By J.B. Nicholas
City officials have just begun an investigation into allegations that small business owners in a city-owned mall in Chinatown are in effect, being extorted by the mall’s managers. The investigation was sparked after the mall’s shopkeepers banded together with local activists and held a press conference in front of the mall two weeks ago to announce their allegations, which they say has gone on for years.
Though the merchants have alleged a veritable constellation of corruption, the core of their complaints concern demands for so-called “yum cha” money, also known as “dim sum” or “key” money, which is cash exchanged with persons who own or control property in order to obtain or extend leases to that property. Such dim sum or key money payments are outlawed in New York, under legislation passed in 1983.
The mall, known to Chinatown residents as the “88” mall, after its address at 88 East Broadway (the number 8 is lucky in Chinese culture), is a forlorn, beige-brick box structure that sits on what was once disused city property beneath the Manhattan Bridge. Within its walls lie three floors of small stores more akin to stalls than the spacious retail spaces suburban shoppers are familiar with.
In 1985, the city leased the property for 50 years to a private developer in return for a base rent of $700,000 per year plus a percentage of the mall’s gross revenue. Today, that developer is doing business as the East Broadway Corporation, sub-leasing retail space in the mall to 100 or so small merchants, charging anywhere from $500 to $60,000 a month in rent, according to the Coalition to Protect Chinatown and the Lower East Side, an advocacy group.
The mall does have a secretive feel. The day of the press conference, men carrying duffel bags came and went at will, gliding past a lone security guard more concerned with reporters than them. These men wore brimmed hats and kept their heads tilted down, keeping their faces discreetly obscured. The men moved inconspicuously yet assuredly through the crowd. When a television crew made its presence known at the front entrance to the mall, these men began using the rear entrance.
In a shop on the basement level of the mall, around the corner from a dumpling café, a group of people sat in a circle counting cash. In one woman’s hands, a stack of bills at least four inches high could be seen. When this reporter lifted his camera to take a picture, the woman holding the cash quickly concealed the stack, and the entire group turned their backs to hide their faces.
There are also no dedicated toilets for the shopkeepers and their workers, who have to use the public bathrooms available to shoppers, which cost 30 cents a visit, according to the signs. Attendants who sit in front of the restrooms collect the change and put it in lock-boxes.
Florist Mei Rong Song rents space inside the mall. She opened her business, the Rong Chen Flower Store, in 1992, she said in Chinese through a translator provided by the Chinatown coalition. In 2001, she said, the mall refused to renew not just her lease, but a majority of her fellow shopkeepers’ leases as well. The mall, she said, also began demanding rent payments in cash, a request she and most of the other shopkeepers complied with.
“They cheat the general public,” Song said, figuring the landlord does not pay taxes on the cash payments. “They don’t pay what they owe.”
In addition, the landlord has failed to provide adequate electricity, as well as heat and plumbing, Song said. Her shop opens directly onto the street and she said she closes it in winter because it is too cold.
Song was content to ride it out feeling it was just the way it is. That changed late last year when the landlord notified her that her rent would increase from less than $3,000 to $12,000 per month. She refused to pay the increased rent and, instead, began organizing other mall shopkeepers against the increases.
“The landlord was so bad I had to continue to pay rent while I closed my shop during the winters because there was no heat or water,” Song said. “Now when all of us are suffering [because of the recession], he wants to kick me out on the street?”
The mall moved to evict her for not paying the rent increase.
Herbalist Liu De Hong is another small business owner in the mall. The mall tried to triple his rent, he said, from $4,000 to $12,000. Hong was willing to pay more but negotiated the hike down to $9,000. He said that’s when the mall informed him that work needed to be done on his shop, if he was to keep it, and the landlord demanded an up-front payment of $30,000. Suspecting he could contract out the work himself for less, Hong said that’s what he would do. But the mall said only the contractor approved by him could do the work. Reluctantly, Hong paid the fee.
“But they didn’t do anything,” he said through a translator.
Hong said the mall wants him to “pay another $60,000, which I do not know what they money is for. I do not know how to survive with the economy going on. I picture myself finally ending up on the street.”
Repeated requests for comment made to Robert Wong, the mall’s lawyer, were not returned.
The city’s Department of Citywide Administrative Services is responsible for overseeing the mall. A spokesperson for the agency said last week that “we’ll be investigating the allegations against the management company.”
