Thursday, February 26, 2009
Weiner Calls for Federal Help for Small Businesses
STIMULUS EXPECTED TO BOOST LENDING
By Conor Greene
With small businesses throughout Queens closing “at an alarming rate” due to the staggering economy, Congressman Anthony Weiner is hoping that money included in the federal stimulus plan will help jump start the fortunes of small store owners.
“Small businesses here in Queens are really struggling,” Rep. Weiner (D-Queens) told a group of reporters at a press conference last Thursday outside a string of vacant storefronts on Austin Street in Forest Hills.
The congressman’s staff recently conducted a study of 10 main shopping districts throughout the borough, including Myrtle Avenue, Woodhaven Boulevard, Sutphin Boulevard and Jamaica Avenue, and found at least 211 vacancies. According to Weiner, that number represents a 12% vacancy rate among community stores in Queens, which he called the “lifeblood of the community.”
The current vacancy rate represents more than twice as many as last year, with each neighborhood losing an average of 20 stores, according to the study. “When the economy catches a cold, small businesses catch pneumonia,” said Weiner, who is running for mayor this year. “Too many community shops… are hit hard by this downturn. The stimulus package will help jump start Queens businesses.”
A concern for Weiner is the overall effect vacancies can have on a shopping district like Austin Street. “It can have ramifications for the entire block… It leads to the mood of the whole community being down,” he said.
Aside from the “knee-deep recession” the city is facing, Weiner chalked the small business owners’ struggles up to landlords who continue to charge sky-high rents and “the city’s relentless pursuit” of shoppers committing parking violations. “The rents are not coming down with the economy” and the city needs to create a “more tolerant environment” for merchants and shoppers, said Weiner.
To help ease the pain small business owners are facing, the federal stimulus package contains $750 million to improve existing Small Business Administration loan programs and to create more loan opportunities. It will also double the amount owners are allowed to write off for equipment and property expenses to $250,000 and increase the carry back period of net operating losses from two to five years.
“Hopefully the stimulus will provide some help,” said Weiner, who was joined at the press conference by Javier Valdes, whose family owns a chain of four Latin Cabana restaurants in the borough, including on Austin Street and in the Queens Center Mall.
“It’s been rough because the rents are high,” said Valdes, who said he pays $6,000 a month for a 400-square-foot space, a rate he called “astronomical numbers for a neighborhood that is not doing as well as it was.”
“This was our number one store when we opened two years ago. It’s a possibility that we may be shutting down,” said Valdes when asked how his business was doing. “Once they get to here, they turn back around,” he noted of shoppers who don’t make it all the way down Austin Street because of the row of vacant storefronts near the intersection of 72nd Road.
Recently, business at the Forest Hills location is down about $3,000 a week, which “for a small business is a lot,” said Valdes, and the mall location is down $10,000 since December. “They are all helping each other at the moment,” he said of the four stores.
Austin Street’s vacancy rate of about 5% (ten vacancies out of 181 storefronts) is lower than other areas such as Woodhaven Boulevard (17% or 9 vacancies out of 52 storefronts between 64th Road and the expressway) and Jamaica Avenue (23% or 80 vacancies out of 335 storefronts). Still, “there is a tipping point on streets like Austin,” stressed Weiner, at which point the area is no longer attractive to investors. “It’s about where we are at now.”
At least one other small business owner said Austin Street’s struggles have more to do with high rents than the economy. “This guy is just greedy. The street’s not in great shape but I don’t think it’s this bad,” said Marla Cornego, referring to the three vacant stores in front of which Weiner held the press conference.
“He’s greedy – that’s why it’s empty,” continued Cornego, who owns 5 Burro Café on Austin Street. “If the landlord weren’t so greedy and allowed you to make a living… This is not indicative of the rest of the street.”
According to Cornego, the owner of the hair salon that formerly occupied one of the empty spaces paid $10,000 a month at that location. She has since moved down the block to a larger space that costs her $6,000 a month, said Cornego.
A call to Sutton Garrett Real Estate, which is seeking tenants for its Austin Street property, was not returned.
While Grand Avenue in Maspeth wasn’t included in the congressman’s survey, local business owner Tony Nunziato said it appears that newer stores are struggling the most. “The larger, newer stores that came in within the last year or two, some of them are closing,” said Nunziato, owner of Enchanted Florist. “I would think they’re the ones hit the hardest because they didn’t have time to acclimate.”
Nunziato expects the next six months or so to be make-or-break for many small businesses.“October was when everything really started to go bad, so everyone will hold on for six months. By the summer, that’s when you will see who can hold on. Up to June I believe is the most crucial.”
“The beauty of Maspeth is that most of the stores have been here a while and they serve the town,” added Nunziato. “When residents support [the local businesses], then Main Street thrives. It is rough definitely, every business is down, but they’re holding on.”
Weiner warned that this is a problem that will continue to get worse without help from the federal government. “This is not just a passing fad. It is a trend we’re seeing all over Queens,” he said.