Dodging the Chains: In Search of a Local Marketplace on the LES

The cover of out July magazine. Cover montage by Mark A. Ward.

Editor’s note: Our July print magazine has hit the streets.  If you haven’t been able to pick up a copy (we’ll post a list of locations later today), here’s the online version of our cover story:

Mark Hernandez is not one to back away from a challenge. About a year and a half ago, he opened Berkli Parc, a casual cafe on the corner of Delancey and Allen streets, located diagonally from a Starbucks and across the street from a Subway sandwich shop. Hernandez, a local resident, concedes it’s a lot of competition for one intersection, but he’s not intimidated by the national chains that are his neighbors. Berkli Parc is holding its own, and customers are cheering Hernandez on. They tell him, “Hey, that’s awesome that you had the guts to do that, to open up right across from Starbucks.”

In recent months, as national chains continued their colonization of the East Village’s storefronts to the north, Lower East Side residents, business owners and community leaders have become wary of big corporate retailers beginning to turn their attention — and their cash registers — south of Houston Street.

7-11 had been looking at the the Grand Spa location at 403 Grand Street. Grand Spa has since closed its doors, after failing to pay rent to the Seward Park Co-op.

That watchfulness gave way to an all-out battle in the Seward Park Cooperative this spring, when shareholders rebelled against their board of directors, which was on the verge of signing leases with 7-Eleven and Dunkin’ Donuts for commercial spaces the co-op owns on Grand Street.

The residents launched an online petition drive against the chains, but did not stop there. They then rolled up their sleeves and went to work identifying and recruiting the sorts of businesses they wanted to see in those retail spaces. In so doing, they not only made a big impact at Seward Park, one of the largest residential complexes on the LES; they also might have modeled a way in which residents community-wide could play a more robust role in refashioning the Lower East Side’s retail landscape.

It’s not that there’s anything inherently evil about chain stores, said Auguste Olson, the co-op resident who launched the petition drive opposing 7-Eleven and Dunkin’ Donuts. Pretty much all of us, she acknowledged, have shopped in some kind of chain at one time or another, succumbing to the convenience and competitive prices they offer. “Those stores are usually owned (or at least operated) by real people and by families,” she said. Olson objects, however, to national chains that “prey on an area that has a small-business customer base, leeching off of independent stores and putting them out of business.”

Nearly 700 people signed the petition, citing many reasons for their opposition to these particular chains. One leader of the effort, Ella Leitner, said she was compelled to make a stand for more nutritious food options on the LES. In a letter to the principals at the nearby high schools, she wrote, “many of us local residents feel it is not responsible to add another two stores devoted almost exclusively to marketing extremely unhealthy products to our children.”

Dunkin’ Donuts on Delancey Street.

That’s not to say that everyone was happy to see the chains turned away. Plenty of local residents have spoken up in defense of 7-Eleven and Dunkin’ Donuts, and there’s a counter-petition circulating. Damien Acevedo, who was born in the Vladeck Houses and now lives at Gouverneur Gardens, said “they would have been great for the Lower East Side.” In his view, the stores could have offered safe, clean alternatives to the bodegas in the area. “Who wants to go to a bodega at 2, 3 in the morning?” he asked. As to the notion that chains threaten the LES’s legendary authenticity, Acevedo said, “the Lower East Side lost that years ago.”

Over the past year, Community Board 3 has been studying ways to diversify the neighborhood’s retail mix and to stave off chain store domination. Some communities are trying to restrict big national chains through new zoning ordinances. On the Upper West Side, for example, a new ordinance limits the width of storefronts on Amsterdam and Columbus avenues and Broadway, where bank branches and other large-scale retailers have taken over whole blocks. The City Council approved that measure just last week. In other cities, even more restrictive zoning prevents chains with more than 10 locations from opening up in certain areas.

Bob Zuckerman, executive director of the Lower East Side Business Improvement District, is not convinced “restrictive zoning” is the answer in this neighborhood, although he’d like to see how things go on the Upper West Side. “It might very well have unintended consequences,” he said. He noted that there are many kinds of chain stores. A lot of people may have an aversion to large national chains, but “what about local stores with multiple locations?” he asked, citing Sol Moscot, the legendary Orchard Street eyewear company, and The Meatball Shop, both of which were born on the Lower East Side and have expanded to other neighborhoods.

Mike Forrest, a Lower East Side property owner, opposes city restrictions. The realities landlords face are often glossed over during conversations about retail diversity, he said in a recent interview.

“People sometimes think of landlords as the big fat cat who’s some kind of anti-neighborhood killer,” he said. The truth, Forrest said, is that many property owners, after paying taxes and other fees, are barely breaking even on their buildings. Sometimes a chain is the only prospect for an empty retail space. Very rarely, he explained, does a landlord have the luxury of making a choice between an independent business and a chain.

Michael Tumminia agreed that landlords often don’t have the option of choosing “local” tenants over corporate ones. Tumminia, who served on the Seward Park Co-op board of directors during the debate this spring, said the co-op has struggled over the years to recruit businesses capable of paying their rent on time. 7-Eleven and Dunkin’ Donuts, he said, offered top dollar for long-term leases.

Meghan Joye, co-chair of the community board’s economic development committee, said most members of the panel are uneasy about using zoning to limit national chain stores. A better solution, she suggested, might be taking some inspiration from those Seward Park residents. A first step would be conducting a large-scale community survey to find out what types of stores people need and want. Market research, of course, is nothing new. But usually businesses, rather than residents, are the catalyst.

Zuckerman, of the BID, agrees that a “grassroots” approach to new retail recruitment might have some value. He said the BID’s board will be having conversations during the summer about whether it could help facilitate a community process. “We want to be able to help real estate brokers” in their search for retail tenants, he added.

A Subway Sandwich franchise at Grand and Ludlow streets.

At the same time, Zuckerman notes, the issue of chain stores should be kept in perspective. A November 2011 report from the Center for an Urban Future identified 37 national chain stores on the Lower East Side (ZIP code 10002). In comparison, there were 167 chain stores in the East Village (ZIP code 10003), one of the highest concentrations of chains anywhere in the city. So the blocks below Houston Street may not be teeming with national retailers, at least not yet. But the arrival of each new Subway, Papa John’s or Dunkin’ Donuts causes more anxiety among some residents. Even after 7-Eleven was rejected on Grand Street, neighbors began buzzing about another location of the Dallas-based convenience store opening in the former Loew’s Theater on Delancey Street.

Forrest doesn’t think the Lower East Side is going to be “eaten up by national chains.” For one thing, he said, they’re usually looking for locations with heavy foot traffic and large spaces, often in excess of 2,000 square feet. This explains why stores such as The Children’s Place and Sleepy’s have emerged on Delancey Street, but not on side streets lined with tenements and 300-square-foot storefronts, he said.

Others say it’s possible to overstate the chains’ negative impact on independent businesses. Stores and restaurants backed by corporate behemoths do not always prevail.

Shake Khokan, who took over the Subway sandwich location at Grand and Ludlow streets eight months ago, told us he’s struggling. Buying an existing franchise appealed to him because it offered a well-known brand and valuable corporate support. But Khokan said he faces stiff competition, especially from several other Subway restaurants within easy walking distance of his store. Interestingly, one of his independent competitors, Bill Frazer of Flowers Cafe one block away, said Subway had not impacted his business at all. “It’s a different clientele,” Frazer said. “If anything, my business is up in the past six months.”

At Berkli Parc, Mark Hernandez believes the indies have a fighting chance. “You’ve got to have a good idea,” and if people “like what you do, the community will sustain your business,” he said.

 

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