Nov

15

From the Issue: The Chain Gang

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From the November issue of The Blue and White, we bring you a piece about the growth of chain stores in Morningside Heights written by Lydia DePillis, James Downie, and Eliza Shapiro. Hard copies will be on the (nonexistent) racks on Monday!

chains“How many banks do you need on one block?” asked Morningside Heights Assemblyman Danny O’Donnell. The answer—judging by the Washington Mutual, Citibank, Chase, and Banco Popular, all of which are stationed on Broadway from 116th St. to 110th St.—is about one per block.

O’Donnell has lived in Morningside Heights for more than a decade, and has become increasingly concerned about what he calls the “drugstorization” and “bankization” of the neighborhood.

Lately, an increasing number of Morningside’s independent businesses have closed or relocated and been replaced by chain outlets that you might find in Nolita or New Jersey, Staten Island or San Francisco. The Wrapp Factory is now Empanada Joe’s. Casbah Rouge is now Chipotle. Kim’s Video is now Ricky’s. The bars Mona and Roadhouse are now Pourhouse, an offshoot of the original Village Pourhouse, located near NYU. Two years ago, the West End became Havana Central, which has branches in Times Square and Union Square.

The prevalence of chains cuts both ways: It can be a natural consequence of neighborhood development, as businesses and new franchise owners decide that the consumer base can support the outlet. Harlem crossed a threshold in 1999 when Starbucks opened a store on 125th St., and the growth of chains has spread to West Harlem and up to Hamilton Heights.

But with remote ownership, a chain store is unlikely to donate snacks to a children’s library read-aloud, or underwrite a Columbia student group’s event, or advertise in small-scale student publications. While the Columbia Daily Spectator has printed ads from Chipotle, Havana Central, Pinkberry and Ricky’s, none of these businesses have advertised with other publications this year.

“Chains are way less likely to advertise in non-Spec publications,” said Fed publisher Sophie Litschwartz, CC’09, who has tried unsuccessfully to get ads from a number of chain stores on Broadway and Amsterdam. Empanada Joe’s manager, for example, isn’t the person who deals with advertising. “When you try to go the next step in the chain, they’re not interested,” she said.

According to O’Donnell, it would be unreasonable to expect higher-ups in national chains to see the benefit of investing in the community. “It’s not just a question of who it is, but who’s making these decisions” he said. “No matter how good a manager is at RiteAid, they’re still just a cog in the wheel of RiteAid.”

O’Donnell said that he receives regular complaints about the growth of chains from constituents, who say chains make the area less attractive for residents and prospective residents alike.

“It is a very, very bad thing,” Carolyn Birden, head of the West 110th block association, wrote in an e-mail. “Given that so many students are from mall country, I wouldn’t be surprised if the chains were being courted.”

While few applaud the chains, many see their growth as a sign of the neighborhood’s progress. Wassim Malaeb, who has worked at Samad’s for 25 years, said that, when he started working there, “you didn’t want to walk around the neighborhood,” it was dirty and dangerous. Now it looks “more like a middle-class hangout.” Hong-Shou Ma has been the owner of Janoff’s, a typewriter and stationary store, since it opened in 1980 on Broadway and 112th. He said that when he started, the neighborhood was “filled with drug addicts and homeless people,” and the chains “come along with the prosperity we have enjoyed.”

The Morningside village is a constructed reality. Columbia, the largest landowner in the area, has a stated mission of fostering locally-owned businesses and keeping the neighborhood balanced. This often involves renting spaces at below-market rate prices in order to keep these independently-owned shops in business. In 2006, a storeowner told the Spectator that the University requires proprietors to submit business proposals and comply with certain stipulations in exchange for their favorable rental terms.

But while Columbia owns much of Morningside Heights, it does not own all of it; most of the side street buildings are privately owned. With the exception of a few buildings, Broadway’s storefronts are owned by Columbia and University affiliates between 111th and 123rd streets. On Amsterdam, Columbia owns the majority of storefronts between 115th and 122nd.

As a landlord, Columbia insulates the neighborhood from the architecturally homogenizing influence of chains. “A lot of the architecture depends on what the store owner wants,” said Professor Andrew Dolkart, the newly appointed Director of Historic Preservation at the architecture school, and author of a history of Morningside Heights’ buildings and development. “Chain stores want to have the cookie-cutter appearance, but landlords get to determine how their fronts are shaped.” The University has been an active landlord in this regard. “Columbia has done amazing restoration work on their storefronts over the last 10 years,” Dolkart said, “They’re much more conscious of the look of the buildings. Any store that moved in would have to conform.”

Though the University would not answer specific questions for this article, the Public Affairs office released the following statement: “Columbia has a working policy of supporting locally-owned businesses and while some businesses may be part of a chain, by and large we continue to favor locally-owned business. Columbia considers a variety of local needs before making a decision on the type of business that can become a business tenant.  Beyond that, we do not comment on our negotiations.”

However, Columbia wavers in its support of local stores. Chains in University-owned buildings include D’Agostino, Morton Williams, Washington Mutual, Chase Bank, Aerosoles, and Ricky’s. Campo, which replaced Pertutti, is the only one of its kind but is owned by an outfit called the Restaurant Group, which controls four other eateries in the city.

To many students, the most puzzling example of a chain’s recent arrival is Ricky’s, the garish costume and makeup merchant that opened briefly for the Halloween rush before closing again to construct its permanent, makeup-centric interior. Ricky’s replaced Kim’s Video & Music, the uptown outpost of a now-defunct St. Mark’s Place staple that also closed due to declining revenues in the age of Netflix.

Occasionally, Columbia does respond to community desires. Dolkart said that about a decade ago, when the University was looking to fill the storefront, it circulated a survey among Morningside residents.  When they expressed a desire for a liquor store, International Wines and Spirits was born.

chains“The explosion of chain stores is relatively recent,” said Dolkart. “They all came pretty late to New York. In some areas of the city–SoHo, Broadway, the Upper East Side—they’ve become dominant.”

According to Community District 7 chair Helen Rosenthal, 27 percent of the 560 stores on Broadway on the Upper West Side between 59th and 110th are chains.

A summer 2008 study conducted by the non-profit think tank Center for an Urban Future found that Starbucks and Duane Reade were the biggest chains in Manhattan, with 186 and 139 stores, respectively. Duane Reade’s growth has been rapid, but Starbuck’s growth has been phenomenal. It opened its first store in Manhattan on 87th and Broadway in 1994, when Duane Reade already has a sizable foothold.

The driving force behind the spread of chains is high rents, which rose gradually after the post-9/11 slowdown, and peaked in the months leading up to the financial crisis in October. The average market rent for Manhattan commercial real estate in September 2008 was $65.40 per square foot, up from about $40 in early 2005 (at this rate, a store the size of the Starbucks on 115th St. would pay over $110,000 per month in rent). Large national chains have the capital to enter these markets before a their franchise starts making money, but it’s a bigger risk for independent owners.

“Up until 10 years ago, no one would pay these prices,” said Peter Arndtsen, chairman of the Columbus-Amsterdam Business Improvement District. He added that lately “stores stay empty for a long time” because landlords hold out for the businesses that can pay the market rate for their spaces, as well as remain stable for the duration of a 20 or 30-year lease.

The neighborhood is somewhat insulated from economic volatility because Columbia doesn’t live or die with Wall Street. Its students are captive customers who are often unmotivated to spend their cash anywhere besides Morningside.

Morningside’s demographics also work in favor of the chains. Census data for the Upper West Side (which the immediate Columbia area matches more closely than the rest of its own community board district, which extends up to Washington Heights) show that the percentage of residents under age is 18 rising. That means more children and more families. Morningside has also become more affluent: In the last decade, the average income has risen 18 percent.

Anna Perez, an employee at Morningside Books since 1979, spoke wistfully, comparing the neighborhood now to the way she remembers it two decades ago, when it was stocked with cheap restaurants and stores. In the 80’s, she said, Papyrus—Morningside Books’ previous incarnation—”sold books like crazy,” but now fewer people are buying.

Sometimes, businesses can survive by moving off the avenues. Rack and Soul on 109th moved around the corner, to be replaced with a Verizon Wireless store.  According to owner Michael Eberstadt, the location is less visible to passersby, but he’s paying about half as much in rent. Moving further uptown is another survival tactic. Upper Broadway has “cheaper rents and is much less crowded than Broadway” said Jenny Ko, who owns the patisserie Chokolat on 124th St. and Broadway.

As the influx of chains continues, independently owned businesses have had to adapt to survive. In 1999, Essam Moussa opened Global Ink, a magazine shop that stocked every kind of publication from all over the world. Eight years later, sluggish sales forced it to close. In its place, Moussa opened a children’s shoe store called the Shoe Tree—a response to both rising rents and the increasing numbers of children in the neighborhood. “Buying magazines was not people’s first choice,” Moussa said.

It would be an understatement to say that the next several years will be difficult for Morningside’s small businesses. For some, yielding to market forces as Global Ink did, could be the key to staying alive. But many of the small shops will have to hope that Columbia keeps rents low. Recently, Morningside Books posted a note in its store saying it was in trouble. In the evenings, the store’s owner, Peter Soter, often stands outside, hands in his pockets, surveying the neighborhood he grew up in. His store is one of the many that trust in Columbia’s goodwill—the University has given him repeated extensions on rent payments—but depending on Columbia is inherently risky.

Should Morningside Books fail, it would be tempting and profitable for Columbia to bring in a chain. It’s difficult to know what to expect of the University when it advocates for small businesses, but brings in a Ricky’s.

By Lydia DePillis, James Downie, and Eliza Shapiro 

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4 Comments

  1. financier

    this is a decent twist on the standard gentrification trend piece, but I'm sure the authors realize that some of the conventions of the genre have been thrown out the window by the financial crisis. bankification is at least one trend set to end in new york with the onset of the financial crisis, if only because corporate consolidation means that it makes no sense to have two branches of the same bank virtually next to one another. the retrenchment of chains like starbucks is likewise more affected by broader trends (the need to cut costs across the board) than local ones - even if two morningside starbucks are profitable, they might determine that overall patronage won't drop off that much by slashing the workforce and overhead of one location.

  2. anon  

    While I do not necessarily support more chains, it is annoying that there are not a few more places - whether locally-owned or chain - where you can grab a quick meal for cheap. There are just so many sit-down places and students don't always have time for that.

    Also, they should expand the Starbucks or more coffee shops should open up in the area. All the shops are always packed or just don't have adequate seating for studying.

  3. anon2  

    Who gives a shit about morningside books? probably the same sort of person who liked eating at wrapp factory and casbah rouge. i for one welcome our new chain-store overlords.

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