Can Small Stores Survive in New York?
09.10.2006, 10:33
With large national chain stores having solidly established themselves in much of the city, Duane Reades and other discount drug stores occupying spaces once used by mom and pop businesses, and banks appearing on every street corner, many locally owned shops have shut their doors.
Vilnius Hotels
Recently, the Municipal Art Society sponsored a panel discussion on locally owned retail in New York City: Can it survive and what can, or should, be done to save it.
Creating a Market
The 8 million people in New York City are being jumped on by the 292 million people who live on the mainland of the United States. They are trying to push their retail ideas on us, and it’s not good. We have to stand up to this, keep our neighborhoods strong and keep merchants in business. But we can do it. The opportunities are unlimited.
Even with the chain stores, you can still go into the retail business and be successful in New York. Maybe we have to cede the rights to have these mall-type stores in Manhattan because, if I’m a landlord and I can get a chain or a bank or a pharmacy to pay a high rent, I would probably think about it. But there are great facilities available in the Bronx and in Brooklyn. There is always something in each neighborhood that is available and can be developed.
You should take some of the parking garages around the city, get rid of them and let the city make that into space exclusively for small businesses. We don’t need cars. We don’t need parking. We have fantastic public transportation. If we got rid of cars and took all the lots and made those into locally owned retail we could go some place. We could set up pushcarts again. We would be healthier, and we would be able to have great shopping.
Chelsea Market
Chelsea Market provides an example of how this can work.
In the middle of the 1990s I was fortunate enough to find the old Nabisco buildings on the West Side. And I was even luckier to have investors in Tashkent, Uzbekistan and in Siberia. When I told them what we had purchased for them in Manhattan, the Russian said, “Aha, the capital of the United States.”
They allowed me to do what I wanted to do with respect to the ground floor of the building. At that time, we would hold meetings, with engineers, architects and construction people. My architect was from Holland. He lived in New York. My structural engineer was from Ireland. He lived in New York. My electrical engineer was form Russia. He lived in New York.
At these meetings, I was the only one who was born in New York City. And I realized one of the great strengths of our five little boroughs is their ethnic diversity. And I said we have to take advantage of that.
And we have to run counter to what everyone else is doing. I was able to convince my investors that just making a lot of money from retailing was not the function of a great, old building of historic significance in New York City. There was something more that the people had to have. So my daughter and I, working together, set some standards.
We said first, every one of our tenants has to be a family owned business, at least half of the businesses have to be female owned, the owner of each business and its executive offices have to be located in Chelsea Market, and the tenants have to be both wholesalers and retailers. That is because when the economy in the city was good, their wholesale business selling to restaurants would be good. But when business slowed down, as it did after 9/11, the tenant could stay in business because their retail operation would cater to the people who were not going out to restaurants.
It was a bit crazy, but it was a social experiment. You have to have a social conscience. But it worked out very, very well.
We have Manhattan Fruit, which did business out of a truck and a very small freezer on 15th Street before it came with us. The Fat Witch Brownies operated from her kitchen. And the man who makes the gift baskets ran his business from his living room.
If you create a market – a concentration of people in similar businesses – you can create stability and establish a location where people will feel comfortable shopping without name stores. Every single tenant in that building that started nine or ten years ago is still there. Our biggest problem is that we don’t have enough room.
The market has to be an experience. At Chelsea Market, you are walking through a street that happens to have a roof on top. I kept it very cool in the winter and warm in the summer because you have to feel as if you’re outside.
We located the tenants haphazardly. Each was chosen for a very, very strong reason. “Can you get what this tenant makes any place else?” And if the answer was no, that was the tenant that we wanted. And that’s why people come back.
We created a neighborhood by having the owners on premises. If you had a little complaint about any of our tenants, they would be in your face in 30 seconds. “You don’t like the recipe? My grandmother used this recipe. She used it in Russia. How can you say it’s no good?” And the owner would take you into her kitchen and show you the ingredients and how she prepares them.
We brought all of the production to the front where people could see it. When we first opened, I could gauge the amount of customer activity and acceptance by the number of nose prints on the glass in front. People would come in with notepads and become specialists in cooking. People come in and watch today the way Amy puts her bread together. And it works.
There was no standard for entrances. I said just keep it clean and decide how you want to run your businesses. The last thing that can fail is where you run your business. You’ll give up your home before you give up your business because you have to eat.