As Bay Ridge Frets About Vacant Businesses, Officials Search for Answers

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Vacant storefronts on 86th Street in Bay Ridge on February 28, 2019. (Justin Mitchell/BKLYNER).

BAY RIDGE – Last December, City Councilmember Justin Brannan wrote an Op-Ed giving voice to widespread concern in his district, which covers Bay Ridge, Bath Beach and parts of Dyker Heights and Bensonhurst.

“There are too many vacant storefronts in our community,” Brannan wrote. “Sometimes it feels like every other week, another store or restaurant that’s been around forever suddenly announces it is closing. And while businesses come and go, and good things don’t last forever, it’s clear the outgoing shops, stores and restaurants aren’t being replaced by new ones as quickly as in the past.”

Brannan was expressing feelings that have frequently arisen in local blogs and social media groups.

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Local blogger Queen of the Click has been keeping a running list of store closures in Bay Ridge for the last four years, and told Bklyner she noticed an uptick in closures near the end of 2018. She recorded several long-standing local businesses which closed near the end of last year, including staples like the gift shop Zen and the restaurant Sancho’s, both located on 3rd Avenue.

But while many in Bay Ridge share this perception, figuring out what is actually the cause, and how to fix it, is difficult.

As of February 26, the Bay Ridge 5th Avenue BID had a vacancy rate of 3.6%. (Justin Mitchell/BKLYNER).

A “MYTH”?

While the presence of vacant stores is clear to anyone walking through Bay Ridge, those responsible for the neighborhood’s commercial corridors have mixed views on the actual magnitude of the crisis, or whether there even is one.

Amanda Zenteno, the Executive Director of the Bay Ridge 5th Ave Business Improvement District (BID), went on the local podcast Radio Free Bay Ridge in January and labeled the worries over vacant stores an “absolute myth.”

“I do believe it is a myth, [at least] for the Bay Ridge 5th Avenue Business District,” Zenteno told BKLYNER in her BID office just off 5th Avenue last Tuesday.

Zenteno’s BID covers 5th Avenue from 65th to 85th Streets. They do a walk-through each month to track, storefront by storefront, the number of vacancies. As of February 26, Zenteno said their vacancy rate was 3.6 percent, and added the BID tends to run about a 5 percent vacancy rate—which she says is excellent, especially in comparison to other BIDs throughout New York City.

“I think the complaint is more about if they lose something that was a neighborhood staple, or if they’re worried about things that come in and, you know, they wish that something else was filling the vacancy,” she added.

Robert Howe, president of Merchants of 3rd Avenue, a community nonprofit currently in the process of becoming a BID, echoed Zenteno’s take—that 3rd Avenue does not, in fact, have a significant problem with vacant businesses.

“The reality of it is stores close for a variety of reasons,” Howe said, listing a desire by the owners to retire (citing the case of Sancho’s), overregulation and sometimes leaving one location to open up somewhere else or work hand-in-hand with another business as possible reasons why businesses close. He also pointed out the popularity of online shopping. In addition, several closed businesses on 3rd and 5th are either undergoing renovations or have new tenants moving in shortly.

Some 3rd Ave businesses have either combined with another business, are closed temporarily, or have another business moving in soon. (Justin Mitchell/BKLYNER).

Overall, Howe said 3rd Avenue currently has a vacancy rate of about 7 percent.

“I think when you see a vacant store, you sort of apply that to the entire avenue when really 3rd and 5th Avenue are still pretty well rented,” Howe said.

Located near 3rd and 5th Avenues, the 86th Street BID is very different, taking advantage of an important transportation hub for Staten Island commuters.

Patrick Condren compared his BID to Times Square. Several large chains, notably a Century 21, occupy a few blocks near the 86th Street subway station, where people often transfer onto buses that cross the Verrazzano Bridge. Condren says Brannan was right to point out vacant businesses as a problem, and that 86th Street has a bigger issue than 3rd or 5th Avenues.

“It’s a slight uptick in vacancy rates, but the majority of the big stores are all occupied,” Condren said. He pointed to online shopping as something impacting retail throughout the city.

This Associated Supermarket on 86th Street closed last year. (Justin Mitchell/BKLYNER).

Among notable recent closures is an Associated Supermarket at 86th and Gelston.  Up the street, three buildings in a row were all empty as of February 28.

GENERALLY LOWER RATES?

In addition to their interview with Zenteno, Radio Free Bay Ridge, a hyper-local progressive podcast hosted and produced by local activists Rachel Brody and Dan Hetteix, did their own count of closed businesses on all three of Bay Ridge’s major commercial corridors, as well as sections of 4th Ave.

They found low rates of vacancies on 3rd and 5th Avenue, with slightly higher ones elsewhere—including 11.1 percent in the 86th Street BID and similar numbers on two sections of 4th Avenue unsupported by a BID.

Overall, they found a 7.8 percent rate of closed businesses in all the sections of Bay Ridge they examined, with 1.8 percent undergoing renovations.

The problem is figuring out whether this rate is good or bad compared to other parts of the city.  Nicole LaRusso, the Director of Research and Analysis for real estate company CBRE, which does not track Brooklyn vacancies, says city-wide or even borough-wide vacancy data is “hard to come by.”

“There isn’t good comprehensive inventory data for the retail market,” she said of New York City in general.

A recent New York Times article that said 20 percent of stores in Manhattan were vacant was controversial after publication, with the Douglas Elliman analyst quoted as giving the number later denying she had said it.

The city does have 76 total BIDs, all of which regularly monitor their vacancy rates and report them to Small Businesses Services, which releases a yearly report showing trends. The most recent available report is from the fiscal year 2017, and shows a 5.6 percent vacancy rate for the BIDs city-wide.  SBS said the 2018 report will be available this spring.  The SBS numbers cover only BIDs and those numbers are self-reported by the BIDs.

The lack of solid data is an issue acknowledged even by the office of Mayor Bill de Blasio.  Spokesperson Raul Contreras told BKLYNER de Blasio believes the vacancies are a problem, and is in the process of coming up with a policy to approach them.

“I think we need to sort of gather a lot more information,” Contreras told BKLYNER. “We’re sort of exploring ways in which we can do something like that. And we’ll have more to say soon.”

POLICY FIXES

A recurring theme in critiques from business owners, activists and officials is that landlords have begun to hold onto vacant properties in the hopes of either selling them to developers or renting them for higher prices, leading to what Brannan called “commercial blight” in his Op-Ed.

“The issue here isn’t a lack of entrepreneurial interest but a lack of motivation with some landlords to rent their property,” Brannan told BKLYNER in an emailed response to questions. “They either see tax benefits from writing off the loss of income or they are holding out for what they consider their ‘dream tenant’ who will sign a 20 or 30-year lease.”

De Blasio has commented on this issue before, voicing support for some kind of a commercial vacancy tax to push landlords to rent out their properties, preferably passed through Albany. (Contreras would not confirm whether or not this was what the Mayor’s office is working on).

“Let’s pass a smart, targeted tax to stop landlords from leaving their properties empty from blighting neighborhoods. Let’s make clear to landlords that this is a problem for our communities,” de Blasio said during testimony to a state budget committee last month.

We asked Brannan his position on a vacancy tax and will add it when we hear back.  He has co-sponsored a bill that would create a “retail resurgence task force” to examine this and other issues facing retail businesses in the city, but seemed cool to the Small Business Jobs Survival Act (SBJSA), a long-in-the-works measure intended to give small business owners the option to negotiate leases with their landlords, pointing out the NYC Bar Association recently said the city lacks the authority to institute it.

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19 COMMENTS

  1. I’m from Bay Ridge (went to New Utrecht HS) and currently live in LA. Sorry to hear about the local small business closures on 86th St…. my old stomping ground.
    Keep up the fine journalism and thanks.

  2. Rents are high, minimum wage is high, most shopping done online. Small businesses can’t survive.

  3. Not surprised. All the smart people got out or are leaving Bay ridge. Too many people walking around in beekeeper uniforms.

  4. a large property in brooklyn’s bensonhurst neighborhood near 86 st has been vacant for 5 -6 years now, & the landlord is asking $43,000 per MONTH… who can pay that kind of rent? a franchise like starbucks, outback or a supermarket – maybe? anyway the landlord called me back with a reduction of $5,000 for $38,000 per MONTH.. too bad -there was an incredible shop there before — always filled with people… owner would rather keep it empty than make money. another commercial site on new utrecht ave near 18th ave rents the basement for $10,000 and stated the top two floors are rented. that was in october 2018 and it is still empty… GREED is a strange bedfellow

  5. Michael Jackson that’s because you can’t buy coffee on Amazon lol.
    Rents are high leases are up. Its hard to open a new place.

  6. I see from all the so called intelligent observers that no one has a clue on why do business close! The only answer is the high rentals, thanks to the city for raising real estate tax every year, the city wants to keep their hands in landlords pockets and hence the landlords in turn they have to make up the difference from higher rents thus making it a very hard to have a profitable business. And that is the only reason for empty storefronts

  7. You can judge the quality of a community by the number of bodegas selling lottery tickets and nail salons.

  8. Stores are closing because bosses don’t want to pay a decent salary and they’re finding it harder and harder to get good workers yes they get the Immigrant Mexicans for $2 a day but even they know that minimum wage is 15 an hour and they want to get paid so they could live store owners don’t have workers comp insurance they don’t pay all the bills they’re supposed to pay they try skating by and giving the employees less all the while they are taking fancy vacations and driving around in luxury cars and then they are just defaulting on their loans so the store owners don’t lose at all by closing up it is the work is no one is standing behind the work is 15 an hour we need that minimum wage

  9. The numbers the BIDs cite seem low given what I see when walking the avenues. I could totally be wrong and the data correct but I doubt it.
    Is “beekeeping suits” is a reference to Muslims? Yes, there’s a large Muslim population in Bay Ridge and they are fantastic neighbors. They run many businesses, keep their homes tidy and are a vital part of the neighborhood’s diversity. This is NYC folks, there are plenty of places all the racist and islamophobes can move to if they don’t want these decent folks as neighbors.

  10. I’ve been retailer on 5th for almost 44 good years. Streets WERE always crowded with people shopping or window shopping. Stores for baby furniture a nd hosiery stores, stores for wedding dresses and gowns, toy stores, clothing stores and more and more. It is no more. No stores to window shop or shop. Shoppers can be counted on a spring Saturday. ( I have many times). Drivers tell me how difficult parking is and meter people constantly giving tickets. Why should anyone shop on such an avenue like 5th unless there is a specialty store they want to go to. ( Very few still exist) nail salons fruit stores, massage parlors, grocery stores, hair salons are in great abundance. In addition, landlords who are also retailers are FORCED to pay higher real estate taxes for the BID program which has not increased shoppers to shop. Trust me, I know.

  11. All missing the key point, the number one reason is the unfair lease renewal process, which prevents fair and reasonable rents for at least a ten year lease. Without a ten year lease, and maybe even an also a 5-10 year option, as was always the norm, how could any business owner invest in a new business or renovate an existing one when the landlord only offers month to month or a year or two renewal at exceedingly high rent? And for everyone’s sake of information the Small Business JOBS Survival Act is 100% legal with 30 currently sponsors and the City Bar Association reference is an old re-released report that is not on point and proven invalid too by a legal panel of review experts in this field. Maybe Bay Ridge should encourage their council member to join and sign on too and become number 31! And yes many people are shopping on line today, but the facts and hype can be misleading as even with the huge growth of on line shopping the strong majority of retail spending is still at stores and shops etc. Want facts, not Wall Street, or BIG Bank, City fake facts controlled by REBNY? Then, learn the truth. Go read about the Lease renewal CRISIS across all five boroughs. http://www.saveNYCjobs.org Thanks all and support your local business.

  12. Many thanks to all the folks who mention what the article interestingly leaves out – HIGH RENTS as a reason for store closings. Stores need commercial rent control to protect them from greedy landlords!! Also thank you Michael for asking what Vinnie means by “beekeeper uniforms”. Wondering the same thing myself. Also wonder why Vinnie would think “all the smart people” are leaving Bay Ridge; what a ludicrous statement.

  13. If I had to guess, I would think that Vinnie was bemoaning the Parkslopeification of Bay Ridge. For the record, I love organic honey, so any Beekeepers with extra please PM me.

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