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For New York to Get Better, Times Square Has to Get Worse

The sensory-overloaded tower will offer visitors the chance to do quite a lot, all in one place: They will be able to sing along with a hologram of their favorite pop star, spend their cryptocurrency, marvel at ever-changing digital art on the walls and dine on a 10,000-square-foot outdoor terrace. It will be an enviable perch to gaze out at Times Square, a neighborhood that before the pandemic represented 15 percent of the city’s economic output in just 0.1 percent of the land area.

If it sounds like an amusement park in the middle of Manhattan, that is the point. The developer, David Levinson, has described the new building as a “vertical Disneyland.”

In an interview, he said this 46-story entertainment venue and luxury hotel, called TSX Broadway, would be like “the metaverse intersecting with Times Square and Las Vegas,” but without the gambling.

And at the heart of that intersection is the famed Palace Theater, which has been lifted 30 feet into the air as part of the $2.5 billion TSX development, presiding over a Times Square that is grappling with its post-pandemic future.

The Palace Theater, inside the TSX development, center, weighs 14 million pounds and is a protected landmark.Credit…Jeenah Moon for The New York Times

The theater’s evolution is a tidy encapsulation of the evolution of the city’s entertainment scene, an economic engine that has always drawn visitors to New York. The Palace opened as a vaudeville venue in 1913, at a time when the invention of neon lights was turning the area into a nighttime theater district. It became a movie house, then a Broadway theater.

In the 1990s, an effort to clean up the seedy image of Times Square brought new office buildings to the area. A Doubletree Hotel was built on top of the Palace Theater, heralding a booming era for tourism in the city. The theater where Judy Garland and Liza Minnelli once performed was now showing “SpongeBob SquarePants,” the musical.

The revitalization of Times Square was almost too successful at attracting people, turning the sidewalks into a live-action video game where lawyers and accountants were forced to push past selfie sticks and costumed Elmos to get inside their offices five days a week. But that was Times Square as it was intended to be — a destination for both work and play.

In March 2020, the entire ecosystem collapsed. Images of the eerily empty square ricocheted around the world and became a symbol of the city’s devastation as an epicenter of the pandemic.

Streets in Times Square were empty at the end of March 2020, after the first major outbreak of Covid-19 reached New York.Credit…Jeenah Moon for The New York Times

Early in the pandemic, an existential question facing New York City was what would still attract people to neighborhoods like Times Square.

As it turned out, the Palace Theater would symbolize a key piece of the answer: People come to New York to have fun.

The problem is that’s only half the equation. The more crowded Times Square becomes with visitors, the more off-putting it is for the white-collar office workers who now have the choice to work from home.

More than 300,000 people are regularly walking through the neighborhood each day, about 20 percent below prepandemic levels, according to the Times Square Alliance, which represents the area’s businesses. On some days this month, there was even more foot traffic than on the same day in 2019.

But even as restaurants, Broadway shows and concerts are feeling crowded again, the office is not. As of late April, 38 percent of Manhattan’s office workers were at their desks on a typical weekday, according to a survey released this month by the business advocacy group Partnership for New York City. Only 8 percent were back five days a week.

The Return of Return-to-Office Plans

Though Covid cases are on the rise again, companies are still attempting a return to some form of in-person work, amid hybrid-work models and office revamps.

  • Conference Rooms: These once-boring spaces are getting a reboot, with more democratic designs and cozier spaces.
  • Separation Anxiety: As New Yorkers increasingly contemplate a return to the office, a day of reckoning has arrived — for them, and their beloved dogs.
  • A Puzzling Situation: As the uncertainty brought on by a new Covid wave complicates companies’ hybrid arrangements, leaders are left scratching their heads.
  • Inflation Woes: As prices continue to go up, the cost of an R.T.O. routine — travel, coffee, food — is adding to workers’ concerns.

Lately, the conversation around returning to the office has centered on public safety following a string of violent crimes on the subway. Daniel Enriquez, a Goldman Sachs employee, was fatally shot on a subway last Sunday on his way to brunch. Four months earlier, Michelle Go, a Deloitte employee, was pushed to her death on the subway tracks at the Times Square station.

A retail space that, before the pandemic, was a popular McDonald’s, on 42nd Street in Times Square.Credit…Jeenah Moon for The New York Times

This is bad news for Times Square, where 20 percent of storefronts are still closed. The surrounding blocks are home to more than two dozen office buildings. Many businesses rely on commuters to spend money around the office on coffee, lunch, dry cleaning and happy hour. Hotels depend on nearby office buildings to bring business travelers in for meetings, helping to fill up rooms on weekdays.

Times Square is vital to New York City’s recovery, given its concentration of office buildings, tourist attractions and hotel rooms around the city’s busiest subway station. In 2016, Times Square’s economy was the same size as the city of Nashville’s.

Many of New York City’s political and business leaders are desperate for office workers to come back. The pandemic wiped out more than $28 billion in value from the city’s office buildings, according to a report last year from the New York State Comptroller’s office, a potential threat to the city’s tax base and fiscal health.

“Imagine if just a piece of that disappeared, how we would have to fill that gap,” said Seth Pinsky, who was an economic development adviser to former Mayor Michael Bloomberg’s administration. “We would have to raise taxes or cut services, and that’s exactly the trap that we want to make sure we don’t fall into.”

At a news conference in Times Square this month, Mayor Eric Adams declared in a speech that “the comeback of America starts here in this square.”

Tom Harris, the president of the Times Square Alliance, thanked the mayor and then said: “You’re in Times Square more than most of our office workers, so our office workers need to step up and show up.”

The Tourists

Visitors on the red stairs in Times Square, a popular spot for selfies.Credit…Jeenah Moon for The New York Times

Times Square is the most Instagrammed landmark in America, according to an analysis by the photo printing company Printique.

On a recent Friday, that designation seemed to be holding strong: Aspiring influencers posed on the red staircase above the TKTS booth that sells discounted Broadway tickets, framed by screaming billboards. A group of tourists pointed excitedly at a giant chocolate bar inside the Hershey’s store. On the sidewalk, men dressed as monks tried to foist bracelets onto pedestrians, as other street vendors hawked sliced mangos and tour bus tickets.

They joined the swarm of 303,256 people who walked through Times Square that day, according to the Times Square Alliance.

Cilou Schalkwijk, 21, a college student in the Netherlands who recently visited the area with friends, said the bright lights made for an irresistible backdrop. “It’s the image people get of the American dream,” she said. “That’s just how I perceive it. It’s showing off how good your life is.”

Ms. Schalkwijk was posing for photos near the site of the lifted Palace Theater, for which construction began in 2019, when New York City hosted a record 66.6 million visitors.

The stakes are much higher now.

Tourist numbers are not expected to return to prepandemic levels until 2024, according to official forecasts from NYC & Company, the city’s tourism promotion agency, which projects that 56.6 million people will visit this year.

Visitors posing for a photo with costumed characters in Times Square.Credit…Jeenah Moon for The New York Times

For the tourism industry, the drop in foreign travelers is especially concerning because they tend to stay longer and spend more money than domestic visitors.

With TSX, Mr. Levinson, who is the chief executive of L&L Holding Company, is betting that after the pandemic, all tourists will want is the convenience of watching a Broadway show, eating at an outdoor restaurant, partying at a nightclub and returning to their hotel rooms, without ever leaving the building.

He said the density of foot traffic at the TSX site, at the corner of 47th Street and 7th Avenue, near the ball drop on New Year’s Eve, makes it “the most important corner in North America.”

Hotel occupancy is edging closer to prepandemic levels. In mid-May, about 76 percent of the available hotel rooms around Times Square were filled, compared with 90 percent before the pandemic, according to STR, an industry research firm.

Still, without a robust return of international visitors or business travelers, the outlook for many hotels is a question mark. The Sheraton New York Times Square Hotel, the third-largest in New York City by room count, sold this year for about half its purchase price in 2006.

During the pandemic, NYC & Co. redoubled its efforts to market Times Square in promotional videos, trying to find ways to fill the city’s surplus of hotel rooms.

Matt Cross, 27, a financial adviser in London, took his first flight of the pandemic last month to vacation in New York. He walked through Times Square at night, which he said was a “rite of passage” for any tourist. As if to prove his point, he said, a group of topless women painted with American flags asked if he wanted to take a photo with them.

The Workers

The Durst Organization rebranded its 4 Times Square office building as 151 West 42nd Street in an attempt to make its location more palatable to people who would work there.Credit…Jeenah Moon for The New York Times

For office workers, Times Square has been a tougher sell.

At 5 Times Square, the developer, RXR Realty, is adding a gym, bar, restaurant and subway entrance inside the building — so that the only exposure employees will have to Times Square will be at a remove, from high up, looking down through a window.

Starting in 2017, the Durst Organization rebranded its 4 Times Square office building as 151 West 42nd Street, distancing its association with a neighborhood that office workers dreaded walking through.

In the 1970s, as New York City faced a fiscal crisis, cuts to city services and rampant crime, a successive line of mayors made the revitalization of Times Square a cornerstone of their economic development plans. The neighborhood had become synonymous with drugs and prostitution, dramatized in movies like “Taxi Driver.”

Lured by new tax incentives, a crop of developers began building the first office skyscrapers there, and major companies like the magazine publisher Condé Nast moved in starting in the 1990s. The hope was that the office workers would act as an anchor for Times Square, filling its restaurants and theater seats during the week.

But as city officials like to say, Times Square became a victim of its own success. The tourism industry in the 2000s became a major economic driver and created hundreds of thousands of new jobs, but also turned Times Square into a mosh pit of tourists.

Before the pandemic, with their leases expiring, many of the first companies that moved to Times Square, including the law firm Skadden Arps and the accounting firm Ernst & Young, decided to relocate to other neighborhoods.

A new mix of tenants have taken advantage of pandemic discounts. Companies like TikTok, the video-sharing app, and Roku, the digital media player manufacturer, have announced plans to move to Times Square.

Even though leasing is picking up, Midtown Manhattan’s office buildings still have the highest vacancies on record, at 18.2 percent, according to Newmark, a real estate services company.

To lure office workers back, the Times Square Alliance is trying to make any given workday afternoon an unmissable event, with new programming in the plazas, including jazz musicians, Broadway performers and art installations.

In Times Square, restaurants and coffee shops, like this Starbucks, are often a crush of both tourists and local workers.Credit…Jeenah Moon for The New York Times

That hasn’t worked for Eileen Ng, 33, a tech consultant who has stepped inside her Times Square office just a handful of times in the last two years, even though her commute is only a 20-minute walk.

Ms. Ng said she generally tries to run out of Times Square as quickly as possible. “If I asked a friend if they wanted to sit in the plaza in Times Square, they would be like, why?” she said.

Ms. Ng said she was stressed about wading through the crowds again to find lunch. And she expressed concerns about rising reports of attacks against Asian Americans during the pandemic.

Around Midtown, developers are renovating their office buildings to make them more appealing to workers, pitching things like wellness rooms with masseuses and lobby concierges where office workers can order lunches for delivery.

For some building owners, the pandemic forced them to embrace outside-the-box tenants. In an especially unusual deal, Touro College announced that it would soon move its new main campus to Times Square. The office building that was previously used by Thomson Reuters, the media organization, will now be home to thousands of students.

“Dancing cowboys is not necessarily the image of an educational institution, but we thought that was overshadowed by the advantages of the neighborhood,” said Alan Kadish, president of Touro College, citing the accessibility of subway lines for the university’s primarily commuter student base.

The Future

The lifting of the Palace Theater was full of risks, including possible damage to the Beaux Art interior and a full collapse.Credit…Jeenah Moon for The New York Times

When the Palace Theater’s ornamental interior was designated a historic landmark in 1987, the city’s preservation commission said the theater was “virtually uncontested” as the most famous Broadway stage, with a legacy that had defined the surrounding neighborhood.

So it is perhaps fitting that the Palace, with its interior preserved, has been lifted inch by inch to make way for an augmented-reality playground for tourists.

An online rendering of the TSX entrance showed a giant hologram of a sneaker beamed down from the ceiling. Some spaces will be accessible only to visitors who purchase certain NFTs, or

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