NYC's Meat-Packing Area
Meets High-End Fashion

When hair stylist Philip Pelusi started making plans to expand his successful Pittsburgh hair salon business to New York City, he didn't go to fashionable Madison Avenue or trendy Soho. Instead, he's leased space in an area that is quickly emerging as Manhattan's most cutting-edge neighborhood - the meat-packing district, roughly an eight-block-square area running south from West 14th Street and west from Hudson Street.

"To me it's edgy and creative," said Pelusi, who has leased 3,400 square feet of space in the meat-packing area, with a plan to open his first New York City salon, P2NYC, on April 1.

Pelusi, who owns 13 hair salons in Pittsburgh and a line of high-end hair products that are sold in salons in various parts of the country, said he never considered Madison Avenue or any other site. He knew the meat-packing district was the place the moment he set eyes on it.

"There's something nice about having this strange mix of meat and produce and high fashion coming together," he said. "I don't think New York has had a movement quite like this since the early days of Soho or maybe Tribeca."

Pelusi will be joining a growing number of hair stylists, high-end fashion designers, galleries and trendy nightclubs that have been snapping up space in this once undesirable neighborhood over the past two years.

Indeed, Manhattan's meat-packing area has come a long way. As recently as five years ago, the neighborhood was little more than seedy warehouses where foul odors from 125 meat-packing shops emanated into the air.

"The area has really gone off the map in the last two years," said Faith Hope Consolo, vice chairman at retail brokerage firm Garrick-Aug Associates. In 2002, the area fetched rents of $75 to $100 a foot at a time when Soho was fetching as much as $400 a foot, said Consolo. For many, the price and larger spaces were tough to resist.

High-priced "it" designers, such as Stella McCartney, Alexander McQueen, Catherine Malandrino, RubinChapelle, Bodum and Carlos Miele have all moved into the area.

Sally Hershberger and Bumble and Bumble are just a few of the hair wizards that Pelusi will be competing with in this district.

"It looks like the Marais area of Paris," quipped Consolo.

Jeffrey Kalinsky Had A Dream

Jeffrey Kalinsky, an Atlanta fashion aficionado, was the first retailer to take a chance. He's seen as the pioneer, who looked past the dilapidated warehouses and saw a diamond in the rough. His eye for real estate is only trumped by his eye for fashion.

He opened a 12,000-square-foot store on 14th Street near 10th Avenue in 1999, called Jeffrey, that caters to New Yorkers with deep pockets and a desire to wear the latest and most cutting-edge fashions. It was a big gamble - but he started a trend.

"I guess I just really bought into that field-of-dreams belief," whereby "if I built something really really good, they would come," said Kalinsky.

"And look at the rent that I got!" said Kalinsky. "I was an independent retailer from Atlanta with limited funds and a dream and I had to go somewhere where dreams can come true." He said he couldn't afford to go to an "established" area such as Soho.

"Everybody said 'what - is he crazy? He's in the middle of nowhere,' " said Consolo.

But, as Soho began pricing people out of the neighborhood, designers began following Kalinsky to the meat-packing area. "If Jeffrey hadn't gone there, nobody would have gone there," Consolo said.

She said the area fetches about $150 a foot today, and she predicts rents will top the $200-a-foot mark by the end of 2005.

She sees the meat-packing district as a throwback to Soho eight years ago when smaller cutting-edge designers, galleries and trendy nightclubs were first moving in.

"The area looks like the old Soho," said Consolo. Well - sort of.

It's true there are far fewer meatpackers in this new area - but they haven't gone away. And a putrid odor was still hanging in the air during a recent weekend stroll through the meat-packing area on a sunny summer afternoon.

Consolo admits "the traffic isn't there" yet. While Soho is busy seven days a week, the meat-packing area is "more weekends." Trendy restaurants, such as Pastis and the Spice Market, and chichi nightclubs, such as Lotus, are drawing people at night.

"(But) if you go walk on the street on a weekday, there's nobody there," she said.

Consolo believes it will take a few more years and more residential and hotel development for the traffic to come during weekdays.

Kalinsky dismisses suggestions that the area isn't getting the traffic yet. "I think traffic for luxury retailers is an overrated concept. Traffic is important for mass businesses, but it's not what drives a luxury retail store," he said. "It's clientele building."

"You want your dressing rooms full of people, not your store full of people," he said.

Still, Kalinsky admits the area buzzes at night as people flock to the lounges, restaurants and nightclubs. He believes the "day" businesses are just in the "beginning stages of the growth that will happen in the area."

There have been published reports that Kalinsky is currently shopping his business - a rumor Kalinsky denies.

Dale Anne Reiss, global director for Ernst & Young's real estate, hospitality and construction practice, describes the meat-packing area as an "edgy" area that has been blossoming in the last couple of years. And if the industry pushes ahead with plans to redevelop the far west side of Manhattan to coincide with the city's bid for the Olympics, she believes this area will flourish even more.

Despite the limited traffic and high competition, Pelusi isn't concerned. He's already mapped out a plan that will put his salon a cut above his competitors. His will feature a wine bar and art gallery adjacent to the hair salon, where people can drop by and mingle. He said the space will reflect his artistic bend.

"This will definitely be different. I want it to be as unique as possible" - one that won't be easily duplicated and will reflect his artistic passion, he said. He said the area and layout of the property will reflect this.

Despite the area's rough edges and meat-packing presence, Pelusi is convinced this is the place of the future.

"Now is the time to get in," he said. "If you wait for something to be perfect, it's too late."

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