Local Retailers Sing Recession Blues
“This is August 1914. This is the morning after
Pearl Harbor. This is 9-12.”
Overly shrill? Maybe. But if you’re still not convinced that the economic downturn is a crisis writ large, walk down any commercial street in Brooklyn and count the vacant storefronts or signs advertising 70%-off sales. Sure, business is booming in consignment shops, thrift stores, and at the local State Marshal’s office, but you don’t need a doctorate in economics to see that times are rough and getting rougher. Some see a silver lining in the inevitable turn from luxury, over-consumption, and capitalist excess; but in the short term, suffering is rampant as small businesses scramble to survive.
Take Bay Ridge and Sunset Park, contiguous working-to-middle class neighborhoods that are home to the types of mom-and-pop shops championed by late city planner, Jane Jacobs. According to nypost.com, Sunset Park households had an average income of $56,927 in 2008; in Bay Ridge the average was $78,356. Together, these communities contain approximately 170,000 people, many of them immigrants from China, Ecuador, Kosovo, Lebanon, Mexico, Russia, Ukraine, and Yemen.
Neither area has been particularly hard-hit by the economic collapse—at least not yet. Foreclosures are far higher in Bedford-Stuyvesant, Bushwick, Crown Heights, East New York, and Williamsburg. By contrast, the purchase price of condos, coops, and houses in both South Brooklyn communities has continued to climb. Rich Schulhoff, CEO of the Brooklyn Board of Realtors, reports that the average price of an apartment in Bay Ridge was $276,504 in 2008, up from $265,950 twelve months earlier. Sunset Park condos went for an average of $324,333 last year, compared to $292,000 in 2007.
But while real estate may be stable, local retailers are hurting. In restaurants and jewelers and clothing stores, everyone is bemoaning the downturn.
Reina Anderson is the co-owner of Henry Harde Wines and Liquors—known locally as “Harde’s”—a store that has served Bay Ridge since 1933. While package stores are typically considered recession proof, Anderson says that business has slowed. “Our customer count is lower,” she says, “and people who used to buy $30 to $50 bottles of wine every Friday are now spending $20 and they’re buying fewer bottles.”
Michelle Carbone, co-owner of Goodfellas—an Italian restaurant that won the World Pizza Championship the last 4 years in a row—notes a similar trend. “People are watching their money,” she says. “If they were eating out two or three times a week before the recession, they’re now eating out once and have cut back on what they order. They’re getting more pasta and pizza. The issue is price—pasta is cheaper. People are also using more coupons.”
Like most businesses, Goodfellas has downsized. “When staff leave the job we don’t cover their spots,” Carbone says, “This means that either me or my brother are always here, seven days a week. Still, it’s the workers who earn tips that are feeling the impact the most.”
Carbone says that she is constantly thinking of ways to lure customers into the ten-year-old restaurant, from music on weekends, to Early Bird specials, to increased personal attention for patrons. “We understand that it’s not anything we’re doing wrong, but we still have to do what we can to keep people coming back,” she says.
Marwan Dagher, owner of Le Sajj, a three-year-old Lebanese and Mediterranean eatery on Fifth Avenue says that he didn’t notice the economic collapse until after the holiday season. “I felt it right after New Year’s,” he says. “We were busy through the holidays but then things took a nose dive. I’ve never seen anything like it. How much am I down? Close to 50 percent. I’ve had to cut the number of days the kitchen staff work and I open, I close, and I work lunch by myself. For dinner it’s one waiter, one busboy and me. Saturday night is still good but one night doesn’t make a dent in a recession.”
Shee Choy of Sunset Park’s Palacio Chino estimates that business is down 40 to 50 percent. “It’s terrible,” Choy says. “This is the worst it’s been in the 15 years we’ve been open. We used to serve 200 or 250 people a day. It’s now around 100. People don’t have money to spend. We have six employees who used to work 40 hours a week; they’re now working 20 to 25 hours. What would make it easier for us to stay open? Rent control. Otherwise, it’s very hard to make a living.”
Restaurateur after restaurateur—it doesn’t matter whether the cuisine is American, Asian, Mexican, or Middle Eastern—tells the same story. Business has plummeted and they do not know how much longer they’ll be able to stay open unless something changes.
Matthew and Allison Robicelli opened Robicelli’s, a gourmet food shop, in September 2008. Located on Bay Ridge’s formerly bustling Third Avenue, they cook on-site, give out samples, offer discounts, and prepare a different organic dinner every day. Matthew Robicelli hopes that neighbors will respond with their business. “We may be 15 cents more than Food Town, but when you shop in our store you’re supporting a family. Your purchase helps pay college tuition for one of the cashiers. When you shop in a conglomerate you’re not increasing the value of the neighborhood, but when you shop at Robicelli’s you’re helping real people from the community.”
Sal Forte, owner of Hom, a seven-year-old gift and home furnishing shop on Third Avenue, is also a proponent of shopping locally: “If you don’t support small, independent businesses they won’t exist, whether there’s a recession or not.”
The sole employee of the business—there were once three—Forte says that he continually wracks his brain for ways to get customers in the door, from holiday chocolate tastings, to Feng Shui consultations, to weekend brunches.
“There is one thing going up in sales,” he laughs. “Candles. A lot more people are staying in and buying a bottle of wine instead of going to a bar.”
Candles not withstanding, Forte admits that he cringes when his landlord comes to collect the rent. “Commercial rent control would make a huge difference since the cost goes up about five percent a year,” he says.
Most proprietors agree that commercial rent control would help them keep their doors open in stabilizing communities. Like Forte, an owner of a Sunset Park jewelry shop who identifies himself as “Gus” says that he is disgusted by the lack of government support for community businesses. He says that his rent went from $2,000 a month in 1994 to $5,500 today. “Some months I work just to pay rent,” he grumbles.
The Brooklyn Chamber of Commerce has not taken a position on commercial rent control, but the results of a member survey released in January found additional items on the business owner wish list: universal, Federally-supported health insurance; lower energy prices; and reduced fees for liability insurance. “Brooklyn is not immune to the country’s challenges,” says Carl Hum, President and CEO of the group, “but since most Brooklyn businesses are small—hiring in the ones, twos, and threes—they’re more nimble and can respond to the market faster than large businesses.”
Nimble or not, there is only so much businesses can do on their own.
Some are getting creative—Robicelli’s and Harde’s, for example, host monthly food and wine tastings. Harde’s is also part of a statewide coalition opposing the sale of wines and liquors in supermarkets and delis. “Lastmainstreetstore.com estimates that there are 1,000 liquor stores employing 4,000 people around the state,” says Reina Anderson. “If they allow Walgreens and supermarkets to sell liquor it will have a drastic impact on small stores. We won’t be able to compete.”
For Matthew Robicelli, running a small business is about building community. “We try to do right by people,” he says. “We don’t price gouge. We offer our employees health benefits, pay them a living wage, and use only biodegradable products. We support local food producers.”
In the end, he adds, locally owned and operated businesses give Bay Ridge and Sunset Park their vitality and character. Malls may sell stuff for less, but when we shop in them, neighborhood tradespeople languish—and so do South Brooklyn’s Third and Fifth Avenues.