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Dear Fellow Tribecans…
The closing of so many small businesses in recent months has left Rachel Thebault of Tribeca Treats as dismayed as the rest of us. Here she offers a business owner’s perspective—along with thoughts on what we can all do to help our favorite restaurants, services, and shops.
Rent in Tribeca is an obvious hurdle for anyone who wants to open and maintain the small businesses that have come to give Tribeca its character. But it’s not the only hurdle—and while some property owners may be as greedy as people imagine, many other landlords, mine included, are quite reasonable. There is, after all, an economic benefit to having the consistency of a good tenant in a space, even if it’s at a slightly below-market rate. This doesn’t change the fact that all other costs beyond rent are dramatically increasing: labor, electricity, insurance, and commodities, to name a few. Compared to chains, small businesses have a harder time increasing their prices to meet these costs, in part because we may already have higher prices, and in part because we have to look our clients in the eye when increased prices are delivered.
In my experience, increasing traffic and volume is the best way to make a profit, as it allows us to leverage monthly operating costs. Tribeca has experienced lots of growth over the past several years, but this has not necessarily turned into the volume growth that we small businesses had anticipated. With the new residential and office buildings has also come lots of new competition, and tourists and others new to the neighborhood might choose to flock to businesses with more name recognition, rather than explore some of the great independent shops peppered throughout the neighborhood.
So what can Tribecans do to help support their favorite restaurants and shops? Obviously remaining a loyal customer is great, but we recognize there are only a certain amount of, say, cupcakes you can personally buy each week. Short of monetary support, word of mouth is extremely important to small businesses. Talk us up to your friends in Tribeca and around the city. If you’re inclined to do so, post about us on social media, comment about us in appropriate blogs, and write positive online reviews. Hopefully, some grassroots support from friends and neighbors will help put an end to the bloodbath of small businesses we’ve seen over the past few months. I certainly will resolve to do what I can to support the businesses I love.
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Well done, Rachel! Couldn’t agree more. The departure of all of these local businesses over the past several months will dramatically change the face of the neighborhood as bigger chain stores move in. Shop local! Support your local businesses – protect what you love most about Tribeca.
As a former restaurateur and a real estate agent now , I could not agree more. Reality is that when landlords do a break even analysis they rather have vacancy i.e an empty store front for months sometimes a year but rent to someone who pays market rate rent. An average mom and pop business can no longer afford Tribeca market rate. And worse, mom& pops are unable to negotiate leases that let them get out but chains have more muscle than a landlord so they tend to have leases with exit options. A Starbucks can try out a location and close if it does not hit their sales numbers but a mom and pop heads to bankruptcy when they close.
We need a grassroots campaign aggressively encouraging “buy local” and “spread the word” in lower Manhattan. If the residents don’t step it up, all they will see is a sea of ubiquitous chains in the hood.
“Reality is that when landlords do a break even analysis they rather have vacancy i.e an empty store front for months sometimes a year but rent to someone who pays market rate rent.”
— It is more complicated than that. The breakeven analysis of whether to renew is about more than just the vacant period of no rent. It includes a brokerage commission–as you are no doubt aware–plus typically a free rent period for construction / renovation. Some of the more recent notable forced vacancies in Tribeca reflect a shortsightedness on the part of landlords and a misunderstanding of what the market will bear. Other landlords have long-term tenants with far below market leases and the landlord gets not much of a break from NYC on real estate taxes for its generosity, etc. The tenant can charge up to what the market will bear for its product or service daily, but it pays a fixed rent set years in the past.
” An average mom and pop business can no longer afford Tribeca market rate.”
— While Tribeca does seem to be heading the way of Soho, i.e., an open air shopping mall for tourists and not for locals, there is a diversity of mom-and-pop businesses and a diversity of Tribeca locations.
“And worse, mom& pops are unable to negotiate leases that let them get out but chains have more muscle than a landlord so they tend to have leases with exit options. A Starbucks can try out a location and close if it does not hit their sales numbers but a mom and pop heads to bankruptcy when they close.”
— Any NYC broker worth his or her salt should know what a “good guy” guaranty is. They are increasing common in NYC. A “good guy” guaranty is a limited Personal Guaranty from either the principal or officer of the corporate entity that signs the lease.
Why do “good guy” guaranties? The NYC landlord does not have to go through a lengthy eviction process and lawsuit to collect rent, if the tenant corporation has any left. The tenant gets the right to break the lease, provided he or she acts as a “good guy.”
That person signing the “good guy” is personally liable for the rent while the corporate entity occupies the space. In exchange for a limited personal guaranty, the tenant has the right to vacate the premises early and stop paying rent thereafter, provided the tenant: (i) gives the landlord some specified advance notice, (ii) is up to date with all amounts due and payable under the lease (rent and sundry expenses); and (iii) delivers keys of the demised premises to the landlord or managing agent and surrenders the demised premises to the landlord in broom clean condition and free of all subleases or licensees.
While I wholeheartedly agree with Rachel about supporting local businesses, our local businesses need to take care of regular customers. I’m sick to death of dealing with rude employees that have no interest in providing one iota of customer service. When my husband and I send gift baskets for the holidays, we use Tribeca businesses exclusively. One Tribeca bakery which is always full of Treats in particular. Over the years, the customer service has gotten so bad and the quality of the products has been on a steady decline, last year was our last using that local business. The person helping me at the counter was so incredibly rude and unhelpful, I really wanted to cancel my order. Out of sheer politeness, I did not. But when I looked up and saw the owner was in hearing distance of their rude employee and did nothing, well, I can take my business else where. We spend thousands of dollars on gifts for customers of our own business and I refuse to send substandard baskets AND be treated poorly all in the name of supporting a local business that doesn’t seem to care if they have my business or not.
If local businesses want more foot traffic, take care of your customers and maintain the quality of product that drew customers to your shop in the first place.
@Local Schmokal – I am assuming your above comment is entirely directed at me, and I would be happy to discuss your specific experience directly if you’d like to email me. I’m sorry your feelings are so strong after this time, and, contrary to what you think, I would not condone rudeness by my staff.
In general, I would just reiterate that, as I alluded to above, attracting and affording good labor is a particular challenge for small businesses. We employ people from all over the city, at a variety of ages and all levels of education, and training them to connect with Tribeca clientele can be especially difficult. From the back side of the counter, I have witnessed my (former) staff members being rude to clients as well as clients being abusive toward my staff. I don’t tolerate either. As a business owner, I sometimes walk a fine line between providing customer service and a comfortable work environment, so I try to handle these situations after taking a step back to look at the whole picture.
As part of supporting local businesses, I would ask everyone to also think about their interactions with people who work in this neighborhood, try to keep it positive on both sides, and if you have a bad experience, bring it up to the owner or manager in a constructive way–another advantage to shopping at small businesses.
Soho used to be a really great place to shop. In the 80’s there were a plethora of individually owned businesses that were creative and “somewhat” affordable. TriBeCa, to me, was even more special because there were so many women-owned businesses where one could walk around (in my case, closer to home) and get that something special you couldn’t get anywhere else.
I frequent Duane Street Patisserie more but have enjoyed numerous tasty treats at TriBeCa Treats as well. One of my lovely neighbors works there and has for years. But Local Schmokal hold fast to your complaints for on a national level, are seldom heard; on a local level the results can be devastating. Forge on small businesses.
I’ll stop by for a cookie Rachel.
Thank you Rachel, for verbalizing so succinctly my own thoughts, feelings and fears. One idea that could use further exploration is tax breaks/credits for landlords who keep small business tenants’ rent under market rate in order to maintain the special quality of “mayberry in manhattan” than so many come to TriBeCa to experience.