Keenan Chen.

In his studio on West 26th Street by the Hudson River, independent filmmaker Marc Levin just completed another documentary, and a personal one. His latest work deals with gentrification in Chelsea where rapid changes are pricing out longtime residents, including Levin himself.

The film, “Class Divide” , which debuted on Oct. 3 on HBO, shows the drastic socio-economic divisions within the neighborhood, from families in public housing to an influx of wealthy families who move into nearby multi-million dollar condos or send their children to The World School, a private Pre-K to 12th grade school with a minimum tuition rate of over $47,000 a year.

Levin, a recipient of several prestigious film awards, including the duPont-Columbia, Peabody, and Caméra d’Or, doubts he will be able to afford to stay in Chelsea much longer.

“When I face the end of my lease, and given the marketplace, the rent increase is going to be two or three times more than I paid over the years,” said Levin. His business partner, Alex Gibney, an Academy-Award-winning documentarian, sublets a portion of Levin’s studio, and has been looking for a new space outside of Chelsea.

“We’re lucky we’re successful, but we’re not a hedge fund. You’ve got to move and even moving to Brooklyn is expensive,” said Levin, who heard some tenants in his building plan to relocate because neighboring office space was going for $80 per square foot a year, while “fair market rate” is around $40 per square foot a year. Though he didn’t disclose the exact number, Levin said he’s paying “a few hundred thousand dollars a year” for his 18,000 square-foot space.

Once an industrial neighborhood, Chelsea is now one of the hottest markets for office space in Manhattan, with a nearly 100 percent rent increase in the past decade, according to financial consulting firm JLL. In a September survey, office space vacancy rate in Chelsea was only 5.9 percent, the second lowest in all submarkets and well below Manhattan’s average of 9.9 percent. The overall asking rent in Chelsea is $62.40 per square foot a year, higher than the Financial District’s average of $53.07.

“It would have been the reverse 20 years ago,” said Tristan Ashby, a vice president at JLL. “You would have to pay a lot more to be in the Financial District than in Chelsea.”

Ashby said amenities such as restaurants, bars and the High Line draw many younger tenants to the area. Google took over the old Port Commerce Building on Ninth Avenue between 15th and 16th streets in 2010.

When Levin first moved into the neighborhood in 1975, he recalled, there were three delis at the corners of 26th Street and Sixth Avenue. Today there are high-end Japanese and Italian restaurants and a Starbucks, convenient options for the future residents of 212 Fifth Ave. a luxury condominium building with a minimum price tag of $4 million a unit.

In the 1990s, when Levin moved his film studio into the Starrett-Lehigh building on West 26th Street, he said the area was not a pleasant place. “Nightlife, you know, a lot of after-hour clubs. The West Side Highway tunnel was a big pickup joint for prostitutes. Truckers would stop there to pick people up,” he said.

Since then, like many industrial buildings in the neighborhood, the Starrett-Lehigh building has undergone renovations, and big-name companies like Tommy Hilfiger and Ralph Lauren have moved in, driving the rent up rapidly, said Ashby.

Like Levin, some local officials are concerned that old businesses and residents will get pushed out of the neighborhood.

City councilman Corey Johnson whose district includes Chelsea, said in an email that he “often hears from restaurants, clothing boutiques, laundromats and many others who are hanging on by a thread.”

The Salvation Army Family Store on Eighth Avenue near 21st Street cut its hours due to increasing rent, taxes and other expenses. Photo: Keenan Chen.

Lee Compton, a member of Community Board 4’s Chelsea/Hell’s Kitchen Land Use Committee, said West Chelsea is “homogenizing and it’s for the rich.”

Compton said several businesses in the area have 10-year leases. “The West Chelsea and the High Line district have been so successful, rents go up like crazy and businesses can’t afford to stay, but we don’t know what to do about it,” he said.

Inside Chelsea Bicycles, located on 26th Street between Sixth and Seventh avenues, manager Victor Galvan said the rent has increased at least 30 percent since the store moved in 12 years ago. Despite more competition with online bike retailers and the Citi Bike program, Galvan said the store intends to stay. “The rent is a little high but we can still handle,” he said, adding, “we don’t make the same money.”

Burt Lazarin, who co-chairs CB4’s Business License & Permits committee, said the working-class population in Chelsea needs small business to survive.

“We want business that supports and caters to everyone who lives in the neighborhood,” said Lazarin, who explained that some landlords force out small businesses and leave their spaces vacant until high-paying tenants move in. “You can’t have a real neighborhood if you have expensive restaurants one after another. We need a hardware store or a place to get your shoes fixed.”

Lazarin said he thinks the city council should pass legislation so that landlords will no longer have the incentive to keep their stores vacant for long periods of time.

Levin, who might be moving his studio to Brooklyn when his lease ends, said he hoped the working-class community will stay in Chelsea and provide a model to deal with gentrification across the country.

“We’re kind of a vanguard community, a creative community,” he said. “We do have a chance to have a say through our local representatives and to manage this in a way that we don’t lose the soul, the soul of our neighborhood and New York.”