For more than 100 years, Columbus Circle has frustrated New Yorkers. The site of the world's first traffic rotary, it's often difficult to do anything but go with the flow here. Even figuring out where traffic is flowing — or whether it is flowing — is a perpetual challenge for both drivers and pedestrians.

Likewise, developers intent on launching their own ambitious Columbus Circle projects have run up against similar roadblocks in the form of economic cycles and shifting political regimes. The difficulties of building over the massive 59th Street subway station only added to the challenge.

This tricky combination has historically imbued Columbus Circle with a Bermuda Triangle aura for developers. William Randolph Hearst could start a war with Spain, but the media baron was stymied in his bid to transform Columbus Circle into the next Times Square in the 1920s.

Robert Moses, New York's master builder, one-upped Hearst when he opened the New York Coliseum in 1956. But his convention center was hardly the monument to the ages he intended: only 30 years later, the opening of the larger Javits Center trumped what Moses biographer Robert Caro called his “glowering exhibition tower.”

In the 1980s, publisher and real estate baron Mortimer Zuckerman also failed in his bid to replace the Coliseum with a mixed-use tower. Community activists successfully rallied against the height of the proposed skyscraper and planning groups prevailed in suing the city.

Time Marches In

In spite of all the historic obstacles of developing Columbus Circle, Stephen Ross, chairman and CEO of The Related Cos., Kenneth Himmel, president and CEO of Related Urban Development, Related's mixed-use division, and William Mack, senior principal of Apollo Real Estate Advisors, succeeded in crafting a project that satisfied enough community activists, investors, retailers and politicians that it could be built.

Even the influential Municipal Art Society, which opposed the Zuckerman bid, is positive about the 2.8 million sq. ft. Time Warner Center. “I think people are excited by the building,” says MAS President Kent Barwick.

Designed by David Childs of Skidmore, Owings & Merrill, the $1.7 billion center boasts myriad uses. Robert Moses called his hall a Coliseum, but it's a title better suited to the Time Warner Center.

Mixed-use development on a grand scale, the 80-story twin towers include 865,000 sq. ft. of office space for Time Warner, 1,970 seats in three concert halls for Jazz at Lincoln Center, 201 multi-million dollar condominiums, a 250-room Mandarin Oriental luxury hotel, as well as 211,000 sq. ft. of Class-A office space. At its base is a six-story mall, 347,000 sq. ft. of retail space that will include everything from ultra-high-end restaurants to a Borders bookstore and a Whole Foods supermarket.

But will a building that serves what The New Yorker magazine architectural critic Paul Goldberger calls a “Rubik's cube” of uses be able to support its many uses in a vertical format?

“It's a difficult thing to pull off, especially in a city like this where you have so much ground-level retail,” says Jedd Nero, executive vice president of the retail group at CB Richard Ellis in New York, which represented Hugo Boss, a high-end apparel tenant in the building.

Related's Himmel, who developed the retail space, says that vertical retail can work if it's done right. “How is it that cities all over the world, whether it's Paris or Hong Kong or Shanghai or San Francisco or Chicago deliver these very exciting vertical retail experiences that do so well, but no one's ever done it in New York?” he asks.

The answer is not that vertical retailing won't work in New York, Himmel believes. It's just that no one has ever done it well here. “If you look at Trump [Tower] on Fifth Avenue and if you look at Manhattan Mall, I think you're looking at examples of absolutely the wrong way to do it,” he says. The way those projects were planned, designed and executed, he says, gave people few reasons to go upstairs.

Himmel's confidence in vertical retailing stems in part from the role he played 28 years ago building Water Tower Place in Chicago, an eight-story center which he says still draws 25 million shoppers a year. “If you put the merchandise together the right way and you plan the project the right way, and [plan the pedestrian circulation] the right way, it's a wonderful experience,” he says.

Food Lovers' Paradise

Another risky element of the strategy is the restaurant component. Unlike most malls, food was not an afterthought in the Time Warner Center. Himmel, who's been in the restaurant business for 25 years in addition to his other ventures, says that food is really the anchor of the retail side of the center. “The spine of this project, the heart of the project, is really built around food,” he says.

Himmel has lured a constellation of top restaurateurs to open three high-end restaurants on the center's upper floors — and claims that the very size of the bet makes it less risky.

“The safety in the investment side of this is having the collection of people we've put here,” Himmel explains. “Having literally six Michelin 3-star chefs in one building, between Mandarin Oriental and our retail scene, creates a destination experience that's unparalleled anywhere in the world,” he says.

Not all those venues have opened yet. The more basic food offerings, however, already appear to be a success. Himmel claims that the center's 60,000 sq. ft. Whole Foods outlet is “blowing the socks off everybody's numbers,” and predicts that it will bring in between $85 and $90 million its first year. Whole Foods was not available for comment.

The center's horizontal axis may present yet another risk factor. “The hardest part about this site is the circle and the traffic pattern there,” Nero says. “That makes it difficult to walk or drive, and I think that was one of the main factors that retailers looked into as a possible negative.”

Barwick of the Municipal Art Society notes that pedestrian access has always been a problem at Columbus Circle. He says he's viewed pictures from early in this century that show people caught in traffic as they try to cross the street.

And Tom Wright, executive vice president of the Regional Planning Association, isn't optimistic that there's much that can be done to improve the situation, particularly given the subway stations below. “Broadway screws up the avenues wherever it hits one, and at Columbus Circle it hits it with a vengeance,” he says.

In spite of these challenges, Nero and other retail brokers are positive about the center. Nero says that the global media visibility Time Warner offers and the fact that the center is close to 57th Street and the Upper West Side were all big pluses for his client.

Retail Strength

Himmel says retail brokers appear optimistic that the center will lift the Columbus Circle submarket as a whole. “I think we're going to see a lot of good roll off north and south of it,” echoes Faith Hope Consolo, vice chair of Garrick-Aug Worldwide, a New York retail broker who is handling the rental of 10 shops across the circle from the Time Warner Center.

Already, according to Consolo, ground floor retail rents have climbed to $200 per sq. ft., up from a range of $125 to $150 per sq. ft., which is more in line with the Upper West Side and Upper East Side than previously.

For residential values, the center may be creating an updraft as well. Emma O'Brien, a senior vice president for Halstead Properties who specializes in high-end residential property, says the condos in the Time Warner Center are changing the way her clients look at 57th Street and Central Park South property. The area was traditionally considered to be less prime than the Upper West Side in general and Central Park West in particular.

The center's 201 luxury condos feature dramatic views of Central Park and even more dramatic price tags: Prices start at $2.5 million for a 1,200 sq. ft. two bedroom with a western view and go up from there. Despite that fact, the condominiums are now nearly 70% sold, says Himmel.

Office Component Faces Obstacles

But when it comes to office space, the old Columbus Circle curse may still endure. The Hearst Corp. is building a 42-story tower nearby at 56th Street and Eighth Avenue atop the six-story art deco building it's called home since 1928 just a few blocks away from Time Warner's 865,000 sq. ft. of space. However, brokers aren't optimistic that the presence of these two media giants will change values in the Columbus submarket.

Even in the center itself, there are signs that the approximately 200,000 sq. ft. of rentable office space not occupied by Time Warner may have proved a hard sell. Until recently, agents were asking about $80 per sq. ft. for space in the tower, with a $40 per sq. ft. build-out allowance, according to Robert King, a broker at IGDNYC, a Manhattan commercial brokerage agency. But now Himmel says Related and Apollo have leased the balance of the office space.

Many observers believe transportation issues will hobble Columbus Circle's future as an office district. Although Columbus Circle is a major subway hub for the Upper West Side, it requires a change of trains to reach from Grand Central. The center also is beyond walking distance from the Port Authority bus terminal and Penn Station.

Patrick Gardner, a senior vice president at CRESA Partners in New York, says that Carnegie Hall Tower, 152 West 57th Street, between Sixth and Seventh avenues is about on the fringe of how far west Class-A clients will go. “We don't go too much farther up or west than that,” he says. However, Gardner notes, individual circumstances of executives can affect those decisions — for a law firm partner who lives on the Upper West Side that could be a great location.

Another limiting factor is the condition of the office space. Much of the space near Columbus Circle is Class-B, according to King of IGDNYC, which maintains its offices in the neighborhood. Class-B space in the submarket runs about $25 per sq. ft., according to King, about one-third of the cost of Class-A space in the gleaming towers nearby.

Early Reviews Are Positive

So has Columbus Circle finally changed its luck? There are several positive signs: foot traffic through the mall area is strong, the new Whole Foods store at the foot of the building draws thick crowds on a daily basis, and the apartment units appear to be selling.

The office component may be the trickiest, but a strong commitment by the developer to occupy much of the space has clearly helped.

Meanwhile, The Related Cos.' willingness to bend its vision (critics have made much of the fact that the building curves around the Circle and is not a square peg in a curved hole), may make the firm's work more enduring than that of the notoriously imperious Moses or Hearst.

Wynton Marsalis, the artistic director of Jazz at Lincoln Center, has described jazz as “the graceful art of negotiation” — but it's a description that could prove to be the secret of his new landlord's success.

Bennett Voyles is a New York-based writer.

ALL STAR CHEFS

The Time Warner Center will feature restaurants run by six three-star chefs, the highest number under one roof in the world.

RETAIL VITAL SIGNS

Tenants at The Shops at Columbus Circle, which is 98% leased, include everything from ultra-high-end restaurants to Borders bookstore to a Whole Foods Supermarket.