Behind the $2bn+ development reinventing the Times Square billboard
The Times Square billboards that have bedazzled tourists and repelled New Yorkers for more than a century will soon be dwarfed by TSX Broadway – a $2.5bn development that aims to reinvent out-of-home branding. What does it mean for advertisers still looking to blast one of the busiest intersections on earth?
New York's Broadway vista will soon look very different. Work began on Friday (15 February) to demolish the Hilton DoubleTree tower that currently looms above the red Tkts steps on 47th Street. Once the hotel is brought down, local developer L&L will use a series of jacks to raise the 106-year-old Palace Theatre below from its foundations to sit above a new suite of retail units.
Then the tower will be rebuilt, this time with LED lights built into the 46-storey façade in order to allow advertising to cover the entire building. A digital billboard measuring 18,000 sq ft will wrap around the lower half of the building, which will also house a 4,000 sq ft stage suspended 30 feet over Times Square. It will serve as the only permanent outdoor stage in the area.
Together, the digital out-of-home screen, the 'full-building promotional platform', the retail space, the hotel and a new food and beverage hub make up the TSX Broadway – a collaborative project from the L&L Holding Company, Maefield Development and Fortress Investment Group. The development was first envisioned six years ago.
The funding round closed in December, having capitalized the full $780m from individuals and organizations not just intrigued by the out-of-home premise but “the future of technology”, according to L&L’s senior vice-president, David Orowitz. Goldman Sachs covered the $1bn construction loan.
Orowitz believes that Times Square, despite its problems, is one of the most important media sites in the world. His company estimates 80% of tourists to the city – 400,000 a day and 127 million annually – pay a visit to the midtown crossroads, which translates to more than 8bn social media impressions a year.
The problem, says Orowitz, is brands have struggled to engage this enraptured audience on an individual level in Times Square. Crowd control measures mean physical activations are limited in scope and heavily vetted by the Times Square Alliance and NYPD, while the open space – and the less than cuddly Elmo and Batman entertainers – teeters on the verge of what is considered ‘brand safe’.
He hopes the TSX Broadway development will change that by offering a “broader kind of media that goes well beyond physical location”.
Once the building is completed in 2021, Orowitz envisions brands will buy into the offer holistically. He envisions an entertainment company, for instance, staging a live performance on the stage and streaming it across the world while selling merchandise in an experiential retail unit downstairs and advertising up and down the entire building.
On a day where there isn’t a live performance, he imagines Times Square visitors holding their phones up to the stage and being able to watch a past show on their screens via augmented reality. He hopes companies that take out retail leases will fill the space not with “a bunch of racks and a register” but with immersive brand experiences.
“I don't think that our intention is to have a different partner in there every day, but I do think [they] will have to change the content constantly,” he says.
That’s not to say traditional retailers will be off L&L’s call sheet, but “it needs to be a company with a lot of creative vision that can really think about how you take all these elements and really benefit from them.”
For that reason, Orowitz believes “larger tech companies” with an interest in content and hardware will benefit most from the TSX offering when the group starts selling advertising and physical space (it is currently holding back any sort of sales drives until the development becomes more tangible because, the SVP explained, “until people can really see it, they can’t fully understand it”).
It's a sensible sector to go after, given that brands previously confined to the web are now selling in brick-and-mortar stores. Dot-com darlings Amazon, Caspar, Glossier and Away have all experimented in the physical, and many are now shunning pop-up experiments for permanent leases.
Real estate firm JLL has predicted digitally native brands will open 850 stores in the US across the next five years.
Orowtiz is clear it’s not up to L&L or any of the partnership to police brands in terms of how creatively they use the retail and billboard space. He is hopeful it will happen “organically” – yet has also hired former Droga5 chief, Andrew Essex, as a creative consultant.
“I'm hoping to see a brand essentially reinvent retail in the most trafficked location on the planet,” says Essex, who also runs ‘creative federation’ Plan A alongside Disney marketing vet MT Carney.
“Times Square is arguably the most visited tourist destination on the planet and not often an incredibly delightful experience. Brands can change that via this platform by creating something that brings people together, that reinvents the way we think about retail, that redefines the way we think about space, the way we think about entertainment, signage, streaming and real-time.”
“I'm supremely confident that brands will run with it. My dream is that the creative vision will exceed our expectations."