Quantcast
The Battle to Save the Businesses That Make New York Unique

Activists say that unless major reforms are made into law, real estate developers will wipe out the city's quirky shops and bars and replace them with chains.

"I've got 10,000 records here," Tony Mignone boasted, as he surveyed the crates of vinyl in their faded cardboard sleeves under the shadowy light of Fifth Avenue Record and Tape. A former mailman, Tony opened up his store in his native Park Slope, Brooklyn, in 1972. He had dreamed of running a record shop since he was a kid, collecting the latest 45s from the country and western greats of the era. Their names still come rolling off his tongue—"Webb Pierce, Hank Snow, Slim Whitman..."—though a stroke has given his Brooklyn accent a bit of a slur. Now, he tells me, it's too expensive to continue operating the shop.

"Yuppies took over Fifth Avenue," he said, describing how the once-working-class neighborhood has changed. Forty-three years ago, Tony's rent was $250 a month. Today it's $3,300. "Imagine if that's what I had to pay now?" he asked with a rueful smile. Since his lease expired last year he's been renting his storefront on a month-by-month basis. Unable to afford to keep up with costs he's put his entire stock up on Craigslist, and the future does not seem bright. "I wanted to sell the store but I don't have a lease," he told me.

Shops like Tony's are endangered habitats in New York City.

"I've lost a hundred places that I love," Josh Alan Friedman, author of Tales of Times Square, a look back at the days when 42nd Street was full of hustlers and weirdos. "Why couldn't they leave a few blocks alone and let it be a red light district?" He insisted he isn't "mourning the old days of graffiti and crime." Rather, it's places like Cafe Edison that he misses most. Opened by Holocaust survivors from Poland in 1980, the diner shut its doors last fall despite a campaign by patrons to rescue it from plans by the building's owners, the Edison Hotel, to turn the space into a upscale restaurant.

"I'd been going there since it opened 35 years ago," said Friedman. "It was the only restaurant left in Times Square for local folks where you could sit down and talk for two or three hours with a group of friends over a pot of coffee."

"There are a lot of people who think, Oh, it's the real-estate market, there's nothing that can be done. No, there are things we can do." –Jeremiah Moss

Friedman, who now lives in Texas, is far from the only person mourning the increasing homogenization and gentrification of New York. In recent years a number of activists, writers, and general busybodies have begun calling attention to the ways rising rents have not just squeezed out poor minority populations from neighborhoods they've traditionally occupied, but also forced out the greasy spoons, dives, and dusty shops which have traditionally given this city its character. Last year, Jeremiah Moss, the pseudonymous author of the blog Jeremiah's Vanishing New York, put a list of potentially at-risk established establishments; since then, several of them have been forced to close by circumstance or edged closer to shutting down.

Moss, who got attention in major publications this spring for his anti-gentrification crusade, has also begun crowdsourcing video testimonials from New Yorkers documenting their beloved mom-and-pop operations that are under threat of closure. That's part of the Save NYC campaign he launched this year in the hope of pressuring the City Council to finally pass the Small Business Jobs Survival Act (SBJSA), a bill that has been a kind of unattainable holy grail for activists for three decades.

Though the complexities of lease regulation seem like an unlikely topic to inspire much passion, in New York City at least these debates can become extremely heated.

"For a business to last 100 years in New York, even 50 years, is probably harder than lasting two millennia in Damascus or Constantinople," Josh Friedman pontificated in a video at the SaveNYC.nyc website that rivals Spike Lee's famous anti-gentrification monologue in its vitriol. "So when I say they've destroyed New York's old stores, bars, restaurants, hangouts, I'm saying the real estate market has destroyed the sacred watering holes and gathering places of the 20th century."

Mercantile rents in America's urban centers are on the rise nationally, up 4 percent since 2011, but in New York City, where space is finite and every square inch comes with a price tag, they have risen astronomically. In Manhattan, the average retail rents have gone from $103 to $153 per square foot rent is 34 percent higher than it was ten years ago, according to the Real Estate Board of New York (REBNY). As small businesses have been priced out, chains have moved in. There were 7,473 national chain locations in New York City in 2014, the Center of Urban Futures noted in it's annual "State of the Chains" report, and these franchises were expanding at a rate five times that of the previous year.

Big retailers and rising real estate prices aren't just erasing the hideouts of a bygone bohemian New York. The city lost 75 bodegas (local slang for "corner store," basically) last year and hundreds more of these predominately minority-run businesses are under threat of closure. Facing a near 150 percent rent hike when its lease expired in June, Jesse's Deli, in Boerum Hill, Brooklyn, began posting signs for "Artisanal Roach Bombs" at $15.99 and "Dickson's Farm Condoms" for $24.99 in its windows—a pointed jab at the gentrification process pricing them out.

While Moss admits that New York City is always in flux, he argues that it is currently undergoing a process he calls hyper-gentrification and defined in a lengthy blog post last year:

What I and many New Yorkers had become aware of was not the birth of a new process, but its full flowering. A new form of gentrification had been at work for years by that time—planted in the 1980s, tended and protected through the 1990s, it was now blossoming into a terrible, unstoppable garden of choking vines. Its presence, previously felt, was now unmistakably apparent. To mix metaphors, it was like we were witnessing the sudden, dramatic collapse of an ancient glacier after years of quiet, steady melting. All around us, the great city crumbled.

"We're getting a city filled with this incredibly boring monoculture," Moss told VICE. "There are a lot of people feeling this crisis we have in the city but they think, Oh it's the real estate market, there's nothing that can be done. No, there are things we can do."

Moss said SBJSA will help reverse this trend by leveling the playing field between landlords and the business owners who rent from them. Similar to residential rent stabilization laws, it would give commercial tenants the option to automatically renew leases for up to ten years once they expire and, when disputes over lease negotiations arise, contains a legal mechanism that sends both parties into into binding arbitration, making it harder for landlords to raise rents.

SBJSA is almost as old as some of the establishments it could help save. It was first proposed in 1986 but has languished ever since, due, Moss insists, to opposition from the real estate lobby.(REBNY and its members spent $43.9 million on local and statewide candidates between 2005 and the most recent citywide elections in 2013, according to the government watchdog group Common Cause.)

REBNY did not respond to inquiries from VICE, but the board's president, Steve Spinola, told the New York Post's Lois Weiss last that SBJSA would "send a terrible message to the business community," is beyond the power the City Council to enforce, and if enacted would be mired in legal challenges—presumably from REBNY. Weiss herself likened the bill to communism.

"We don't know what people are going to love in the future. But I bet it won't be a chain store." –Josh Friedman

Other critics of SBJSA, such as Crain's New York's Greg David, have cautioned the legislation will eliminate the incentive small businesses have to risk expanding to larger locations and would depress real estate values, in turn shrinking the city's budget because property tax revenues would shrink. David also contends SBJSA would make it harder for businesses to come to New York—and not all new chain stores are necessarily evil. "Does anyone really think New York would be a better place without Home Depot or Target or Whole Foods?" he asked in one 2010 article.

Manhattan Borough president Gale Breweropposes SBJSA, citing concerns that it could infringe on property rights and arguing that since the bill applies to all commercial tenants it could just as easily give large retail chains squatters rights as it would preserve local businesses. She's instead proposed less sweeping she contends are more practical, like instituting a one-year lease extension with a maximum 15 percent rent hike when tenants and landlords fail to reach a renewal agreement.

But not all business interests oppose the SBJSA. The idea is supported by members of the New York City chapter of the Real Estate Investors Association, which unlike REBNY represents small building owners and landlords rather than large corporate developers.

"We want to be responsible," Paul Bodley, who serves on the trade organization's advisory board, told VICE. "We're concerned with longevity. If we keep raising the rent we're eventually going to price out the people who would actually rent our properties. We'll price ourselves out of competition. That's the catch-22. When you have a big-box tenant whose corporate office is in another part of the country you loose that neighborhood flavor. You don't establish that back-and-forth relationship you have with a small business in the neighborhood. That's what SBJSA is trying to preserve."

According to Take Back NYC, a group which is circulating an online petition in support of SBJSA, small businesses employ some 185,000 New Yorkers.

Of course, when mom-and-pop stores and restaurants close, it's not always the fault of a tyrannical landlord—keeping a small business alive is a difficult art.

For instance, B&H Dairy Kosher Restaurant, a 73-year-old institution in Manhattan, was closed for months after failing a gas inspection following a massive explosion in the neighborhood. It fired up its kitchen again Friday, but if patrons hadn't raised nearly $50,000 online to pay its expenses while its doors were locked, it could have become another abandoned New York landmark.

In other cases, small businesses actually own the roofs over their heads, meaning that gentrification can be at least a financial boon for them. Pepe Montero, who inherited Montero Bar and Grill from his parents, signed an agreement with Brick Real Estate and his neighbors this summer to sell the old longshoremen's haunt on Atlantic Avenue for a collective $56 million.

But while Friedman and other anti-gentrification advocates generally mourn the loss of each hole in the wall bar or restaurant, they're seemingly more concerned about the future—without SBJSA, they say, there won't be any way to stop New York from turning into a giant strip mall.

"We don't know what little shop just opened in Brooklyn that in 40 years will be an iconic place," Friedman told me. "We don't know what people are going to love in the future. But I bet it won't be a chain store."

Follow Peter on Twitter.