Big firms rush after deals on reviving 42nd

With Walt Disney Co.'s imminent arrival on 42nd Street, some of the biggest names in the entertainment industry, including Time Warner Inc. and Universal Pictures, are scouting for deals in Times Square as landlords race to upgrade their properties in the suddenly hot district.

In the wake of Disney's bold plan to rehabilitate the landmark New Amsterdam Theater and transform it into a vibrant entertainment complex, blue-chip companies like the movie exhibition chain AMC Theaters Inc., Universal Pictures Inc., Polygram Holdings Inc. and the Warner Music Group have shown interest in the street, sources say.

That comes as the Virgin Retail Group confirmed that next spring it will open a three-level, 60,000-square-foot music superstore in Times Square, at 1540 Broadway. The company says it will be the world's largest music store and represent a $10 million investment in Times Square.

This surge of interest is fueling landlords on the western edge of 42nd Street, near Eighth Avenue, to upgrade their properties with the hope of gaining a windfall from the area's development or a higher price from the state when it condemns sites. Officials for the Urban Development Corp., apparently propelled by the momentum of the Disney deal, plan to move to condemn properties as early as this summer as a prelude to the next phase of 42nd Street's long--planned renaissance.

At that time, the UDC will also likely issue a request for proposals for a major hotel with significant retail space to replace the 11 adult-oriented shops at 42nd Street and Eighth Avenue. Eventually, the UDC plans to condemn the southeastern strip of 42nd Street and Eighth Avenue.

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