BY BRAD HOYLMAN | The market has no morals. A better example of this maxim could not be found than on our local avenues and side streets, where independent businesses are falling like dominos, forced out because of rising rents. Once they’re gone, these spaces might be filled by a national chain — maybe a bank or a drugstore — but often they remain vacant, sometimes for years.
I continually hear concerns about this phenomenon — known as “high-rent blight” — from neighbors concerned about availability of local goods and services, empty storefronts’ negative impacts on neighborhoods, and the loss of treasured bookstores and restaurants.
My new report, “Bleaker on Bleecker: A Snapshot of High-Rent Blight in Greenwich Village and Chelsea,” examines this vexing problem. Using data collected through surveys across major commercial hubs, the report found alarming storefront vacancy rates in our area — specifically, as high as 18.4 percent on Bleecker St.
The alarming vacancy rate of nearly one-fifth of storefronts on Bleecker St. is apparent to anybody who has walked down the street in recent months. “For Rent” signs hang in windows all along the street. In fact, since Bleecker St.’s luxury retail boom began in 2001, an astonishing 44 small businesses have vanished and been replaced with upscale chains. In turn, many of those are now gone, too, leaving empty storefronts.
Landlords don’t renew the lease of longtime businesses. They then keep the space vacant, holding out for the payout of a long-term lease from luxury retail or corporate chain, which can take months, or even years. The result is a glut of empty storefronts or chain stores and high-end national retailers.
In The Villager this past February, Michele Herman, in a talking point, “Taking stock of the state of Village’s stores,” reported extensively on the slew of empty storefronts on both Christopher and Bleecker Sts.
“I reasoned that randy Christopher St. might be a special case,” Herman wrote, “but empty storefronts on a major fashionista destination like Bleecker surely point to something way out of whack with the economy.”
Four months later, The New York Times followed up with a report on the latest turn for Bleecker St.: the vanishing of high-end retail. Six Marc Jacobs stores, Ralph Lauren, Brooks Brothers Black Fleece, Lulu Guinness and numerous other luxe shops have shuttered.
Some real estate analysts insist higher rents are the natural outgrowth of a strong retail market or that the spate of closings along Bleecker and elsewhere is due to new pressures from Amazon and online retailers. Both could be true. That doesn’t mean a community shouldn’t try to do something to save the “mom and pops.” Self-concern should be a motivating factor. Studies show chain stores are far less likely than their local counterparts to keep profits in the community. One study found that only about 13.6 percent of revenue from national chains is reinvested back into the local economy, compared to 47.7 percent from locally owned businesses.
I’ve suggested a number of strategies to address high-rent blight and preserve our independent businesses: • Creating a Legacy Business Registry that would track and maintain a list of small businesses that have been in operation for at least 30 years. This would enable the state to recognize important businesses and possibly provide them and their landlords with historic preservation tax credits and other incentives.
• Passing legislation that would allow the city to implement formula retail zoning restrictions. Under such a plan, local communities would get a say on the number of formula retail stores (chain stores, big drug stores, banks, etc.) opening in their neighborhood.
• Phasing out deductions for depreciation of property and operating expenses for building owners who leave retail spaces vacant for more than a year.
• Eliminating the Commercial Rent Tax for small businesses. This is an onerous, outdated burden on commercial tenants below 96th St. The City Council is set to reduce this tax. The state should act, as well.
• Requiring the city to collect and publish data on commercial vacancy rates. Currently, this information is not available to the public.
Commercial rent control faces steep hurdles in both Albany and the city. But we can take steps to rein in the rapacious market forces to protect small businesses and defend our neighborhoods’ character. I’ll soon introduce legislation based on the ideas in this report. Meanwhile, I want to hear your views on this important issue at hoylman@nysenate.gov.
Hoylman is state senator, 27th District (Greenwich Village, East Village, Lower East Side, Stuyvesant Town, Chelsea, Hell’s Kitchen, Upper West Side)
