Small Business

His View: The real cost of high rent for small business | Opinion

The streets of Greenwich Village were still buzzing and alive with activity when I lived there during the summer of 1984. My tiny studio was a just few blocks north of the Cornelia Street Café, a restaurant that has turned into a rallying cry for those who want to hang onto neighborhoods with character.

While my life trajectory saw me say goodbye to Gotham and hello to Moscow, Idaho, I continue to find myself amongst kindred spirits who desire to live near to personable spaces and small business establishments with personality.

Cornelia Street Café has thrown in the towel. Their tussle with the landlord didn’t end well for them. They featured poets and jazz musicians and served Thai bouillabaisse, and the graph of their rent expenses over time resembles a hockey stick: from $450 in 1977 to what is now $33,000 a month.

“The three of us who opened it were all artists,” says owner Robin Hirsch, and as for a business plan, he did what so many did then: “We’ll open and see what happens.” They adapted to the tastes of the surrounding neighborhood and ended up becoming a cultural fixture.

This is not only true for the consumers with fickle tastes and the marketers who are happy to court the fickle, but also for property developers. Sole-owner developers with a personal interest in the character of the neighborhood gave way to the real estate investment trust – REIT.

A tipping point was reached. Mergers turned into bigger mergers. Property development behemoths like Kimco Realty and Simon Property Group are listed on the New York Stock Exchange. They devour neighborhoods; they own politicians. And to understand their business practices, their banking relationships in particular, is to conjure up the Federal Housing Administration’s practice of redlining in the 1930s.

Pay attention, class, and get your pencils out: at $15.50 a plate, how much Thai bouillabaisse does Robin Hirsch have to sell to make next month’s $33,000 rent payment?

Any time you have small neighborhoods and big business crossing swords, you are bound to have lawyers. Cornelia Street Café’s conundrum and the thousands of other small business owners across the country who have already been swept aside by the likes of Starbucks and Rite Aid are organizing for more courtroom drama.

In New York, this has taken the form of a bill before the City Council: Small Business Jobs Survival Act. “We have a small business crisis in New York City, and it’s not about Amazon or high taxes, but about rising rent,” says the founder of the Friends of SBJSA, David Eisenbach.

Commercial rent control in New York was lifted in 1963, and the primary aim of the SBJSA is to at least provide tenants with bargaining power alongside longer term leases.

The likes of Kimco Corporation and its friends at the Real Estate Board of New York claim “this bill will kill jobs, kill ingenuity, and ensure the homogenization of retail in NYC.” Its smug attorneys point out that the Fifth Amendment prohibits government from taking private property without just compensation.

The Center for an Urban Future is keeping a tally of the dehumanization of retail; at last count, New York City has been blessed with 612 Dunkin’ Donuts, 433 Subways, 260 Duane Reade/Walgreens and 240 Starbucks in Manhattan alone – perhaps 241 if the Cornelia Street Café lease is bestowed upon them.

Can ingenuity and the spirit of entrepreneurship ever be killed? As for the homogeneity of our Main Street storefronts, neighborhoods are coming together for some serious talk – outside of the courtroom.

I quietly thrill to see boisterous high schoolers crowd into our local customer-owned Moscow Co-op for lunch.

Will they and their children concern themselves with small business rents, with a charmed place to gather for conversation and community? Or is to be cheese stuffed crust with extra pepperoni ordered online?

After years of globetrotting, Todd J. Broadman finds himself writing from his perch on the Palouse and loving the view.


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