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What’s being done—or not—to save Manhattan’s small businesses from Amazon and big box competition
Broadway, Manhattan’s longest street and a main commercial drag, spans the length of the island from hilly Inwood to Lower Manhattan’s breezy Bowling Green. There are shops from nose to tail, but a recent survey found that Broadway is also home to almost 200 vacant storefronts, dead zones on one of Gotham’s liveliest thoroughfares.
Glaring vacancies aren’t limited to Broadway though. From Madison and Fifth Avenue to Broadway in Soho and Bleeker Street in the West Village, high-end commercial strips in Manhattan are having trouble attracting commercial tenants. A healthy vacancy rate is 5 percent, but some fancy areas are in the midst of high-rent blight, with one in five (20 percent) storefronts vacant.
Further north, in Washington Heights, a whole block of immigrant-owned businesses were essentially evicted after new landlords proposed a 100 percent rent increase and declined to renew their leases.
Why is this happening?
The causes are predictable, but the solutions are not.
High rent, high taxes, regulations that favor owners over tenants, and plain old capitalism—the incentive for owners to seek their property’s maximum value, and the consumer’s desire to acquire goods at the lowest price—all contribute to the twin plagues of vacancy and the mall-ification (national chains displacing small, local businesses) of Manhattan. Stakeholders, though, disagree on what should be done to solve a growing crisis at street level.
This spring, the Manhattan Borough President’s Office (MBPO) recruited volunteers to count all the vacant storefronts along Broadway, citing a dearth of information on how many vacancies exist, and where. The survey follows an effort from two years ago where the office reached out to small businesses and offered potential policy solutions to businesses’ problems.
But first the report had to determine what a small business is, a question that is not as obvious as it seems.
The federal government’s Small Business Administration (SBA) measures business size by number of employees or the company’s value, depending on the sector. The Small Business Act, though, uses a measure that doesn’t exactly conjure visions of mom-and-pops: It says small businesses have fewer than 500 employees. Under the same rules, a microbusiness has fewer than five employees and requires $35,000 in capital or less to get going.
In New York State, small businesses are companies that employ fewer than one hundred people, while New York City’s Department of Small Business Services doesn’t set a number. Instead, it encourages any self-identifying businesses to seek out its resources.
Consequently, the MBPO’s March 2015 report called for a standardized measure of “small,” and the recommendations in its report are geared toward firms with 15 or fewer employees.
No matter how you define them, it’s clear that the not-so-invisible hand of the market is driving these firms out of business on Manhattan’s main streets. One problem? Stratospheric commercial rent increases. In 2014, the average asking rent in Manhattan was $65.14 per square foot. With ever-more high-income individuals flooding Manhattan, landlords are reluctant to offer 10- or 15-year commercial leases lest they get stuck with a lower-paying tenant as commercial land values in the neighborhood skyrocket.
Other problems, the report found, include businesses not having enough insurance, delaying tax payment, and under-budgeting for utilities. On the city side, some business owners in the report cited punitive agency inspectors who, instead of working with the owner to correct an issue, slapped the business with a fine.
Additional solutions don’t seem politically viable or aren’t effected at a scale that works.
A special tax for businesses in most of Manhattan eats into viability, too. In June, Mayor Bill de Blasio rejected the city council's proposal to alter commercial rent tax, an almost four percent surcharge on annual rent of $250,000 or more on businesses below 96th Street. As rents have risen, the tax threshold has stayed the same, and more businesses have become impacted. A bill (sponsored by Councilmember Dan Garodnick) that would raise the ceiling to $500,000 in annual rent didn’t make it into the final 2018 budget, though the item could be considered at a later date. If that limit were approved, the city would lose $52 million in revenue annually.
Zoning regulations encourage new development with huge storefronts that work for Chase and CVS but not for their independent counterparts. On the Upper West Side, though, neighbors are seeing mixed success from initiatives like a 2012 zoning change that limited storefronts to 25 feet, but don’t limit store size, as businesses are free to expand up or down as space permits.
But some advocates say these reforms don’t go far enough to stop business closures and the encroachment of chain stores.
“There is a crisis,” said Kirsten Theodos, cofounder of TakeBackNYC, an advocacy group for New York City small businesses. New York is losing 1,000 small businesses and 8,000 jobs per month. Theodos, who lives near the East Village, said all of this “fuels the hyper-gentrification and whitewashing of the city, a process that’s really accelerated over the past six years.”
Her group supports the Small Business Jobs Survival Act (SBJSA), a piece of local legislation that would set new rules around renewing commercial leases. Among other provisions, SBJSA would give commercial tenants, at minimum, a ten-year lease plus right to renewal and the option of arbitration to come to a new rent. The legislation is designed to slow, not stop, the rate of change in neighborhoods, and level the playing field for florists and bakeries competing for storefronts with Starbucks and Pottery Barn.
When the bill was first introduced in 2014, it had the support of 17 councilmembers—now it has the support of 26, or half the council. But in a city dominated by real estate interests, the bill is a nonstarter, Theodos explained. REBNY, the city’s largest real estate trade association, opposes the proposed rules, rallying around the idea that land values are subject to the “free market” and (incorrectly) deeming the rules “rent control.”
Even real estate boosters, though, acknowledge the downtrends in the market. According to REBNY, average asking rents in Manhattan this past spring fell in 14 of 17 of the borough’s top shopping strips compared with 2016 and record highs in 2014 and 2015. But the group maintains that a variety of factors set Manhattan apart from the suburbs, and grant the city a degree of immunity from experts’ dire predictions about the death of retail. In New York, REBNY says there are “strong market fundamentals,” including diverse food tenants, online retailers opening storefronts, and the eternal cache of a New York, NY address.
But to REBNY, doing well means collecting more rent. Fifth Avenue between 14th and 23rd streets (the Flatiron Fifth Avenue corridor) and Broadway between Battery Park and Chambers Street (the Lower Manhattan corridor) did the best, with ground floor rents rising by 18 percent to $456 per square foot in the Flatiron and 11 percent to $362 per square foot along the Lower Manhattan corridor. The report only looks at rents along main strips. Rents on side streets, according to the report, could diverge from the main drag; conversely, a gorgeous space on a prime corner may command greater asking rent and affect averages all along the strip.
It’s not only high rents and taxes that are driving businesses to close. Online shopping is slaying retailers big and small, in Manhattan and the suburbs and beyond. Right now, unchecked real estate speculation and limited protections for small-business owners mean that there is little protection against ultimately having a national bank and pharmacy on every corner.
No Timeline Yet, Though
A James Turrell “Skyspace” pavilion will land at the Philadelphia Museum of Art
The City of Philadelphia's Historical Commission approved the installation of the modern pavilion last month, paving a spot for the artist to build on an iconic rocky outcrop behind the museum. The pavilion is being built with Philadelphia-based KSK Architects and is a part of Turrell’s Skyspace series. Every Skyspace varies, but they all feature a proportioned chamber with an aperture in the ceiling and computerized light installations that are meant to evoke meditation and contemplation.
This new pavilion will be a free-standing structure with an opening in the canopy for a framed view of the sky. A twice-daily show at sunrise and sunset with colored lights will be projected onto the underside of the canopy. There are already two other pavilions on the outcrop, and Turrell’s will be the third—a modern, 21st-century piece. It is being paid for by an anonymous donor and is only the second commission the museum has installed (the first being Sol Lewitt’s garden composition).
According to the Philadelphia Inquirer, the pavilion was initially denounced as an “alien spaceship” by one Historical Commission member; a National Park Service official also warned that it could ruin the iconic landscape. (The site overlooks the historic Fairmount Water Works.) After several changes, including blending the canopy more into its environment and obscuring the lights, the pavilion gained approval from both commissions.Despite initial objections, Dan McCoubrey, head of the commission’s Architectural Committee, said that “it’s a very logical place for a pavilion,” as reported in Plan Philly. “It’s a pavilion that’s contemporary in style. We have a rustic pavilion, a neoclassical pavilion, and now a wonderful contemporary pavilion.”
Inga Saffron's article in the Inquirer pointed out that while the museum did get approval from the Art and Historical Commissions, there was little public engagement process for the pavilion.
There are more than 80 Skyspace installations across the world, including Turrell's first Philadelphian one in the Chestnut Hill Friends Meeting House. There is no set timeline for the project yet.
In between photography assignments for virtuosos such as Moshe Safdie, Marlon Blackwell, and Rural Studio, Timothy Hursley takes long drives throughout the rural South and other parts of the country and aims his camera at the neglected structures and forlorn dwellings of obscure or shunned subcultures.
Hursley’s ramblings have produced several series, including his photographs of both the interiors and exteriors of the brothels of Nevada. These gentle narratives, in which the women are notably absent, bear no hint of judgment. “The photographs are stronger without people,” Hursley said. “They are like footprints of a subculture.” When Hursley stumbled upon Bobbie’s Buckeye Bar, the owner would not let him in. Left to contemplate the outside, Hursley found a composition in which the running white fence symbolized customers entering the pink brothel and “then coming out tainted red,” he explained.
Finding himself in Utah, as the trial had just begun for convicted felon Warren Jeffs, the former leader of the Fundamentalist Church of Jesus Christ of Latter-Day Saints (FLDS), Hursley wondered what the architecture of polygamy looks like. An apostate brought Hursley to the FLDS cave in Hildale, Utah, a stronghold of polygamy, where he photographed the eerie interior and a new series was launched.
A quad of photos and a time-lapse video of a dilapidated silo in Hale County, Alabama, are the subject of the Oxford American video SoLost: The Beauty of a Broken Silo. Photographed from different angles, the bent and rusted structure radiates a heartrending anthropomorphism.
Closer to his home in Little Rock, Arkansas, Hursley stumbled upon two beaten-up white hearses that triggered a new fascination with the rundown funeral homes that dot the rural landscapes of the deep South. In one curiously intriguing image, Train Ride-Vicksburg, Mississippi, 2014/2016, two coffins sit on either side of a nearly room-size toy train track. For Hursley, the scene—odd, yet ordinary—is an analogy to the human condition, traveling through life to our inexorable ends.
And perhaps most curious for an artist attracted to scenes of obscurity is his series of photographs of the legendary Andy Warhol’s last factory in the early 1980s. The studio spaces were still raw at the time, recalled Hursley: “There was a lot of junk around, so I decided to roam around the space and start documenting what was there.” Eventually, Hursley enticed Warhol to come down to the cavernous space where he snapped an extraordinary photo in which a blue-jeans-and-black-turtleneck clad Warhol stands against the abstract geometry of the white space, illuminated by a distant doorway awash in an industrial shade of green.
Timothy Hursley: Tainted Lens, a solo exhibition of these and other works, is on view at the Garvey|Simon gallery in New York through June 10.
Turning the Tide
Facing rising sea levels and greater insurance risk, Southern Florida braces for relocations, new flood design standards, and more
This article appears in The Architect’s Newspaper’s April 2017 issue, which takes a deep dive into Florida to coincide with the upcoming AIA Conference on Architecture in Orlando (April 27 to 29). We're publishing the issue online as the Conference approaches—click here to see the latest articles to be uploaded.
The moon over South Florida looked like a swollen grapefruit in November, its reflection rippling off pools of ocean water that bubbled up through storm drains, crept over seawalls, and swallowed Miami streets. It was a “supermoon,” about 17,000 miles closer to Earth than usual, according to NASA, arriving just in time to supercharge the seasonal high waters known as king tides. The water made an island out of the lifeguards’ shack on Matheson Hammock Park, swept “No Wake” signs from marina harbors onto city streets, and marooned a live octopus in a parking garage along Biscayne Bay.
On days like these, it’s obvious that much of the region now home to about 7 million people began as a network of swampy canals meandering from the Everglades to the ocean. Sometimes nature conspires to remind the city of this fact, as it did in November 2016.
Lately those reminders have become more frequent. The rate of sea-level rise has tripled over the last decade, according to a recent study from the University of Miami, bringing with it more frequent coastal flooding. The U.S. Army Corps of Engineers projects that Miami-Dade County will see about 15 inches of sea-level rise by 2045. And because South Florida sits on porous limestone bedrock, saltwater is not just encroaching on coastal communities, but gurgling up from below.
Right now it’s a nuisance, but over the lifetime of a mortgage, flooding in South Florida could threaten tens of billions of dollars of real estate and upend development in the country’s 10th largest metropolitan area. Architects, planners, and developers are just beginning to overhaul the urban landscape, laying the groundwork for a sweeping transformation of building codes, municipal infrastructure, and design norms that could save the city from rising seas.
The crucial question is: Who will change that built environment? Will it be architects and city officials, safeguarding South Florida against the effects of climate change as the world’s living laboratory for so-called climate resiliency? Or is nature coming to reclaim Miami as a swampland?
South Florida’s development boom is so lucrative it seems inevitable that it will continue. Before the city was founded in 1896, however, it wasn’t clear that the mouth of the Miami River would ever be anything more than a mosquito-infested trading post—until the industrialist Henry Flagler dragged his railroad south from Palm Beach along the highest ground he could find: a coral ridge between 12 and 25 feet above sea level. The tracks reached Biscayne Bay on April 22, 1896. Three months later Miami was incorporated.
Today, Miami is a bustling, sprawling urban landscape that has been remade to suit cars, but some planners say that the same limestone ridge Flagler used could anchor climate-friendly development.
The Urban Land Institute is drafting a plan for the Arch Creek Basin, a mostly low-lying area straddling 2,800 acres and four municipalities, as well as unincorporated Dade County, around one stretch of the railroad. Primarily poor people of color, the residents of Arch Creek face a severe threat from sea-level rise—one that could eventually force them to abandon the area.
At a charette in November, designers Gustavo Sanchez-Hugalde, Max Zabala and University of Miami professor Sonia Chao presented their idea for a flood-resistant transportation hub at Northeast 125th Street. It would be transit-oriented development, dense with mixed-use buildings and affordable housing, but also with a health clinic, back-up generators and other resources that could come in handy during a disaster.
“Think of these as not just transit but resilience stations,” said Chao.
In the long run, South Florida’s scarcity of higher ground could also make its elevated areas more valuable as waters rise. That could exacerbate gentrification in minority neighborhoods with relatively high elevations like Liberty City and Little Havana.
“It’s a matter of time until investors will head for the higher land,” said James Murley, chief resilience officer for Miami-Dade County. But climate change isn’t forcing people out of their homes just yet. Asked if climate change is a driving force for gentrification in Miami, Murley is skeptical, but others are starting to look toward the future.
“Right now we’re experiencing more of the classic gentrification that comes with a growing real estate economy,” Murley said.
While the mainland mulls long-term plans to adapt to rising seas, the coastal barrier island of Miami Beach is busy building.
Planning for High Water
Over the next five years, the municipality of Miami Beach will spend $400 to $500 million on flood defenses, installing 80 new pumps, raising roads, and strengthening seawalls across the city. So far the city has funded about $200 million of that project by more than doubling stormwater fees.
A law passed last year requires the owners of buildings larger than 7,000 square feet to pay a fee if they don’t get certified as at least LEED Gold. The builders of properties that don’t get LEED certified at all get slapped with a fee equal to 5 percent of their construction costs. That could help raise money for future infrastructure investments.
Miami Beach also requires new buildings to be at least one foot above the base flood elevation of six feet above sea level. As an additional incentive for developers, the city won’t count the raised elevation of a flood-proofed site toward the project’s height limit or floor-to-area ratio.
Miami Beach environment and sustainability director Elizabeth Wheaton said the new requirements wouldn’t stunt development.
“Developers want to build here,” Wheaton said. “They’re going to do what’s required.”
The first building completed under the new elevation requirements is Jean Nouvel’s Monad Terrace, a 59-unit luxury residential tower on the waterfront in South Beach. Nouvel built Monad Terrace’s ground floor more than 11 feet above sea level, elevating all of the building’s interior spaces and its entrance high enough to ward off flooding.
Building high is an increasingly popular choice for private residences, too. The local architect Rene Gonzalez, known for his high-end modernist houses, is building four new homes in the area that are modeled on mangroves—propped up with stilts and columns for an additional layer of privacy that also affords the owner some long-term insurance against flooding. Gonzalez designed his own home on Belle Isle the same way.
“It’s a responsibility that every architect should take on,” said Gonzalez. “Building a house up is not a luxury. It’s a necessity in our current environmental climate.”
For now, however, most of that work is clustered in tony Miami Beach. In Miami-Dade County at large, where nearly half of all residents live in poverty, there are fewer options.
Because saltwater rises up through South Florida’s porous limestone bedrock, it’s not just coastal communities that are at risk. Many of the most threatened areas lie miles inland, in suburban and often low-income areas of Miami-Dade and Broward Counties that can’t afford to elevate all their homes and streets.
“It’s unavoidable that there will be relocations,” said Anthony Abbate, an architect based in Fort Lauderdale in Broward County, just to the north of Miami-Dade. “It’s a difficult conversation but I think we’re on the verge of having it. This has to be a conversation with the people, with the public.”
Miami-Dade is in the middle of a vulnerability analysis for major infrastructure, from its airport to its water system, identifying “adaptation action areas” where city planners might best focus their efforts.
“There’s a lot of work that needs to be done and it needs to be done in short order,” said Abbate.
Some of that work is already underway. The newest addition to the county’s hospital system will pioneer a flood-friendly approach in the recently incorporated town of Doral, just west of Miami International Airport. Designed by Perkins + Will, Jackson West hospital will devote most of its 27 acres to green space and a retention pond to store runoff not just from the built-up part of the site that will house the hospital, but from the developments surrounding the site. Construction is set to begin later this year and the hospital could open in 2020.
Risk and Reward
Perhaps before it faces up to the force of nature, however, South Florida may have to reckon with its runaway real estate market. Wayne Pathman, a land-use attorney and chair of Miami’s Sea Level Rise Committee, said the face of Miami’s climate crisis might not be a natural disaster, but a collapse of the insurance market.
“Flood insurance is going to be the tip of the spear,” Pathman said. “Unlike hurricanes, which are a single event that may not happen for years at a time, sea-level rise is a constant. Once it’s here, it’s here, and it’s never going to get better.”
Pathman said some of his clients with property in Miami Beach and North Beach are already seeing a 500 percent increase in their flood insurance premiums. For now, that’s manageable, he said, because they were probably underpriced in the first place.
“When that jumps as high as $50,000 over the next 10 years, which it will, that’s alarming,” he said.
Areas that today flood two or three times each year could see water in the streets every week, and banks may stop offering mortgages there. That could have ripple effects across the region, Pathman said, jeopardizing tourism dollars and property-tax revenue that Miami-Dade and Broward counties will need to fund new climate-resilient infrastructure.
“Those are our only two industries here in South Florida,” Pathman said. “If we don’t start dealing with the insurance risk, all the ideas we come up with for future infrastructure will be cost-prohibitive because we won’t have any money.”
Reinaldo Borges, an architect who sits on the sea-level rise committee with Pathman, said the luxury houses and museums already built to deal with higher seas show climate-resilient design can provide a return on investment.
“If you design correctly,” he said, “you shouldn’t be worried about insurance risk.”
Borges has a checklist for clients who are looking to invest in the future of Miami real estate—not just flip property for a profit. It includes elevating building mechanical systems, installing hurricane-proof windows, and planning for severe floods.
“For a building like that, all you have to do before a storm is bring your pool chairs inside,” he said.
Climate-proofing one building may be a straightforward design problem. Saving a metro region of 7 million is something else.
Borges came to Miami when he was six years old, brought from Cuba by parents who sought a better life for their children. Today he has two daughters, ages 23 and 29, and he has the same hope for them.
“When you’ve got political leadership in denial, these are challenges I’m concerned about,” said Borges. “This is a world-class city, but people are starting to ask if this is the place they really want to invest.”
Small Town, Big dreams
Gluckman-Tang, LTL, and NADAAA selected as finalists for arts center in Telluride, Colorado
New exhibition at the Arkansas Art Center highlights the early works of Ansel Adams
Ansel Adams: Early Works, the first exhibition of Ansel Adams’s photography hosted by the Arkansas Arts Center, will showcase 41 prints done by Adams from the 1920s through the 1950s, highlighting his small-scale images. Adams was known for his photography of natural sites such as Yosemite National Park, Sequoia National Park, and the Sierra Nevadas, and this exhibition will tie into the completion of the 100th anniversary of the National Park System. According to the Arkansas Arts Center, Adams wasb a “photographer, musician, naturalist, explorer, critic, and teacher, was a giant in the field of American landscape photography. His work can be viewed as the end of an arc of American art concerned with capturing the ‘sublime’ in the unspoiled Western landscape.”
Ansel Adams: Early Works Arkansas Arts Center 501 East 9th Street, Little Rock, Arkansas Through April 16, 2017