Vacant storefronts hit Chelsea and Greenwich Village hard as businesses battle higher rents

A vacant retail store in the West Village. (Photo by Gabe Herman)

BY GABE HERMAN | As retail vacancies have remained an ongoing problem in Lower Manhattan neighborhoods, Comptroller Scott Stringer has released a citywide report showing the broader scope of the problem, including empty retail space having doubled in the last decade.

The report found that since 2007, the city’s vacancy rate rose from 4 percent to 5.8 percent, and that vacant retail space increased by 5.2 million square feet.

While the neighborhoods with the top vacancy rates were in the outer boroughs, the report listed several Manhattan areas with top vacancies when measured by square footage.

This included Chelsea South at number eight on the list, with 254,552 vacant square feet, and Greenwich Village/Soho at number seven with 265,230 square feet of empty space.

“New Yorkers have all seen the signs of our changing economy in the last decade, as vacant storefronts have become all too common and neighborhood institutions have fallen by the wayside,” said Stringer when the report was released in late September. “Our report shows the phenomenon of retail vacancies from one end of the city to the other.

A vacant store last year on Bleecker Street. (Photo by Gabe Herman)

Stringer’s report outlined three key causes of retail vacancies. The rise of internet shopping has taken away business and caused retail to shift away from selling goods and toward services, including restaurants and bars, the report said.

The report also found regulatory hurdles, including delays in businesses being able to get liquor licenses and delays in alteration permits from the Department of Buildings.

Another cause cited was rising rents. The report found that rents rose an average of 22 percent citywide from 2007 to 2017, and singled out Soho as a more severe example, where rents doubled during that time.

Rents did fall in some areas, however, including in the Financial District, the report found.

Mark Dicus, executive director of the SoHo Broadway Initiative, said that Soho rents actually peaked three or four years ago and have been coming down. He said high rents can be adjusted based on market demand.

“I think that’s the easiest thing to fix,” he said.

Dicus agreed with problems caused by liquor license delays for businesses.

“That timeline makes it difficult,” he said, and added that there is a demand for more places to eat in the area, especially with so many workers looking for a lunch spot.

There has certainly been a big move to more online shopping, Dicus said.

“I think you’re seeing a fundamental shift in retail,” he noted. Some larger brands have consolidated or moved away from brick and mortar stores, Dicus said. “A lot of retailers are rethinking how much space they need,” he added.

Stringer’s report said that solutions to retail vacancy should include addressing regulatory delays with a “multi-agency task force” that would be a single place to help new businesses with navigating regulation requirements. Another proposal was lowering costs by giving tax credits to independent retailers in areas with high vacancy rates.

5 Responses to Vacant storefronts hit Chelsea and Greenwich Village hard as businesses battle higher rents

  1. Everyone is quick to blame the landlords for the vacant retail, but they’re only one factor. The move to on-line retail has been a huge blow. And, of course the city and state governments are doing more than their share to kill retail, with ridiculous levels of taxes (see the commercial rent tax), vast and increasing levels of regulations that are difficult if not impossible to comply with (backed up by big fines), not to mention the increased minimum wage that crushing a lot of business (see article below.)

    https://nypost.com/2019/09/29/15-minimum-wage-hike-is-hitting-hurting-nyc-restaurants/

  2. Why not allow landlords in Landmark areas freeze their taxes . They can’t increase the size of their buildings for they are in a Landmark area yet taxes and costs always go up while renting space can take a full year with free rent concessions. Then maybe they would lower rents. Freeze taxes in Landmark areas for ten years on buildings with less then ten apartments.

  3. There are prime locations in the Times Square and theatre district, including corner spots, that have remained vacant for years. The former “Prime Burger” spot across 51st St from St. Patrick’s is an example. How can a landlord afford to carry a vacant spot for years? He wouldn’t, at some point, lower the rent? What’s going on there with taxes? Do vacancies earn a tax break? Is it somehow profitable not to lease out theses spaces?

  4. Do not be fooled by this study. Long established successful stores have been forced to close before Amazon or enet shopping even existed. The businesses close because they have no rights when their leases expire and the hyper real estate speculation with bidding between banks and chains for prime space wrecked the retail rent market. What the public see today are the empty stores which are the “canary in the mine” for a failed small business policy. A pro real estate policy which lawmakers like Stringer and Johnson did nothing
    to pass the Small Business Jobs Survival Act to give businesses rights when their leases expired. This study was nothing but the continued rigging at City Hall to keep all the rights in the hands of the landlords. The same landlords who have gotten rich while the merchants are being destroyed . The same landlords filling the campaign coffers of corrupt politicians to do fake studies to keep the status quo.

  5. We need commercial Rent Control for “mom & pop” businesses…

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