DoBro Redevelopment Not So Great for Everyone
Not everybody is profiting off the Downtown Brooklyn boom, according to a recent report. Families United for Racial and Economic Equality (FUREE) and the Urban Justice Center conducted surveys of 61 small businesses in Downtown Brooklyn over the past year and found 35 have since moved or gone under. Many of the closures were attributed…
Not everybody is profiting off the Downtown Brooklyn boom, according to a recent report. Families United for Racial and Economic Equality (FUREE) and the Urban Justice Center conducted surveys of 61 small businesses in Downtown Brooklyn over the past year and found 35 have since moved or gone under. Many of the closures were attributed to four large projects &mdash City Point, Al Laboz’s planned Willoughby West tower, Stahl Real Estate’s 50-story office tower, and the planned Willoughby Square Park &mdash and the decrease in daytime business as office towers were emptied for residential development. Three-quarters of the owners surveyed are immigrants, 64 percent non-white, and 23 percent women.
The report, “Out of Business,” points out that Fulton Mall was already one of the city’s most successful retail corridors with 100,000 daily shoppers and $100 million in annual sales. In fact, a prominent local broker explained to us that Fulton Mall’s retail space is so lucrative that landlords actually removed stairwells and elevators in many of the buildings to create more ground-floor space, which now rents at between $150 and $300 per square foot (we were wondering why all the unsightly boarded-up windows). He said residential and low-end office tenants who would have rented out the upper levels were more troublesome and less lucrative, so landlords simply boarded up the windows and stopped maintaining those floors. FUREE co-director Ilana Berger suggested landlords re-open that less expensive space to small business owners, many who had already been paying prime ground-floor rates, as one way to maintain Fulton Mall’s diversity. But she acknowledged that after decades of neglect, renovation would be costly. Berger said she also tried to meet with the City Point developers to help secure space for displaced and aspiring small businesses owners in the tower’s 500,000 square feet of planned retail, but was met with disinterest. Click through for stories on some of the businesses profiled in the report, and the Downtown Brooklyn Partnership’s response…
Alas, the report alludes, the new residents and office tenants the city hopes to attract don’t generally shop at the same book and apparel stores; they don’t get their hair and nails done at the same places; and they want a different crop of restaurants. And the landlords (only five of the entrepreneurs surveyed owned their store or building) want to cash in on the lucrative 2004 Downtown Brooklyn re-zoning, but in order to build towers, the existing business owners had to be kicked out. But will they be invited back?
Joe Chan, president of the Downtown Brooklyn Partnership, a public-private agency, responded with a statement: “Downtown Brooklyn is one of the fastest growing urban centers in America. The redevelopment activity in the area brings with it jobs and a permanently enhanced local economy. The Downtown Brooklyn Partnership with its BID partners work to connect small business owners with available resources and appropriate service providers.”
According to the report, many small business owners weren’t offered this assistance. Berger said the city could create a Business Relocation Assistance Corporation for Downtown Brooklyn like they have in Williamsburg-Greenpoint and other parts of the city. Displaced small businesses are provided grants that help with relocation costs such as moving heavy equipment; hiring lawyers, architects and contractors; and other costs associated with signing a new lease. Otherwise, relocation assistance is on the onus of landlords, isn’t always honored, and often involves lawyers. Here are a few businesses profiled:
- Gallery Religious Supplies owner Maisha Morales bought the business around 2001 when it was still at Albee Square Mall, and increased its daily earnings from $100 to $2,500 by 2006, according to the report. In in effort to sign a 20-year lease under previous owner Thor Equities, she spent $15,000 on lawyers, architects and contractors, then was served a nine-day eviction notice when rights to develop the building were awarded to the new owners, MacFarlane Partners and Acadia Realty Trust. She had to spend $85,000 to move and now pays three times her former rent for space on Willoughby Street.
- A & B Books owner Eric Gift, at one time the largest distributor of African American literature in the country with three stores in the Downtown Brooklyn area, may have to close his last location on Duffield Street, in the footprint of the planned Willoughby Square Park, if the city moves forward with seizing the property via eminent domain. The Lawrence Street and Atlantic Avenue locations closed down due to lack of business because of ongoing construction and changing demographics, according to the report. They first opened in 1989.
- Lawrence Street Wigs and Hats owners Joyce and Jee Kiehm ran a thriving business since 1986 by making customized wigs. They were forced out of 141 Lawrence Street because the new owner of their building, Stahl Real Estate, wants to build a 50-story tower, according to the report.
- Bagel Guys, at 102 Willoughby across from MetroTech, ran a thriving business until the Verizon building was sold and many Chase workers were relocated to New Jersey, but stuck around hoping the new BellTel residents would boost business again, according to the report. Despite being on a month-to-month lease since 2005, owner Jeff Garguilo bought out his partners with the understanding that his business would be safe for at least the next five years, then was served with a 60-day eviction notice once his landlord decided to redevelop the property. He is unemployed and unable to find affordable space within the vicinity, but is still looking.
The questions of the day are: What responsibility does the city have to ensure that these small business owners don’t fall into financial ruin in the process? And is there going to be a higher demand for the new businesses coming in than the ones already there, considering what’s available in surrounding retail corridors?
DoBro’s Average Household Income to Double? [Brownstoner]
Massive Bridge Street Tower In The Works? [Brownstoner]
Albee Square Mall Clears Out [Brooklyn Eagle]
Much of Downtown Brooklyn Is Going Out of Business [Brooklyn Eagle]
The study area:
yes hangon and bxgrl – an excellent use of limited tax dollars – subsidizing wig shops and incense shops!
Come on be real – although I share your disgust about the city giving WAY too much to Goldman as well as the apparent demise of A&S
Come on…I am sure that as Downtown undergoes Billions of dollars of redevelopment, many small business will either change or fail but citing this report is ludicrous – ignore the fact that it is being conducted by an organization with an obvious agenda, they based their findings soley on the anecdotes of 61 people. There are literally hundreds of businesses in downtown brooklyn – the personal opinions of the 60 people willing to speak with the Families United for Racial and Economic Equality is hardly a representative sample of anything except a pre-ordained determination.
I totally agree, hangonsloopy2. We’ve been so focused on the money, that we’ve failed to see the whole picture. If we don’t address how growth and change affect all of us, we will all pay for it in the long run.
I’ll be the first to admit the financial and economic niceties are not my forte, but I do know that if you don’t realistically assess the impact of single-minded development for a hi-end demographic in borderline and “up-and-coming neighborhoods, you will create social problems that come back to haunt you. this is playing out all over the city, from Harlem to Bed-Stuy, CHN, ft. Greene, Williamsburg, etc. And social problems will translate into financial ones.
Thinking development occurs in a community vacuum, or has no impact beyond a few hundred yards of the front door is completely foolish.
I’m on a bit of a rant about small business closings lately, after learning that A&S in Park Slope is closing because their landlord is more than doubling their rent. Having witnessed the uber-gentrification of 5th Ave over the last 7 years, and having recently moved to a much-less-gentrified but still gentrifying neighborhood, and recognizing that our family plays a clear role in that gentrification, I’m beginning to feel really strongly that the city needs to take steps to balance growth in its neighborhoods. No one wants to live in a place that only has check cashing places and bodegas, but no one – or at least not me – wants to live in a place full of repeats of the same bland, overpriced restaurants, boutiques, banks, and chain stores.
Small, locally- and/or minority-owned businesses are great things for neighborhoods, as others have said above, and there should be a way to preserve the diversity of types of business that you see in ‘hoods that have seen some improvements but aren’t totally over the top.
The city should provide tax credits to landlords who rent to local-owned or minority-owned businesses at less-than-market rates, and they should provide assistance to those businesses to help them stay in business. That will help curb the leaps-and-bounds growth in commercial AND residential rents, which in turn will help keep middle and working class people from being pushed further and further out. It will also create and maintain businesses that serve the myriad residents of neighborhoods instead of just the affluent new arrivals. And as for paying for such things, maybe the city could cut back on the giveaways to the Goldman Sachs and the Bruce Ratners a bit, in favor of preserving some of the vibrancy that gives (gave?) this city its soul.
**Steps down from soapbox**
Downtown is empty at night, as are many parts of Manhattan that are bustling business districts during the day. The City needs a broad range of businesses and services. By catering to one demographic, and destroying healthy businesses, we’re simply repeating on a local level the problem we created on a much larger citywide scale- too much dependency on too few industries- in this case Wall St., financial industries and real estate. (and that has also been reported on.)
Instead of trying to integrate the success of Fulton St. and the communities it serves with the needs and wants of newcomers, there is a concerted effort to simply do a gut reno and create what amounts to a virtual gated community in Downtown. The refined aesthetics of new residents aren’t in sync with the present incarnation of Fulton St. Not pretty enough. Not expensive enough. Not classy enough.
Yet small and minority owned businesses, and the middle and lower economic classes are a crucial part of the city economy.Destroying their success is a mistake, economically an socially.
DoBro? Ugh……
Two things:
1. Sounds like greedy landlords made their own beds by failing to maintain their buildings. But, in the course of doing this, they made their retail tenants the victims.
2. The displacement and destruction of local businesses in DT BK sounds a lot like what happened in many urban areas when urban renewal and interstate highways permanently altered the physical landscape in many cities. The difference is that the end result will be more people living in DT BK (which really becomes a scary area after all those businesses closes), which I can’t help but see as a good thing.
I know there will be many writing in who say, “tough sh@t. If you can’t pay, you can’t play.” That is shortsighted and untrue. There certainly is plenty of precident for very large businesses to be underwritten, given huge tax breaks, money under the table, and countless perks to have them stay or relocate in an area, including downtown Bklyn.
Small businesses are vital to any good economy. Minority business empowerment can mean more than just money to the business owner. It is jobs for others, and a step on the ladder to do bigger and better things. In a time when too many in society are still stereotyping minorities as lazy, small business owners are working like dogs to make their way. There is certainly room on Fulton St, and the side streets downtown.
Most of the landlords on Fulton Street make enough money for them to reopen and refurbish their upper floors. I don’t understand why they would rather the unsightly, unsafe conditions to be the order of the day, when a beautiful downtown could command even higher rents, not to mention the extra income from renting the upper floors. Penny wise, pound foolish.
Not able to comment further as will be away from a computer all day, but I’m sure this will get quite heated. Later.
Was there opposition to the rezoning in 2004?