Nyc bid conference


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Nyc bid conference

  1. 1. The Future of Retail <br />Steven Spinola, President, REBNY<br />New York City<br /> Business Improvement District<br />Annual Conference<br />July 13, 2010<br />
  2. 2. <ul><li>Introduction
  3. 3. Emergence of BIDs
  4. 4. Outlook for Retail
  5. 5. Problems Ahead – More Politics than Economics
  6. 6. Conclusion</li></li></ul><li>The Emergence of BIDs<br />Fulton Street Mall in 1976 began BIDs.<br />Focus on basic services—clean, safe streets. <br />
  7. 7. The Emergence of BIDs<br />Today - 64 BIDs generating $104 million, serving over 3,200 block fronts and 16,000 businesses.<br />Employing over 530 sanitation workers and over 360 security workers. <br />Essential to a vibrant retail corridor.<br />
  8. 8. The Outlook for Retail<br />Economic recovery is beginning.<br />Momentum translating into retail sales growth. <br />National retail sales were 9.24 percent higher in March, 9.77 percent higher in April, and 7.41 percent higher in May than a year ago. <br />NYC retail employment has added 3,200 jobs since the beginning of the year. <br />
  9. 9. The Outlook for Retail<br /> <br />6,800 more people employed in retail in NYC this May than last May.<br />Demand for prime space remains healthy.<br />Outside prime locations demand is weaker.<br />Retail is highly localized. <br />
  10. 10. The Outlook for Retail<br />Average Ground Floor Asking Rents<br />Selected Manhattan Corridors<br />Spring 2010<br /> <br />Madison Avenue (57-72) $960<br />Third Avenue (60-72) $267<br />Broadway (72-86) $291<br />Broadway (Times Square) $1,400<br />Fifth Avenue (49 – 59) $2,300<br />Fifth Avenue (42-49) $425<br /> <br />Major large leases: Aeropostale, Disney in Times Square;<br />Uniqlo on Fifth Avenue<br />
  11. 11. The Outlook for Retail <br />The health of the consumers is key for retail.<br />Recession impact on luxury goods sector.<br />The efforts of the Madison Avenue BID. <br />
  12. 12. The Outlook for Retail<br />Impact on “Mom and Pop” retail.<br />Shortage of working capital and lines of credit.<br />Blame problems incorrectly on rising rent.<br />
  13. 13. The Outlook for Retail<br />Small retail stores success stories:<br />Brentwood Pharmacy new lease on West 8th Street, joining its location on West 14th Street.<br />Lamazou Cheese in Murray Hill opens its first restaurant, a block away from its current shop. <br />
  14. 14. Problems Ahead – More Politics than Economics<br />Unions use legislation to raise the pay and benefit scale of employees, not organizing and negotiation.<br /> BIDs and Prevailing Wages<br />Mandating prevailing wages for sanitation and security.<br />Reduce staff and cut services.<br />Bill placed ideological goal above the mission of the BIDs and their benefits for the neighborhood and the city.<br />
  15. 15. Retail Stores in Brooklyn<br />Compared to Long Island<br />
  16. 16. Retail Stores in the Bronx<br />Compared to Long Island<br />
  17. 17. Mandatory Paid Sick Leave<br />20 or more employees: 9 paid sick days a year<br />Less than 20 employees: 5 paid sick days.<br />Higher costs on small businesses.<br />
  18. 18. Commercial Rent Control<br />Mandates arbitration for lease renewals. <br />Arbitration only binding on landlord.<br />Tenant can stay in the space at a 5 percent increase. <br />Tenant: A right of first refusal.<br />
  19. 19. Commercial Rent Control<br />1969 NYT article with the headline “High Rents Close ‘Village’ Stores”. <br />
  20. 20. Florence Meat Market – Still in business at the same location<br />
  21. 21. A new fruit and vegetable market has opened on the same block.<br />Francis Typewriter and Television and a second hand book dealer are no longer there - businesses a victim of a changing market.<br />
  22. 22. Landmarking and Retail Stores<br />Proliferation of historic districts.<br />Expansions of the Upper East Side and SoHo. <br />Lease negotiation in a landmarked property.<br />Large national retailers want their trademark marketing. <br />Reluctant to spend money for landmark process.<br />
  23. 23. Landmarking and Retail Stores<br />Small stores can’t pay for the approval process. <br />Small boutique stores often don’t pay a high enough rent.<br />Uniqueness and creativity of Boutiques are desired by residents.<br />
  24. 24. Conclusions<br />New York City can support more retail stores.<br />Must lower operating costs and stop mandating wages and benefits.<br />Strong businesses survive and thrive; weak ones don’t.<br />BIDs create an environment that helps the strong businesses get stronger and gives the weak ones the best chance of success.<br />BIDs are a vital element in the future of retail in NYC.<br />