Small Business Survival: Clinton Street in a Constant State of Transition

This is the latest installment of our special series on Small Business Survival.

In 2002, the New York Times called Dewey Dufresne the “unofficial professor” of Clinton Street. Over the years, he’s not just been a dispassionate observer, but also a catalyst for the changes that have washed over the three blocks between East Houston Street and Delancey Street.

So when we decided to take a look at the state of small business on this struggling commercial strip, Dufresne (who you might know better as “Wylie’s dad”), was our first call. In 1999, Dewey and several partners opened 71 Clinton Fresh Food, a restaurant that blazed a trail for fine dining on the Lower East Side and established his son as a world-famous culinary innovator. A lot has changed on Clinton Street in the past 17 years, yet much has remained the same. Years ago, says Dufresne, “I saw a mixed community. There was something for everyone. Today, everyone is here, many are barely getting by and they’re all just trying to find a niche.”

Many of the challenges facing the neighborhood’s independent businesses — high rents, a dwindling customer base, maddening city regulations — are plainly evident on Clinton Street. We walked the block with Dufresene, stopping to talk with restaurant and shop owners along the way. They spoke both of the promise and of the shortcomings of a business corridor that always seems to be in transition.

Last summer, community activists counted about 20 vacant spaces in the three block stretch below Houston Street. In recent months, though, the empty storefronts have been filling up with fresh-faced entrepreneurs ready to make their mark.

Inside Galeria, a combo art space-restaurant at 43 Clinton St, Jairo Barros is full of creative energy. Always a “West Side guy,” he was looking to expand beyond Organika, an Italian spot he co-owned on 7th Avenue South. After many months of searching, he finally found a home for a new creative concept, and soft-opened a few weeks ago.  Barros believes the block is a hidden gem. “Clinton Street is an underrated street in New York City,” he said. “You have some of the best people doing the best things right here.” He loves the diversity and neighborly feel of the local community — qualities that other parts of the city lost years ago. “I didn’t think I could ever feel that again in New York,” Barros explained. “It’s happening and it’s 10 times stronger than it ever has been for me.”

Next we stopped in to see Michael Reynolds, co-owner of Black Crescent, the cocktail and oyster bar in the old Alias space at 76 Clinton St. The events of this past year have definitely tested his optimism. After a fire in January of last year, he and partner Carlos Baz were forced to jump through many bureaucratic hoops by the Department of Buildings. When we visited, they had just gotten the okay to turn gas service back on, clearing the path for a long-awaited reopening. Black Crescent will finally be back in business this coming Sunday (we’ll have more from Reynolds in a future story). As we continued down the block, Dufresne said he can definitely relate to his neighbors’ predicament.

It was in the spring of last year that the food blogs first began salivating about BYGGYZ, an avant garde sandwich shop Dufresne planned to create at 37 Clinton St. An opening was anticipated in a matter of weeks. But those weeks turned into months as complications arose over many old Buildings Department violations remaining from John’s Deli & Grocery, the previous business at this location. Now, finally on the verge of resolving those issues, Dufresne is just about ready to resume renovations.  He’s looking forward to a fresh start after a difficult couple of years on the old block.

In November of 2014, Wylie Dufresne was forced to shutter WD-50, his acclaimed temple of molecular gastronomy at 50 Clinton St. The restaurant still had some time left on its lease inside a modest single story commercial building. Dewey Dufresne designed the space himself. But the new property owner, Icon Realty Management, was determined to move WD-50 and several other small businesses out in preparation for a luxury makeover.  As the final dinners were being served, news broke that Icon had flipped the property, selling the development site to another firm for $28 million. Today, a seven-story building is rising on the lot, featuring 37 high-end condos (prices range from $1-3 million).

The construction has only added to Clinton Street’s woes. As we stepped inside the Little Shoe Shop, a storefront located just to the north of the plywood and cranes, owner Syndey Pringle confirmed rumors that she’d decided to call it quits. What little foot traffic existed on the block in the past disappeared after the sidewalk barricades arrived. After closing at the end of March, she’s moving to a farm far away from New York City and turning to an internet-only business model.

When Dufresne arrived on the scene two decades ago, Clinton Street had a different feel. It was a haven for drug dealers, but at the same time, the retail was more vibrant. There were many more stores and restaurants set up to serve the local community. Today, only a few remain. There’s Cibao (the longtime Dominican diner), Santo Domingo Bakery and a few old school barber shops and hair salons. In recent years, new businesses have opened and closed in rapid succession. Clinton Street Baking Company, which recently expanded, is a rare success story. Ivan Ramen, which opened in 2014, benefits from a constant stream of coverage in the food media. But even this buzz-worthy restaurant suffers through slow periods.

Many fledgling businesses have failed in an area that is removed from the bustle of Orchard and Ludlow streets. In spite of gentrification, few local residents can afford the types of upscale retailers who are leasing Clinton Street spaces. About one-third of the households in the Census tract covering Clinton and surrounding blocks have an annual income of $25,000 or less. Only about 15% of households have an income of $100,000 or more. The best solution, as Dufresne and others see it,  is a commercial area that supports both the local community and customers from elsewhere. Finding the right mix has been tricky business, but Dufresne thinks it is possible. “I do believe that if there are enough places and they’re good, that Clinton Street could become a destination,” he said.

One organization trying to find the right blend for the neighborhood is ALBOR, the Association of Latino Businesses and Residents. In 2014, it teamed up with another group, Good Old Lower East Side (GOLES), and the city’s Department of Small Business Services. The non-profits received a $30,000 “small business attraction” grant to help locate independent businesses for some of the many retail vacancies on Clinton Street. They met with local residents to find out what types of businesses they wanted to see, conducted a marketing survey and reached out to landlords.

Recently we sat down with Enrique Cruz, ALBOR’s founder, for a progress report on the initiative. According to our count, there are 21 establishments on Clinton Street with liquor permits out of about 90 total storefronts from East Houston to Delancey Street. During public outreach sessions, residents made it abundantly clear they opposed more nightlife businesses in the area. “We are trying to act in the community’s best interest.,” said Cruz. “We haven’t gone after nightlife or restaurants at all because we understand the community has a oversaturation (of these types of businesses). A lot of people feel that way.” What residents did request is shops offering local services, such as home goods and hardware. While there have been some interested business owners, said Cruz, they require significant floor space; almost all of Clinton Street’s storefronts are small.

Another stumbling block has been working with a diverse group of landlords and prospective tenants. Seven or eight months ago, it looked like a deal was in place for a concierge services businesses. But attorneys for both parties were unable to agree on language in the contract, so the agreement fell apart. The big problem, though, is no mystery to anyone. “The elephant in the room,” he said, is that rents are substantial, hovering around $100 a square foot. Many mom-and-pops are simply priced out. One of the conspicuous examples can be found at 47 Clinton St. After Icon sold the 50 Clinton St. development site in 2014, it turned around and bought a tenement right across the street for $5 million. For many months, big signs have been posted in the newly installed picture windows advertising two spaces (900 sq. ft. each) for $6,000/month.

There are some signs of an upswing. Storefronts are filling up at a quicker pace recently. New players include: Koneko (New York’s first Japanese-style cat cafe), Garfunkel’s (a second floor cocktail bar), Scumbags & Superstars (an edgy streetwear brand) and Boba Guys (the San Francisco-based organic bubble tea company). They will soon be joined by Paloma Rocket, a self-serve beer concept, and Speedy Romeo, a wood-fired pizza restaurant from Brooklyn.

One person who has seen her share of comings and goings on Clinton Street is Meghan Joye. She’s co-owner of Donnybrook, a bar that opened in October of 2008. She also serves on the economic development committee of Community Board 3 and on the board of directors of the Lower East Side Business Improvement District (now the LES Partnership).  Speaking of her own business, Joye said, “We started off pretty strong and in the last couple of years things have definitely plateaued for us.” Bars, of course, have a stronger business model than a lot of other retailers. “I know that Donnybrook is probably one of the busier locations on Clinton Street,” Joye explained. “If we’re struggling, everyone else must be struggling, too.”  She’s optimistic that the big Essex Crossing development project, adding new apartments, entertainment venues and destination retail, will be good for the whole area. “That’s got to increase foot traffic,” said Joye. “That’s why we’re hanging on. Things have got to improve. It’s just unfortunate that there are a lot of places that can’t hang on until then.”

Some people on the block – including Dewey Dufresne and Jairo Barro of Galeria believe merchants on Clinton Street should form an association to advocate for their interests, coordinate marketing campaigns and possibly stage some public events. Joye said she loves the idea, but is also concerned about the obstacles. During the past five years, she’s tried many times to get business owners together. It’s always hard, she said, because independent operators are overwhelmed running their shops and restaurants. They just don’t have the hours in the day to run an advocacy organization. The Business Improvement District (now called the LES Partnership) does not cover Clinton Street. While an expansion was considered a few years ago, the topic is unlikely to be revisited unless there’s significant support for the idea among business owners and property owners on the block.

Whether it happens organically or through the assistance of some type of neighborhood organization, the time might be right. “Clinton Street has always needed something cohesive,” said Dufresne, “something to knit all of the businesses together.” In the meantime, he’s got a sandwich shop to open. Hopefully, you’ll be able to stop by for lunch by late spring or early summer.