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 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.
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.
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.
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.”
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.
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,…