Leaders look to help businesses pushed out by subway project

By Ronda Kaysen

A group of small business owners who will be displaced by a new Fulton St. subway hub is getting the attention of local politicians and Downtown business leaders as the witching hour approaches.

The Metropolitan Transit Authority plans to seize five properties near Fulton St. and Broadway under the powers of eminent domain in order to build the new $785 million Fulton Street Transit Center that will combine the confusing Broadway/Nassau/Fulton stations into one and connect it to the Calatrava-designed PATH station at the W.T.C. In total, 140 businesses will be displaced, including the tenants in the historic Corbin Building, which will be preserved. The first tenants, those west of Broadway, will be out by the end of the year. The remaining buildings could be purchased by the M.T.A. as early as December. After that, tenants will receive 90 days notice. The M.T.A. expects all the tenants to be gone by August and the hub to be completed in 2008.

The tenants, in accordance with federal law, will be compensated by the M.T.A. for their moving costs and the M.T.A. will pay for any equipment — such as ovens —that cannot be moved. The M.T.A. has also provided real estate brokers to help tenants find new space.

The tenants represent a wide swath of the small business community. In addition to retailers and lunch food places, the upper floors of the buildings are filled with doctors, dentists, psychologists, tailors, designers and the like.

For many tenants, the M.T.A.’s offer is not enough to ease the blow of a forced move.

In June, several business owners on the east side of Broadway organized a coalition called the Ground Zero Small Business Association. Earlier this month they held a press conference organized by City Councilmember Alan Gerson on the steps of City Hall, launching a campaign to get the ear of the M.T.A. and the city.

“The M.T.A. could offer us something that would cushion our fall. It’s something they should do,” Arthur Castle, chairperson of the association, which represents about half of the tenants facing eminent domain, told Downtown Express. Castle is a statistician and a 17-year tenant of 198 Broadway, one of the condemned buildings.

For the tenants, many of whom endured 9/11, this latest development in the redevelopment of Lower Manhattan comes after four years of struggling to recover from the W.T.C. disaster less than two blocks away.

“The governor and the mayor begged us to stay Downtown,” said the association’s co-chairperson, Katherine Hill, co-owner of FDT Design in the Corbin Building. “We were all hit. We struggled to stay, we were asked to stay and now that we’re on our feet we’re being asked to leave.”

On the City Hall steps behind her stood three dozen small business owners clutching handmade signs reading “We survived 9/11 to be destroyed by the M.T.A,” and “M.T.A.: They created desolation and called it revitalization.”

Since the press conference, the business association has been getting the attention of local business leaders. The Downtown Alliance recently put its support behind the tenants.

“To the extent that it’s possible, we’d like to see them stay Downtown…. We will do our best to help as many as possible,” said Eric Deutsch, president of the Downtown Alliance, which runs the neighborhood’s Business Improvement District, adding that the transit hub “is very important to Lower Manhattan.”

The Alliance has been in discussions about the tenants with Community Board 1, which also recently got involved in the issue. The board’s Small Business Task Force passed a resolution last week requesting that the M.T.A. or the Lower Manhattan Development Corporation, the agency overseeing the redevelopment, secure additional funds to help keep displaced businesses in the neighborhood.

“They’re in a very difficult position, they’ve been in business for a long time and they’re losing their home,” said Joel Kopel, chairperson of the Small Business Task Force and general manager of Barthman Jewelers. “There are forces that are out there looking out for them. People are well aware of their situation.”

The majority of the tenants lease office space and as Downtown becomes increasingly residential, small office space is in short supply. Even with a 13 percent office vacancy rate Downtown, many small businesses cannot find small offices. Advocates for the displaced tenants have suggested leasing a large office and subdividing the space into smaller offices.

“A developer wants to rent a whole floor or multiple floors. They need to be willing to subdivide floors. That’s where the city could step in and be helpful in negotiating for space that would accommodate smaller businesses,” said New York State Assemblymember Deborah Glick, who recently wrote a letter to Robert Walsh, commissioner of the Department of Small Business Services, on the tenants’ behalf. “All agencies should be willing to be helpful.”

For many of the tenants, rent will spike even with public support. Some tenants have longtime leases, with rents as low as $13 per square foot, well below market rate. Castle requested rent subsidies to ease the burden and the loss of business that would be associated with moving to a new location.

“A lot of these people are paying the old prices for Lower Manhattan. That doesn’t exist anymore,” said Kopel, adding that tenants need to be clear about what they want — and what they can afford. “They need to wake up to the reality that it got more expensive in Lower Manhattan… They need to come to terms with that, and once they do, they need to figure out if a build out will be amenable to the new rates.”

M.T.A. has not indicated if it will help the tenants anymore than what it originally promised. “We are assisting all of the impacted parties,” said M.T.A. spokesperson Mercedes Padilla, reading a prepared statement to Downtown Express. “We are reaching out to them and we are hoping to find a location for them to establish their businesses. We are paying the relocation cost and awarding fixture payment,” for equipment that cannot be moved.

For some tenants—especially those on the west side of Broadway who have already received their notices—the recent interest in their cause might not be enough to keep their businesses afloat. “It’s a little too late,” said Geoff Feder, a partner of Cookie Island at 189 Broadway, which will likely close before the holidays. Feder does not expect his cookie store, which was originally supposed to open on Sept. 12, 2001, to survive this latest setback. “This happened two years ago and at 11 o’clock they figure someone will do something? It’s a little too late for that.”

Ronda@DowntownExpress.com

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