Extell Blinks: Costco Boxed Out

As the Real Estate Observer Blog has pointed out, Extel''s "Riverside Center" on 11th Avenue and 59th Street, is being set for the public reviews process: "Long in the planning stages, Gary Barnett and his Extell Development Co. have finally let loose images of Riverside Center, their planned 3.3 million-square-foot mostly residential complex at the base of the West Side development once known as Trump City. The Department of City Planning put on its Web site today an environmental review document for the project, a draft scope, which outlined the specifics of what Extell wants to put on the site, currently a series of parking lots."

What the blog fails to mention is what the development doesn't include-Costco, or any other big box use. As the Draft Scope for the project reveals: "Appropriate provisions in either a Restrictive Declaration or Special Permit would ensure that no “big-box” retail establishments (i.e.,warehouse clubs or discount department stores) would be included as part of the Proposed Project."

When Extell's plans were initially floated, Costco was prominently mentioned as part of the development; something that generated a great deal of controversy and opposition-particularly from this quarter. The real estate powerhouse, seeing the warehouse club handwriting on the wall, decided it was better to switch than fight. And perhaps Mayor Mike weighed in-sotto voce, as it were-since he received heavy criticism for his support of an auto-dependent box store in Manhattan when, at the same time, he's made traffic congestion a singular issue.

Adding to the Costco revulsion is the fact that the company doesn't accept food stamps. Clearly Extell did not need the Alliance, the UFCW, and a full complement of advocates for the hungry breathing down its neck during the upcoming ULURP process. As is so often the case, a strong initial opposition sent a clear signal to a developer that a different course of action was more prudent. Extell chose discretion over valor, and Costco once again found itself barred from Manhattan.