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From Our Magazine: An Overview of the Small Business Situation on the Lower East Side

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A version of this story appeared in the May 2015 issue of our print magazine. As you might have noticed, we’re about to begin a yearlong reporting project around Small Business Survival

Lourdes Salazar has owned Genesis Bridal Shop, a party-supply store at 97 Clinton St., for 22 years. After handing off management to her daughter last year, she was forced out of retirement to deal with a crisis threatening the family business. The landlord was raising the rent, and not just a little bit. The monthly payments were going up from $4,000 to $10,000, way beyond what Salazar could afford in an era of declining sales. Last month she began a frantic search for a new, smaller space in the neighborhood.

Her predicament is hardly unique. The casualties just in the past few years include much-loved places like Guss’ Pickles, the Pink Pony, Jeffrey’s Meat Market, G&S Sporting Goods, Motor City and the Living Room. Some of these businesses, of course, chose to close their doors or to move out of Manhattan. Others, like Rothstein’s Hardware and Daredevil Tattoo, relocated within the community. But even in a city defined by constant change, the retail churn has been breathtaking.

Many people are worried the current wave of change is fundamentally different. Today it’s not just quaint mom-and-pops that are withering but substantial independent companies designed to compete in the modern marketplace. What if rising real estate prices sweep away everything that makes our neighborhood distinctive, leaving generic corporate chains in their place?

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It’s a fear that has helped fuel #SaveNYC, a grassroots campaign started by blogger Jeremiah Moss. “Imagine a city filled with empty super-condos, money vaults in the sky,” he wrote in the Daily News. “Our streetscapes will be sleek windows on the dead space of bank branches and real-estate offices. There will be no more bookstores, no more theaters, no more places for live music. No more places to sit on a stool and drink a beer with regular folks.”

In our six years reporting news on the Lower East Side, there’s no issue that has touched a nerve like the demise of beloved small businesses. Yet in spite of the concern about the negative impact on our communities, solutions have been elusive. It is for this reason that The Lo-Down has decided to launch a year-long reporting initiative dedicated to sustained coverage of this important issue. We’ll explore the challenges businesses face as well as investigate potential solutions, and engage our neighborhood’s leaders every step of the way. It’s an unprecedented effort on our part to make sure this crucial topic receives the attention it deserves on the Lower East Side.

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97 Clinton St.

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Lourdes Salazar.

When it comes to small-business survival, no factor looms larger than spiraling commercial rents. Lourdes Salazar has to sell a lot of streamers and party hats at Genesis Bridal Shop to make $4,000, let alone $10,000 each month. But she  doesn’t blame her landlord, a small local property owner, for the increase. Speaking through a translator, Salazar told us she had been given a lengthy grace period after the lease expired last spring to come up with a plan. High property taxes forced the increase, she said. “The owner has a right to make money, too.”  In the past several weeks, Salazar has been working with two neighborhood groups—the Association of Latino Business Owners and Residents (ALBOR) and Good Old Lower East Side (GOLES)—to find a new space. The groups received a $30,000 grant from the city’s Department of Small Business Services to help revive Clinton Street. Just this week, Salazar announced it would be moving into a space at 309 East Houston St.

Many landlords, of course, are not so benevolent. In 2012, Silvershore Properties bought a six-story apartment building at 101 Delancey St. for $7 million and immediately began clearing out both residential and retail tenants. A bodega and independent clothing store were among those forced to close. Lease renewals were not offered at any price. Two years later, the storefronts remained vacant, yet the building was sold again for more than $17 million.

The former home of Bereket is primed for demolition.
The former home of Bereket is primed for demolition.

Elsewhere in the neighborhood, developers have emptied commercial buildings in preparation for new luxury projects. At 50 Clinton St., acclaimed restaurant wd-50, clothing stores Blake Scotland and Community 54, as well as a hair salon were among the victims. At the intersection of Orchard and East Houston streets, a looming 12-story tower displaced Turkish cheap-eats spot Bereket, among several other modest businesses.

Earlier this spring, Manhattan Borough President Gale Brewer came out with a series of ideas to help independent operators. “Small storefront businesses and vendors,” she said, “create jobs and add value, vibrancy, and diversity to our neighborhoods—New York would not be New York without them.”

Among her proposals is City Council legislation to mandate a mediation period between tenants and landlords for lease renewals. It differs from a bill known as the “Small Business Jobs Survival Act,” which is being championed by #SaveNYC. Versions of that legislation, which would go one step further by requiring arbitration, have been languishing in the council for years. [Recently we reported on the growing divide between #SaveNYC and Brewer over the different bills.]

The Real Estate Board of New York (REBNY) is seen as a major obstacle to the proposals. “The market is going to dictate whether or not a mom-and-pops [is] going to survive,” REBNY’s Steven Spinola told the Associated Press. “When we try to stop that from happening, we’re going to hurt the economy of New York.”

Guss' Pickles closed down in 2009.
Guss’ Pickles closed down in 2009.

In a recent interview on WNYC Radio, a key official in Mayor Bill de Blasio’s administration acknowledged the need to protect “funky” mom-and-pops from escalating rents. Alicia Glen, deputy mayor for housing and economic development, said, “We do not want to become a city that is bland and uniform.” While arguing that change can be healthy, Glen indicated that the administration would soon be coming out with some initiatives to help struggling businesses.

Other efforts are already under way. For the past several years, Community Board 3 has been talking about asking the city for a special zoning district—likely somewhere in the East Village—to potentially restrict stores with multiple locations or to limit large-scale stores. This year, the board’s economic development committee is stepping up its work on the proposal. City Council member Margaret Chin recently introduced legislation to establish a small- business advocate within city government to champion the interests of independent businesses. A recurring theme with shop and restaurant owners is their struggle to wade through mountains of regulatory red tape in city agencies. Chin says her proposal would give businesses the help they need to cut through the bureaucracy.

Other ideas have grown organically outside the halls of government. Made in the Lower East Side (miLES) is a start-up that works with property owners to utilize vacant retail spaces for new ventures. It’s not a long-term solution, but gives new businesses a shot at making their mark. A new proposal surfaced more recently. Local activists are floating the idea of a Real Estate Investment Cooperative, in which people would pool their money to purchase property and open space for the benefit of the community.

There are lots of angles to pursue in the year ahead, and we’re looking forward to digging into all of them. We also want to hear you ideas for small business survival. You can send us tips at: tips@thelodownny.com. And we hope you will consider joining our Small Business Survival Campaign.

 

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