The owner of the Times Square building, where the New Year’s Eve Ball drops each December before tens of thousands of revellers, will invest $500mn in its renovation in another vote of confidence in a New York City neighbourhood trying to recover from the pandemic.

Jamestown, the real estate firm that redeveloped New York’s Chelsea Market, on Friday announced its plans for One Times Square, a former headquarters of the New York Times that it bought from Lehman Brothers in 1997.

Apart from its ground floor retail space, the building has for years been mostly vacant. It has worked instead as a lucrative advertising billboard in one of the most visible corners of the world, where Seventh Avenue, Broadway and 42nd Street intersect.

Jamestown began working on a redesign in 2017. Its latest plan will open the building to the public, offering museum-like exhibitions with immersive technology, and create a viewing deck looking on to the square below. The aim is to make the property a year-round attraction at the heart of what is the city’s most tourist-heavy neighbourhood.

Times Square was ravaged by the Covid-19 pandemic, which forced a shutdown of the Broadway theatres that are its mainstay and one of the city’s main draws for international tourists.

The shows have resumed, with 36 playing as of May 1 — albeit at lower attendance levels than before the pandemic. Hotel occupancy, which fell from about 90 per cent in 2019 to 50 per cent last year, according to the Times Square Alliance business group, has also rebounded. It is now hovering around 80 per cent.

The Jamestown investment adds to a swirl of activity in a glittery neighbourhood whose transformation in the 1990s — from seedy outpost to family-friendly tourist hub — was a hallmark of New York’s broader revival.

A Hard Rock International hotel joined Times Square earlier this month while developer L&L Holding and its partners are on track next year to open a $2.5bn tower with a luxury hotel, theatre and sprawling outdoor concert stage. The neighbourhood is also being seen as the location for one of three new casinos that the governor and mayor are hoping to approve this year.

“Times Square has served as the crossroads of the world for more than a century, and One Times Square is at the centre of that global stage,” said Michael Phillips, Jamestown’s president. “The building’s next chapter will build on that legacy, creating a new destination in the heart of Times Square for the next generation.”