East Harlem Business Capital Corporation
2261-63 First Avenue
3rd Floor
Entrance at 357 East 116th Street
New York, NY 10035

Tel: 212.427.6590
Fax: 212.427.6537

East Harlem Business Capital Corporation
Briefing on La Marqueta Internacional

Project Description

The East Harlem Business Capital Corporation (EHBCC) has undertaken the development of La Marqueta Internacional – which will be a vibrant and robust public market in the heart of El Barrio. This project proposes to totally restore the historic La Marqueta venue, a city-owned retail market in East Harlem located under the Metro North Viaduct along the Park Avenue Corridor.

While the site is currently under the administrative jurisdiction of the NYC Economic Development Corporation, EHBCC received site designation from Mayor Michael Bloomberg in December 2003. Since that time, we has aggressively pursued project partners to secure the necessary financing and planning to recreate La Marqueta into an enviable “International Public Market” with a distinctive Latin flavor in keeping with East Harlem’s heritage as the Mecca for Puerto Rican, Hispanic, and Latin American art, music, culture, and cuisine.

The proposed redevelopment of La Marqueta will include the full development of the site from 111^th Street to 119^th Street as a retail center, and will cost approximately $16 million. The market will consist of six buildings totaling approximately 85,000 square feet. In addition to the enclosed areas, there will be open plazas and a new streetscape with sidewalks for pedestrian traffic around and along the La Marqueta corridor. Tenants in these six buildings will range from wholesalers to retailers, small cafés to anchor restaurants, and a variety of small kiosks that highlight East Harlem’s unique cultural history, as well as its evolving future. The project will create approximately 200 jobs.

La Marqueta Internacional will meet the existing and growing demand for retail food shopping venues in East Harlem, particularly for fresh meat, fish and produce. The tenants of La Marqueta will also focus on unique ethnic foods, reflecting the multi-cultural nature of the community. While the original La Marqueta had a distinct Puerto Rican flavor, the new one will feature products from a variety of Latin American cultures and West Africa as well, reflecting the recent immigration from those areas. In addition to the traditional market, La Marqueta will be the host of special events (e.g. performances by local musicians, exhibitions by local artists, and more) throughout the year, creating a festive air that will make the market a destination for tourists and city residents alike.

Background

Stretching from 111^th to 116^th Streets, La Marqueta was a source of tremendous pride for the predominately Puerto Rican population that came to dominate the area after World War II. After opening in 1936 under the LaGuardia Administration, La Marqueta was home to over 200 vendors selling fish, clothing, medicinal herbs, records, religious items, tropical fruits and vegetables. That vibrant and lively history of La Marqueta is now just a memory to the East Harlem community. According to a December 2001 special report on small business in Crain’s New York Business, the current La Marqueta is the least patronized municipal market in the City of New York. Today there are just eight vendors, and they occupy only 50 percent of one of the original five buildings.

Economic Development Impact

There is no question that the restoring of La Marqueta will significantly elevate the visibility of El Barrio/East Harlem and its commercial and cultural corridors. La Marqueta will once again become a destination not just for local residents but for the entire city, as well as for tourists at a national and international level.

EHBCC, with its various designations, access to financing and, most recently, as a registered CDE (Community Development Enterprise) able to channel Federal New Market Tax Credits, has the mindset and the capability to make this project happen. In addition, the EHBCC will take full advantage of the substantial benefits of La Marqueta’s geographic position inside both the Upper Manhattan Empowerment Zone and the State Empire Zone to ensure the project’s success.

EHBCC believes that the new La Marqueta Internacional will constitute the largest and most unique agricultural/ethnic market in Manhattan. Although there are other ethnic markets and shopping areas such as Chinatown, Little Italy, and the Essex Street Market, there is not a Latino market place in the City. The development of La Marqueta Internacional as a Hispanic marketplace will fill a gaping hole by recognizing the vibrancy of the growing Puerto Rican and Latin American community in the City, as well as revive its economic potency to benefit all in East Harlem for years to come.

Potential Tenants

EHBCC has met with the eight current tenants of La Marqueta to ascertain their interest in remaining in operation after the site is redeveloped into La Marqueta Internacional. Four have indicated an interest in staying and seem to have the capacity to, with assistance, expand their business to fit in to the new La Marqueta concept. EHBCC will continue to meet with these tenants to establish more specifically how their needs will be addressed, and in some cases use EHBCC’s business training and small business loan services to assist them through these changes.

EHBCC is continuing to identify additional tenants that will create the “critical mass” needed for a complete market experience. These will include baked goods, spices, produce retailers, a butcher, candies and nuts, and assorted other food and specialty products.

Financing

The Project will cost approximately $20 million, a good portion of which must come in the form of low interest loans, grants, and tax credits.  Fortunately, East Harlem is eligible for a substantial menu of federal, state and local programs and incentives that make such public sector involvement feasible for the project’s development, and to ensure affordability for the businesses that will be situated within the Market.  The overlapping of these subsidies is critical to attract the private equity and conventional financing to the project.

The Upper Manhattan Empowerment Zone has indicated that it can provide both grants and below market rate loans to projects, such as La Marqueta Internacional, within the Zone’s geographic boundaries.  In addition, employers within the Zone (i.e., the businesses that occupy space within the Project) are also eligible for certain wage tax credits and accelerated depreciation that can improve the economic returns to businesses that hire local workers or make substantial tenant improvements in the project. 

While the East Harlem Empire Zone does not provide direct cash grants, it does provide loans and financial incentives for investors and employers in qualified projects, such as ours.  These benefits provide direct and quantifiable subsidies to qualified businesses and projects, which can significantly improve the return to an investor during the project’s early years, when net operating revenues are inadequate to conventional projects in untargeted areas.

The Empire State Development Corporation has commercial revitalization and other funds that would be ideally suited to this project.  We have discussions with ESDC and they have expressed interest in assisting with both pre-development and permanent financing. A proposal for a portion of the pre-development costs is currently under consideration.

Recently, EHBCC submitted a Federal grant application to the Department of Health and Human Services, Administration for Children and Families, Office of Community Economic Development for a $700,000 grant towards the development of La Marqueta. We were recently informed that our application has been funded.

Timeline

On December 18, 2003, EHBCC and the NYC Economic Development Corporation (EDC) executed an agreement that conditionally designated EHBCC as the developer for La Marqueta Internacional from 111^th to 119^th Streets. Since that date, EHBCC has actively proceeded along many critical fronts to further the project and achieve the required milestones to ultimately complete the City’s leasing protocol.

We have established a project construction strategy, focused first on the development of 111^th to 116^th Streets, and then expanding the market up to 119^th Street. The first phase (111^th to 116^th Streets) will have a combination of one to two anchor tenants, and an open mall, with a variety of smaller stores and kiosks to create a diverse and vibrant shopping environment.

We have schematically designed buildings that fit this model, opening the project to the community through the utilization of a transparent façade and new wider sidewalks adjacent to the market structures. Preliminary rents have been established that can be used as the basis for initial marketing and lease negotiations with prospective tenants, of which many have been identified, including two potential anchor tenants.

EHBCC has already begun the environmental review of the project necessary for the development to occur. We have been working with EDC and Department of Transportation (DOT) to review our plans and they have already agreed to the scope of work for the impacts we need to study. Given the above and our intention to meet all lease protocol requirements by the winter of 2004, we anticipate construction starting in 2005 and completion of the first phase by the summer of 2006.

La Marqueta Internacional will be a market for East Harlem and all the people of our City to enjoy.  It will also be another great destination point for tourists who come to enjoy the diversity and flavor of the many ethnic communities and neighborhoods that make New York the capital of the world.

Development Team Qualifications

East Harlem Business Capital Corporation, with its various designations, access to financing and, most recently, as a registered CDE (Community Development Enterprise) able to channel Federal New Market Tax Credits, has the mindset and the capability to make this project happen. In the past five years it has achieved Intermediary Lender status with the U.S. Small Business Association; been certified by the U.S. Treasury as a Community Development Financial Institution (CDFI); been designated by the Upper Manhattan Empowerment Zone as its East Harlem Community Partner; been designated as the NYS Empire Zone Administrator, and recently completed a first-time Boundary Expansion of East Harlem’s NYS Empire Zone. Since its inception in 1997, EHBCC has been on the forefront of economic development and revitalization in East Harlem.

The architectural firm of Cybul & Cybul has been retained for the La Marqueta project. Throughout the past 52 years, Cybul & Cybul has designed and implemented a diverse range of project types from a high tech car wash facility that was awarded the New Jersey A.I.A. silver medal for design excellence, to office buildings, office interiors, pier design, borough halls, retail specialty food stores, supermarkets, restaurants, food processing facilities to freezer/cooler warehousing, and multi-story high-rise apartment buildings. Cybul & Cybul has specific expertise in the design of retail wholesale food markets. Some of the more prominent projects include the new Fulton Fish Market, The Brooklyn Coop Meat Market, the renovation and addition to the NY City Produce Market and the Hunts Point Meat Market.

Urbitran is a planning firm headquartered in New York City with an outstanding record of experience in the fields of transportation, environmental planning, parking, and land use. Urbitran has completed a number of relevant transportation planning/traffic engineering studies in East Harlem, and can anticipate where issues may arise. Their knowledge of the area is gained through recent traffic impact studies for the Harlem Gateway, Gotham Plaza, Pathmark Shopping Center, and the proposed Harlem Auto Mall, as well as environmental services for the recent East Harlem Rezoning initiative, covering 57 blocks of the neighborhood.

ddm development and services is an experienced, locally based developer of mixed use, residential, school, community, hotel and retail and office projects in East Harlem, as well as other New York area communities. ddm is the development consultant to EHBCC, creating a financial strategy to market this project to investors, anchor tenants, and financial institutions.

Weil, Gotshal & Manges has agreed to represent East Harlem Business Capital Corporation in the development of La Marqueta. Weil, Gotshal & Manges LLP is one of the world's leading law firms, and has been recognized as having one of the nation's best litigation departments. The January 2004 issue of The American Lawyer, the nation's leading legal monthly publication, announced the results of a biennial review of the nation’s top law firms. Weil Gotshal was the only New York-based firm named to the list comprised of the top six litigation departments. As a premier firm in NYC, their participation on a pro-bono basis is a major asset to the La Marqueta project.