Gallery May Lead Arts Migration to Hudson Yards It seems to be one of the most unpromising locations a high-end contemporary art gallery in Manhattan could possibly wish for: directly across the street from a Dunkin" Donuts and a gas station, a block from the Nile Delta of traffic flowing into the Lincoln Tunnel, within sight of the 1980s mirror-ball exterior of the Jacob K. Javits Convention Center. But the other day dozens of construction workers filled a 22,000-square-foot ground-floor and basement space in a building at 10th Avenue and 36th Street, finishing a sleek renovation for the new home of the Sean Kelly Gallery, whose roster includes Marina Abramovic, Joseph Kosuth and Kehinde Wiley. Mr. Kelly, a big, gregarious dealer who started in modest quarters in SoHo, spent 12 years in a larger space in Chelsea and is more than tripling the size of his gallery, looked out the windows at his new neighbors and said he loved them. "How can you go wrong with a Dunkin" Donuts across the street?" he said. He predicted that many other Chelsea gallery owners might soon agree. Mr. Kelly is a pioneer in what could be thought of in a few years, at least in the art world, as Chelsea North, a collection mostly of low-rise buildings, garages and parking lots otherwise known as the Hudson Yards neighborhood and part of what was known for many years before that as Hell's Kitchen. The neighborhood, from 28th to 43rd Street west of Eighth Avenue, is undergoing the biggest city-planned redevelopment of any area in the city, with an extension of the No. 7 subway to 34th Street and 11th Avenue expected to be done in 2014, the final stage of the High Line reaching 34th Street scheduled to open the same year and tens of millions in commercial and residential construction money pouring in. Mr. Kelly's new gallery, in a massive 1914 terra cotta building, took over space previously occupied by Exit Art, the alternative art organization that had been there for a decade before closing this year. But during its years in the neighborhood, Exit Art was an outlier. Now, with large Chelsea spaces growing rarer and rents for ground-floor space climbing to $100 or more per square foot, many real estate and art specialists predict galleries will begin to push just north to what brokers called the only collection of sizable warehouselike spaces left in Manhattan. And the properties are still relatively affordable. "There just aren't a lot of choices out there left for people who want 6- or 8,000 square feet of exhibition space," said Stuart Siegel, a brokerage executive who specializes in Chelsea and arts clients with Matthew Bergey at CBRE, a real estate firm. Mr. Bergey added: "You can be on the ground floor in the West 40s for less than being on an upper floor somewhere in the West 20s." The two brokers, who were not involved in the Kelly gallery's move, said they were working with a handful of prominent galleries looking at space in the Hudson Yards area for roughly half the rent of prime Chelsea spaces. Mr. Kelly said part of what attracted him to the area was the urban Wild West character it retains, with billboards towering overhead and truck traffic roaring. "Chelsea has become pretty anodyne, in a way," he said. But he said he also had practical reasons for moving north. Even before the opening of the No. 7 extension, the neighborhood has closer subway access than Chelsea. It is within walking distance of dozens of good hotels and restaurants. And, under the city's Hudson Yards development plan, a narrow park will be built from 33rd Street to 42nd Street between 10th and 11th Avenues. The plan also calls for a mixed-use visual-art and performance space, which is being called the Culture Shed, to be built on 30th Street. The neighborhood has a cultural anchor, the Baryshnikov Arts Center, a theater and performance hub that opened in 2005 on 37th Street between 9th and 10th Avenues. "I just think this neighborhood is going to be a no-brainer for cultural businesses in three to five years," Mr. Kelly said, in a soaring, 6,000-square foot main exhibition space, once a printing floor, where an inaugural show by Antony Gormley will open Oct. 27. The architect Toshiko Mori, who is designing Mr. Kelly's space and glass canopies for the entrances to the new No. 7 train station, said the neighborhood held promise for galleries not only because of its large industrial buildings but because it was one of the last places in Manhattan that felt undefined. "Art always emerges in what you call urban blind spots, the places that people don't focus on, places that don't have much of an identity," Ms. Mori said. Because of the building mix, the neighborhood will never have the monolithic gallery character of Chelsea. "Galleries are going to have competition from Duane Reade and CVS and Whole Foods," Mr. Bergey said. But the area could come to feel like other low-density gallery clusters in places like London and Mexico City. "The herd mentality in the art world is much more prevalent right now in New York than in almost any other city I know," Mr. Kelly said. But I think that it's eventually going to change. If it doesn't, I'll be very happy here by myself. If it does, the more the merrier. An earlier version of this article misstated the date of a terra cotta building at 10th Avenue and 36th Street that is the new home of the Sean Kelly Gallery. The building was completed in 1914, not in 1916.