NEW YORK — Ten years ago, a group of seven young art dealers opened galleries in former loading docks on a deserted cobblestone street, helping transform Manhattan’s Chelsea neighborhood into an art destination.
Now, only two of the galleries remain after the rest relocated or closed because of high rents. With leases expiring in November, both said they are likely to leave.
“It’s time to move to a new area and be part of a new story,” said Michael Gillespie, owner of Foxy Production, one of the two galleries. “Chelsea feels more blue-chip and less an area where you come to discover new artists.”
The U.S. contemporary art epicenter is in the middle of a transformation as small and medium-size galleries are being priced out of their expensive ground-floor spaces in Chelsea. As office towers and luxury homes rise up around the elevated public park the High Line, galleries are moving to neighborhoods including the Lower East Side and Chinatown.
Those that will be able to remain in Chelsea are high-end emporiums — Gagosian Gallery, Gladstone Gallery, David Zwirner — that own their buildings, brokers said. They learned a lesson from an earlier era: Art galleries began moving to Chelsea in the 1990s after Soho, which they had helped revitalize, became unaffordable.
“Just like in Soho, galleries are the victims of their own success,” said Stuart Siegel, senior vice president at real estate broker CBRE Group Inc. who specializes in Chelsea. “The galleries put Chelsea on the map. Then the world followed them.”
The Hudson Yards residential and commercial development rising on the district’s northern border will house Manhattan’s first Neiman Marcus department store in 2018.
Even Jeff Koons, the world’s most expensive living artist at auction, isn’t immune. He will leave his long-time studio in the next two years, according to Roy Bernstein, chairman of the board at Valeray Real Estate Co. that owns the property on the corner of West 29th Street and 11th Avenue. The company plans to construct a 30-story affordable rental building.
“We had offered them an opportunity to build something to their specifications on the same block, but that didn’t work out,” Bernstein said.
Koons declined to comment through a spokeswoman.
Carolyn Alexander, co-owner of Alexander and Bonin gallery, said the gallery is looking for a new home in the flower district or Tribeca because its landlord of 18 years decided to turn the building into a residential complex. Next door-neighbor Andrew Edlin Gallery, which specializes in artists without formal training, is leaving as well.
“It’s all real estate-driven,” said owner Andrew Edlin. “I love my space in Chelsea, but my space will be destroyed for luxury condos. I didn’t want to retreat to the upper floor in Chelsea.”
He’s moving into a 2,500-square-foot former restaurant- supply store on the Bowery, joining an expanding community of galleries anchored by the New Museum.
On Aug. 19, more than 100 people packed Edlin’s raw space for a performance by Brent Green as the artist’s animated short films were projected on an exposed brick wall.
There are 124 galleries on the Lower East Side, up from 63 in 2010, according to Katie Archer, director of programs and services at the Lower East Side Business Improvement District.
“If you are an emerging contemporary art gallery, the Lower East Side is the place to be,” said New York collector Peter Hort. “I go to Chelsea to see shows and support friends. I buy art downtown.”