Empty Times Square Building Generates $23 Million a Year From Digital Ads

dryriver writes "Advertising things at the right place is proving to be a cash cow, as electronic ads earn about $23mn each year for an empty building at One Times Square – the iconic tourist destination in the New York City. A 25-story Manhattan office building that has long been empty keeps on bringing in millions to its owner as a billboard. Michael Phillips, CEO of Atlanta-based Jamestown Properties, bought One Times Square through a fund in 1997 for $117 million, as the Wall Street Journal reports. More than 100mn pedestrians pass through the square each year, which is 90% more than 16 years ago, says the Times Square Alliance, a non-profit business improvement organization. And this is what makes a price tag for having a company's name placed on the building the highest in the world, even above such crowded tourist destinations as Piccadilly Circus in London. Dunkin' Brands Group Inc. pays $3.6mn a year for a Dunkin' Donuts digital sign on the One Times Square building, with Anheuser-Busch InBev paying another $3.4mn a year for its advertisement. Sony and News America pay $4mn a year for a shared sign."

Comments

Profit

[webmistressrachel]

If he's making a profit anyway, why not rent or give the space to local community groups / organisations?

Re:Profit

[PPH]

Strip clubs, peep shows. Return Times Square to the greatness that it once was.

Re:Profit

[Anonymous Coward]

People making 23 million a year for doing nothing at all do not share.

And that's one of many reasons why we deserve the world we have.

Re:Profit

[beamdriver]

The building would need extensive renovation for it to be suitable for use.

Chief among these would be the addition of central air conditioning, but I would assume that a building that old would also need a good deal of electrical and structural work, asbestos removal, etc.

At this time, the ads bring in more revenue than rent would, so there's no reason to invest the money.

Re:Profit

[Anonymous Coward]

Paying taxes, maintaining the building, managing building permits, and maintaining the signage... doesn't sound like 'nothing at all' to me.

Nor does it look like 'nothing at all'; doing no work would very quickly lead to a hazardous dilapidated shell.

Ever consider he may not have tenants because no one would want to have 1,000,000 watts of light pouring into their office each and every day?

Re:Profit

[SJHillman]

Just like the President and Congress do not, personally, do most of the things they're credited with. The millions of blue collar workers are the ones who end up doing it. However, there's something to be said for the guy(s) on top who put it all into motion and maintain it at the highest levels.

Re:Profit

[johnny cashed]

Ever consider he may not have tenants because no one would want to have 1,000,000 watts of light pouring into their office each and every day?

Cannabis grow room?

Re:Profit

[MickyTheIdiot]

But the meme in the U.S. right now is that all the little guys don't do anything and basically don't even deserve enough money to live.

I don't think there has been a time in U.S. history where people in the U.S. have believed the guy in the top shouldn't be paid the best, but right now as a country we seem to be believing the grunts aren't responsible for the success of these groups at all. At least that is what the CEOs are, as a class, believing. As a result many are saying that these people don't even believe a decent wage or deserve to share in the success of the companies they work for.

And there are plenty of people... people that hang on every word of the CEOs like they're super human, that are willing to believe it. Slashdot seems to get more of the CEO worshipers every day and are happy with the idea that corporations should be able to screw over anyone they choose as long as there is a "benefit to the shareholders."

And this article highlights another one... it's fine for a building to sit empty as long as some corporate entity is making money. The US has about 3 times the number of houses available then there are homeless people and many of those houses were obtained by the banks by nefarious means... but since a corporation benefits no one does anything.

We've got problems with morals in the U.S... but not the moral problems we constantly hear about.

Re:Profit

[icebike]

If he's making a profit anyway, why not rent or give the space to local community groups / organisations?

Maybe it is in need of significant upgrades given its age, an the insurance alone might make it unprofitable to rent or donate space to community groups.
Besides, its not the best place for such groups, their constituents don't live there.

Still, the story may not be totally true, as Google Streetview shows lights on in on the 8th floor and Chase bank still appears to have a branch on the ground floor.

Re:Profit

[queequeg1]

What exceptions are you referring to? I can see why a landlord might not want to rent if the marginal operating costs (janitors, maintenance, tenant improvements, security, etc.) exceed the rents. But I'm not sure what tax benefits are realized by letting the building sit vacant if there are tenants who will pay rents that exceed marginal operating expenses. I can't imagine that there are any property tax benefits, and income tax is applied only on actual income. The landlord can claim depreciation on its returns regardless of occupancy. I'm genuinely curious. Does NY have some sort tax on gross revenues (like Washington's business and occupation tax)?

Re:Profit

[icebike]

Sitting on his money? You know this How?
Nothing in the story indicates what he is spending his personal money on. For all you know he funds orphanages in East Timor.

But its easy to make accusations on the internet isn't it?

Re:Profit

[otterpop81]

But the meme in the U.S. right now is that all the little guys don't do anything and basically don't even deserve enough money to live.

_The_ meme. Interesting take on a country that just re-elected the most income-distributing president of all time. We know he didn't win on his economic record. He won on the same kind of class warfare talk that you're giving right now.

right now as a country we seem to be believing the grunts aren't responsible for the success of these groups at all. At least that is what the CEOs are, as a class, believing. As a result many are saying that these people don't even believe a decent wage or deserve to share in the success of the companies they work for.

How much is a "decent wage?" I hear people all the time talk about a "living wage" on here, but nobody puts a dollar figure on it. Give me something concrete. What should the high-school drop-out ditch digger (or whatever) who has learned no marketable skills make? What kinds of things should someone making a "living" wage be able to buy? What things are over the line? For example, how new a car, what kinds of food, cell phones, cable TV, how big of house or apartment? Should this "living wage" increase because people live in a certain area, or should we pay them more because they have a bunch of kids? I want to know what a "living wage" really means.

Also, how much more should a person with a degree make than this base "living wage." I mean a real degree which enables someone to produce something of value. I'm talking about engineering, or science, or something medical (and there are plenty of others), not philosophy or communications or something that qualifies you to be a barista.

And there are plenty of people... people that hang on every word of the CEOs like they're super human, that are willing to believe it. Slashdot seems to get more of the CEO worshipers every day and are happy with the idea that corporations should be able to screw over anyone they choose as long as there is a "benefit to the shareholders."

Like the people here who worship Steve Jobs? I don't get CEO worship either, but I bet if you polled nationally, you'd find that most people _don't_ worship large corporation CEOs either. That said, I don't know what these people (most of them) do that commands the kind of money they make. No doubt many of them are _way_ overpaid, but I also bet you and I both have a lot to learn about what makes a large corporation tick.

And this article highlights another one... it's fine for a building to sit empty as long as some corporate entity is making money.

Who should be the one making it not-fine? Maybe you don't like it, but are you suggesting that there should be law that if you own a building that you should have to bring it up to modern code and rent out space? Do you have any idea what the condition of that particular building is? (I don't). Should there then be law about how much he should rent the space out for? What's your master plan for this? Don't just spout off about how evil it is that he makes a profit. Tell us what he should do, and tell us what you think the role of government is in this situation, especially with respect to private property rights.

The US has about 3 times the number of houses available then there are homeless people and many of those houses were obtained by the banks by nefarious means... but since a corporation benefits no one does anything.

Think so? I'm going to call for citation on that one. Again, what's your end-game proposal here? Should the government force the banks to let homeless people live in bank-owned houses? What's the government's role in this?

I can tell you care deeply about the homeless. How many have you taken into your home to live with you? Should the government force you to take in homeless? So I guess it's fine for a room in your home to sit empty (or "spare") while

Re:Profit

[dreamchaser]

He owns it. He presumably is paying his property taxes on it. Who are you, or who is anyone for that matter, to say what he should do with it? Unless of course you don't believe in private property ownership.

Re:Profit

[mooingyak]

Ever consider he may not have tenants because no one would want to have 1,000,000 watts of light pouring into their office each and every day?

If he wants to rent the space, he'll find takers without much trouble. Also, as someone whose workspace is in Times Square facing said billboards, it's much better to be in the building with the ads on it than the building that faces the ads.

Re:Profit

[mooingyak]

I understood that to mean he's pissing away his corporation's money. As in, letting a building in one of the highest rent markets in the country lay unused. There's no way that building makes more money empty than it does with tenants.

Re:Profit

[pollarda]

This is New York City where if you rent or lease space, you are automatically the bad guy. Why rent or lease and incur the liability?

Re:Profit

[Seumas]

I don't know why you were modded "funny". You're spot on. Times Square and Vegas were fantastic before they were nerfed and Disneyfied for boomers and their stupid kids.

Re:Profit

[mooingyak]

When I'm at work, I look out the window at that building. I'm familiar with it's dimensions and location.

You'd rent it as an office space, not a residential space. No one cares that it doesn't have parking. The decision makers will take the corner slots with a view and not give a damn that everyone else doesn't have a view (or, given that those lights are irritatingly distracting, maybe the reverse)

You might not get as much as a larger building, but I have no doubt you could make enough to be worth doing.

Re:Profit

[Son of Byrne]

Don't know why you've been modded a troll, but I think that your comment cuts to the quick of the aforementioned hollow argument.

In real estate, there is a concept known as highest and best use of property. That concept works exactly the way that it sounds and is one of the tools that an appraiser uses when trying to determine the value of a property. In this case, the building may serve its highest and best use as a billboard and not as office space/hotel/whatever. Who cares that the building sits empty? It most likely is not heated, not plumbed, and may not even have any interior walls/flooring/etc.

Further, I don't think that asking someone to justify their ridiculous statements (without even using the term "ridiculous statements") qualifies as trolling. If it did, then count Socrates as one of the first trolls.

Re:Profit

[pyro_peter_911]

I think you're unfairly moderated as Troll here, so I'll reply and have you bumped up to insightful in just a few moments... :)

How much is a "decent wage?" I hear people all the time talk about a "living wage" on here, but nobody puts a dollar figure on it. Give me something concrete. What should the high-school drop-out ditch digger (or whatever) who has learned no marketable skills make? What kinds of things should someone making a "living" wage be able to buy? What things are over the line? For example, how new a car, what kinds of food, cell phones, cable TV, how big of house or apartment? Should this "living wage" increase because people live in a certain area, or should we pay them more because they have a bunch of kids? I want to know what a "living wage" really means.
Also, how much more should a person with a degree make than this base "living wage." I mean a real degree which enables someone to produce something of value. I'm talking about engineering, or science, or something medical (and there are plenty of others), not philosophy or communications or something that qualifies you to be a barista.

Here's how I've always attempted to communicate this idea that you're sharing.
When you impose a minimum wage there are, almost by definition, jobs that are no longer worth hiring someone to do.
Is it worth $8/hr for a gym to hire a kid to wipe sweat off the equipment in the afternoons? Probably not. Wipe your own sweat.
Is it worth $8/hr for the mechanic to figure out why your BMW's heated cupholder isn't working? Probably so. The shop is going to bill $150/hr for the repair, so the mechanic has plenty of room between $8/hr and $150/hr to carve out a reasonable salary, while the owner still gets paid too.

Now, to run the "decent wage" and minimum wage ideas to their absurd extreme. If a $0 minimum wage is bad, and a $10 minimum wage is little better, why not make the minimum wage $10,000/hr! We'll All Be Rich! I'll have two new cars by lunchtime! Obviously, "We'll all be rich!" is the wrong answer. We'll all be criminals and working for whatever we're worth is the correct answer. If you insist on being law abiding, you'll be unemployed. No one on /. is worth $10K/hr (I'm sorry if this is a shock to some). Obviously, $10K/hr minimum is extreme, but the effects of raising the minimum wage to a "living wage" of $20/hr would be similar. Now everyone is getting paid at least $40K/year for their full time jobs. Great! But your Papa John's pizza is going to go up by a bit more than $0.15 to make it worth selling crappy pizzas.

You've just cut the bottom four rungs off of the economic ladder. It is no longer possible to go from sweeping the floors at the auto shop, to doing oil changes, to changing brakes, to being a highly skilled mechanic working on high end cars. The only job in that chain that is worth hiring an employee for is the last one. Everyone below that point gets the shaft and becomes a criminal.

The simple fact is that minimum wage laws hurt the very ones they are supposed to be helping, either by eliminating their jobs or by forcing them into "under the table" working arrangements where they can be paid what they are worth.

Peter

Re:Profit

[nbauman]

Manhattan has actually been coming out of a weak real estate market. I live around the Times Square neighborhood. Several real estate construction projects were cancelled. There are empty stores. It's counter-intuitive, since the price of Manhattan real estate seemed infinite, but that's why we get real estate bubbles that finally burst.

For example, Mayor Bloomberg sold the Donnell library to a hotel company, but the market crashed so it is now a gutted building on 53rd St. between 5th and 6th Ave., one of the most expensive locations in the world.

There are stores in the neighborhood that have closed, and left vacant instead of being rented (even in the Christmas sales season).

Some buildings just stay vacant for reasons that I can't understand. For example, there is 400 W. 57th St., on the SW corner of 9th Ave., which is owned by a Korean investment syndicate, that has remained vacant for maybe 15 years. There was an article in the New York Times about how it was a prime location (3 blocks from Carnegie Hall, and 4 blocks from Lincoln Center) and how they were planning to do something with it, but last time I walked by it was still empty.

Sometimes a real estate company will have vacant property, so they'll throw up a cheap store just do something with it rather than let it sit vacant. I think a lot of the 99-cent stores are set up like that. Some of these stores, like the restaurants and tacky shops, have the landlord as a partner. They're waiting for the real estate market to come back, and then they'll tear down the block and build a new building.

It's strange to think that a building like the one on Times Square could have signs on the outside, but nobody exploiting the inside in eternally-hustling Manhattan. But it happens.

Here's another one: I was living in another building around that area. My super asked me to help him do something in the back yard. He took me through a non-public door, and into a big back yard, that nobody in the building was allowed to use. There was a line of buildings down the north and south street, with a string of back yards between them, and nobody was using the back yards. It was like a collection of secret gardens. There are lots of streets like that in Manhattan, with closed-off back yards, even though space is so precious.

Re:Profit

[SydShamino]

The flaw in your logic is that most of the jobs created at the sub-minimum wage level (in the absence of such a wage) wouldn't go to a 13-year-old making money to buy candy. They would go to people working five jobs trying to scrape by a living. Instead, with a minimum wage, those people scrape by a living while working only three jobs, thereby providing them a small amount of time at rest.

Also, minimum wage establishes a base line for education. As you point out, certain jobs are no longer worth hiring someone to do them. Those jobs by their wage point had little to no education requirement. Okay, so there are no longer jobs for people who chose to drop out of school in ninth grade and refuse to learn a trade. You know what? That's a fair trade to me. If those people have a development disability that prevents them for learning a skill, then we have a social safety net to help them.

Finally the $10,000/hr statement is just absurd right now, because that price point would eliminate all jobs except those requiring skill as a Fortune 500 CEO. Now, if we were a country with 501 citizens and 500 CEO jobs to fill? Then sure, it would be perfectly viable.

Re:Profit

[shutdown -p now]

Interesting take on a country that just re-elected the most income-distributing president of all time.

What, did they dig FDR and re-elect him?

Tax rates are a record low in the past two decades, and Obama has so far done little to change that.

We know he didn't win on his economic record. He won on the same kind of class warfare talk that you're giving right now.

No, he won on the "I'm not those guys" record. By which I mean that he's not a loony who spouts bullshit about how raped women don't conceive unless they "really wanted it" and so don't need abortions, or how gays are icky abominations that should be glad to not be in jail and just shut up about that whole marriage thing, or how Hispanics are a "culture of losers". This election wasn't really a victory for Obama - it was a loss for the bigots on extreme social conservative right. Good riddance, too. Next time try running some guy who actually focuses on the economy. Having a fiscal plan which does not involve money conjured from thin air to balance the budget helps there (or, at least, don't claim that it'll balance!).

How much is a "decent wage?" I hear people all the time talk about a "living wage" on here, but nobody puts a dollar figure on it. Give me something concrete. What should the high-school drop-out ditch digger (or whatever) who has learned no marketable skills make? What kinds of things should someone making a "living" wage be able to buy? What things are over the line? For example, how new a car, what kinds of food, cell phones, cable TV, how big of house or apartment? Should this "living wage" increase because people live in a certain area, or should we pay them more because they have a bunch of kids? I want to know what a "living wage" really means.

A "decent wage" should not be lower than some reasonable factor relative to the highest wage in the company (note, I'm talking wages here, not dividends). "Reasonable" in this case is debatable and varies depending on who you ask, but vast majority of us agree that the 200x-500x rates that we see today are unreasonable. Personally, I think anything beyond 20x is unhealthy.

Please describe your moral code with respect to who should be giving what to whom in what situations, and who should be allowed to be on the receiving end.

Muslims has this nice term, "fard al-kifaya". This is a duty which is imposed on community as a whole - in other words, it is fulfilled when there are enough people that make it happen by whatever means necessary (and moral), and there is no personal individual obligation for every member of said community to participate. But if it is not fulfilled, then everyone should do what they reasonably can to contribute.

Same reasoning would seem to apply here - Americans as a society are certainly wealthy enough to eradicate poverty and homelessness, and it is therefore morally binding on them to do so. If, as fiscal conservatives and libertarians keep telling us, this is something that can be achieved entirely through private charity, then that's absolutely fine and government needs not be involved, but so far it hasn't happened.

Re:Profit

[MaskedSlacker]

Further, I don't think that asking someone to justify their ridiculous statements (without even using the term "ridiculous statements") qualifies as trolling. If it did, then count Socrates as one of the first trolls.

Why do you think they executed him? He was just so committed to the troll that he went along with it for the lulz.

Re:Profit

[Rockoon]

Tax rates are a record low in the past two decades, and Obama has so far done little to change that.

..a nice factoid that is being misused here, since it doesnt tell us anything about the (lack of) redistribution that you are trying to use it for.

I don't have figures in front of me for exactly the last 2 decades.. the numbers I have right now are for 1979 to 2009 (XLS spreadsheet), so I am using 1979 to 2009:

The lowest quintiles share of the federal tax liability was 2.1% in 1979 :: 0.3% in 2009.
The second quintiles share of the federal tax liability was 7.4% in 1979 :: 3.8% in 2009.
The middle quintiles share of the federal tax liability was 13.6% in 1979 :: 9.4% in 2009.
The fourth quintiles share of the federal tax liability was 21.6% in 1979 :: 18.3% in 2009.
The highest quintiles share of the federal tax liability was 55.3% in 1979 :: 67.9% in 2009.

I'm no genius, but it looks to me like everyone is paying less of a share than they used to for their government except for the top 20%, and before you go there, the top 1% went from a 14.2% share of the liability to a 22.3% share of the liability.

People wanted a progressive tax system, and they got it in spades.

Now we have a president that wants to raise taxes "on the rich" because they arent paying "their fair share", and in light of the evidence that "the rich" already pay most of the taxes, its hard not to conclude that this is pure class warfare unless you don't actually know the evidence.

These numbers I give arent from some right wing blog, and they arent from fox news. They come verbatim from the Congressional Budget Office. I didnt "adjust" them, nor am I misrepresenting what the figures are actually of.

I also didn't cherry pick, as is evident because I did not use the individual income tax data (which excludes among other things the social insurance taxes) which puts that bottom quintile at -6.6% (yes, NEGATIVE 6.6%) and the top quintile at 94.1% (yes, 19 out of 20 dollars in income tax is paid by the top 20%)

Your turn. Please argue that Obama is not trying to redistribute the wealth, but do so by using actual data instead of supposition and innuendo, and neither "adjust" nor cherry pick the data. Can you do that, or are you just a bunch of opinion?

Re:Profit

[hattig]

Is it worth $8/hr for a gym to hire a kid to wipe sweat off the equipment in the afternoons? Probably not. Wipe your own sweat.

This is why many minimum wage implementations have different minimum wage values depending upon the age of the worker - allowing a business to hire that "sweat wiper and general gym dogsbody".

For example, the UK (https://www.gov.uk/national-minimum-wage-rates):
Age 21+ : £6.19/hr ($9.96/hr)
18 - 20: £4.98/hr
http://www.livingwage.org.uk/about-living-wage
The London Living Wage is currently £8.55 per hour. The link above shows that it is good for the employees and the employers, that the minimum wage laws benefit those they are supposed to be helping because lots of jobs are necessary but underappreciated.
Before the minimum wage was introduced in the UK lots of people were saying the exact same things you are saying. You don't hear squat from them anymore, because they were wrong.

mn?

[mahju]

Is it just me or when did "mn" surpass "m" for million? "100mn pedestrians" looks like it should be a measurement in milli-newtons per pedestrians - I'm sure the imperial equivalent is slugs per servants.

Perfect Spot

[DanielRavenNest]

...for an evil genius to set up his lair. Who would ever suspect an empty building at the busiest intersection in the world?

Re:Empty 23 story building

[halivar]

How many spare rooms in your own house do you really need? One room, one person's life changed. Hop to.

hilarious

[slashmydots]

He's not making money off the advertising, he's making money off the stupid companies not realizing that there's no way in hell it has an ROI above 1. 3.4 million at Dunkin Donuts' profit margin? That billboard would have to convince something like 1 in 10 people that sees it to go buy a coffee from them to make up its cost. This is right up there with GE realizing after many years that its Facebook ad campaign to the tune of $43 mil didn't have an ROI above 1.

Re:hilarious

[icebike]

That billboard would have to convince something like 1 in 10 people that sees it to go buy a coffee from them to make up its cost.

Nonsense. One in 1000 would make it profitable, and one in 100 would make it very profitable.

Re:hilarious

[rgbrenner]

Ok, let's use your number. 39 million people per year. That's 100,000 per day.

Dunkin donuts pays 3.6m per year. That's just under $10,000/day

That's $0.10 per person. 1 in 10, would make that $1 per customer acquired.

You really think a Dunkin Donuts customer is worth $1? They're going to buy 1 cup of their cheapest coffee, and then NEVER visit the place again their lives.

That's one of the dumbest assumptions I've ever heard.

Dunkin Donuts knows how much each of those customers are worth. It sure as hell isn't $1.

Re:The Curse of the Network Effect Goes Times Squa

[samkass]

The Curse of the Network Effect is obvious enough in real estate that there is an entire school of political economy geared toward a single tax on land value -- a school most identified with the 19th century political economics author, Henry George.

Again, the real solution is to stop taxing economic activity (capital gains, income, sales, value added, etc) and instead tax market-assessed liquid value of assets.

And, again, of course, not many people are going to really understand this idea so it must be demonstrated by those who do get it.

That's why we need Sortocracy.

The proposal you link to essentially removes all control anyone has over their own property. Everyone is, in effect, required to sell any property at any time to the highest bidder. That may be economically efficient, but it sucks on a day-to-day basis for real people. It's the "infinite frictionless plane" type of economist thought problem, not an actual solution to anything. The law would last about as long as it would take for grandma to be kicked out of her house.

Re:Mn

[Existential Wombat]

a manoneter

Building is decades obsolete

[kriston]

The One Times Square building is decades obsolete for an office building. However, as a mounting point for the multimedia signs, it is very functional. The empty floors provide power and space for the equipment required to run the signs and the massive equipment required to cool the equipment that runs the signs.

Plus, it's at the crossroads of the world.

Re:Datacenter candidate?

[Animats]

With NASDAQ next door, there has to be gobs of fiber running along Times Square.

NASDAQ isn't there at all. The NASDAQ put that sign in years ago to give them a visible presence in New York. NASDAQ corporate HQ is downtown at 165 Broadway. The signage is strictly for PR purposes.

Operationally, NASDAQ is distributed. The data centers aren't in New York. Neither are those of the NYSE; the main one is in New Jersey, but there's a backup elsewhere.

After Hurricane Sandy, the NYSE and the NASDAQ closed for two days. But not because they couldn't operate. The NYSE operations people wanted to transfer operational control to the NYSE Arca offices in Chicago and come back up the next day for online trading. The floor traders and the Wall Street financial community screamed. They were terrified of the financial system running without them. Especially if it worked just fine.