It’s not just Amazon causing retail woes, local landlords say

Williamson Abrabson, of Buchbinder & Warren, left, and Mark Kostic, vice president of asset management at Brookfield Properties, shared their perspectives on the problems plaguing Village retail stores. Photos by Sydney Pereria

BY SYDNEY PEREIRA | Stretches of vacant storefronts have become a jarring everyday reality in Downtown Manhattan, with Bleecker St. the poster child of this growing retail crisis.

But some landlords and developers with properties in Community Board 2’s district have some explanations for why the retail blight persists despite apparent plummeting commercial rent — and they aren’t just blaming it on our having entered the Amazon era.

“It’s easy to hang our hats on e-commerce and say that e-commerce is going to destroy all of retail,” Jonathan Ruhl, the owner of Ranger Management, said at a panel discussion organized by C.B. 2’s recently established Economic Development and Small Business Committee meeting last Thurs., Sept. 27.

Online shopping is a factor, he acknowledged, but landlords can sometimes face pressure from their investors, too.

“If you have private equity and you have some extremely high expectations or you’ve made some promises to these people,” Ruhl said, “I think that some of the things these companies feel that they have to do is hold out on the rent. Because, if you actually put somebody in there that’s 50 percent of the original rent, your partners [or] private equity is going to go crazy.

“They may have their hands cuffed,” he added. “It’s a dangerous situation from a landlord perspective. But it unfortunately does directly influence the amount of vacancy on the block.”

Brookfield’s Mark Kostic listened, left, as Jonathan Ruhl, owner of Ranger Management, offered his thoughts on the challenges landlords face in filling their retail properties.

On Bleecker St., in particular, a cycle of retail blight keeps small businesses from trying their luck in spaces where others have already failed.

“It’s the stigma,” said Mark Kostic, vice president of asset management at Brookfield Properties. “They’ve seen retailers go there and die — literally.”

Kostic has optimism that, in the long term, the block will rebound and succeed.

William Abramson, brokerage director at Buchbinder & Warren, said pop-up shops might be a part of the solution to at least lessen that stigma.

“You do what you can do to get pop-ups in there and activate the streets and get people there,” Abramson said. “Because if you don’t have them, you get homeless people there. It’s dark — no activity.”

At the same time, Abramson admitted, “Part of the downside of having these pop-ups, frankly, is that the tenant isn’t invested in the community.”

Panelists floated some solutions as the beginnings of perhaps more community engagement with landlords in the future, but nothing was concrete. Among the suggestions were a local “Restaurant Week” or encouraging New York University not to build its own cafes for its students.

Ruhl said adding a few “destination” spaces could help draw people to Bleecker and other streets — like Christopher and Eighth — currently suffering from shuttered stores and a lack of shoppers.

“We’re talking about increased foot traffic,” he said, “where people in other neighborhoods say, ‘You know what, I really want to head down to Eighth St. tonight.’”

The real-estate professionals were doubtful that what they termed “commercial rent control” or a storefront vacancy tax could solve the neighborhood’s retail woes.

Abramson said commercial rent control would just “enhance” the problem rather than fix it. Ruhl chimed in, noting that a vacancy tax — which the mayor indicated support for in March — ultimately would not affect the bottom line for big companies.

Michele Varian, who owns a boutique at Howard and Crosby Sts., said landlords and retailers on each specific block should work together to identify what it needs to create a synergistic mix of commercial uses — like a sandwich place for employees at neighboring shops to buy lunch, or a 24-hour deli.

A longtime small business owner, Varian spearheads the Downtown Independent Business Alliance, which represents several dozen merchants. To her, the problem isn’t so much that Internet shopping is killing brick-and-mortar retail stores. Rather, Varian charged, landlords are simply “tone deaf” to retailers’ needs.

“It’s not the clicks that are hurting bricks,” she said. “It’s the removal of a sense of urgency.”

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