Is Retail Shrinking? New Citywide Storefront Vacancy Analysis Identifies a Lull in Staten Island’s Business Landscape

Despite evidence of continued economic expansion and an excessive launch of new retail properties throughout Staten Island, a new in-depth analysis released last week by New York City Comptroller Scott M. Stringer shows that the rate of empty and vacant storefronts across the five boroughs has skyrocketed by nearly 50 percent over the past decade.

Rising to a high of 5.8 percent citywide, retail vacancy doubled to over 11 million square feet between 2007 and 2017 – fueled in part by the growth of online shopping, rising commercial rents and burdensome regulatory hurdles.

And while landlords, retailers and the City itself struggle with those findings, local leaders are searching for solutions to this growing problem.

“New Yorkers have all seen the signs of our changing economy in the last decade, as vacant storefronts have become all too common and neighborhood institutions have fallen by the wayside,” Comptroller Stringer stated in the report. “Change is the one constant in New York City – and sometimes, change can be overwhelming. Even as our economy has grown, many mom-and-pop stores have been left behind, transforming spaces once owned by local small businesses into barren storefronts. This isn’t just about empty buildings and neighborhood blight, it’s about the affordability crisis in our city. We need to use every tool in the box to tackle affordability, support small businesses and ensure New Yorkers are equipped to succeed in the new economic reality.”

Proposing a series of measures, including a tax incentive for retailers in high-vacancy areas, reforming the City bureaucracy that stalls the construction, inspection and permit processes and improving planning for how retail spaces are developed, Comptroller Stringer also released a set of neighborhood profiles detailing how the shifting economy is impacting vacancy rates in communities across the five boroughs.

The highest vacancy rate neighborhoods were found in Staten Island and Queens.

Areas analyzed here included Port Richmond, which had 49 vacant storefronts or 10.84 percent of its retail area; Oakwood/New Dorp, which had 44 empty spaces or six percent; and Rossville which tallied 37 vacancies or 6.97 percent. West Staten Island, which consists of neighborhoods in the 10314 zip code, had 47 open slots, which accounted for 4.41 percent of the area’s retail square footage.

Linda Baran, president and CEO of the Staten Island Chamber of Commerce, weighed in on those findings.

“There are so many different reasons why a store could be vacant,” Baran explained. “But what I hear more and more of from business owners in the community is that there is currently a mix of obstacles: The overall cost of doing business is increasing, it’s become more and more difficult to deal with different agencies in terms of approval and launch and the basic architecture of operation is simply overrun with lags. I think this all contributes to the increase in storefront vacancies throughout our borough.”

There’s also a variety of new laws that recently came into play: An increase in minimum wage plus mandated paid sick and vacation leave are affecting the way small business owners operate.

“Even though these were a lot of things already being provided, the fact that they are now mandated takes a lot of flex away from small business owners and puts them in a different position,” Baran continued. “Business owners want to take care of their employees but this new legislation can also result in damaging lawsuits.”

Escalating rents are also an issue, Baran explained, as are unexpected costs and fines that often arise.

“There are a lot of mom and pop shops with thin profit margins,” she said. “Often times the city will come along and require a necessary fix or issue a fine that can total $10,000. They’re all expenses that can essentially make or break a business.”

And business locations are shifting.

“The Bay Street Corridor, which struggled for many years, is now undergoing a renaissance, attracting many shoppers and small businesses to that corner of the Island,” Baran said. “And of course there has been an influx of big box stores which have impacted the borough and several strip malls and other convenience centers are changing the way we shop.”

But Baran credits local Business Improvement Districts (BIDs) with supporting the progress of local business.

“Councilman Steve Matteo is doing a wonderful job supporting local business with the development of these BIDs,” Baran pointed out. “They certainly spur some activity along all of our shopping corridors and have definitely sparked growth.”

Baran also calls Staten Island an “anomaly,” noting how the borough’s retail landscape has grown while others throughout the city have declined.

“Retail is shrinking in other areas throughout the city but our mall is expanding,” Baran said. “I think Staten Island is producing a new model of the retail experience – we have movie theaters and entertainment venues like Dave and Buster’s altering the shopping experience at the mall and Empire Outlets turning shopping into a destination. These are all positive changes for the borough’s retail landscape, adjustments that are bucking the vacancy numbers that Comptroller Stringer is identifying.”

Councilman Matteo, who argues that Stringer’s statistics are from 2017 and already dated, agrees.

“The City Planning Commission recently released a report on the same topic and referred to New Dorp as a ‘local, stable corridor,’” Matteo said. “The data represented in that report is more current and indicates that we have a diverse portfolio of businesses on New Dorp Lane.”

Matteo also reported that the Planning Commission’s report, which encompasses data from most of 2018, reflects the work done by the New Dorp BID, which wasn’t officially approved by the City Council until April of 2017.

“The New Dorp BID and Merchant’s Association have been responsible for a notable reduction in storefront vacancies,” Matteo said. “And while Comptroller Stringer’s report identifies vacancies along the corridor, his report also couples New Dorp’s vacancies with those of Oakwood. And there is no in-depth look into the length of vacancy or future plans for the site. There are currently about five or so vacant stores on New Dorp Lane that have plans to reopen in the very near future.”

And while the Councilman does not deny the challenges of opening a business in New York City – “taxes, high rents and a stable of regulatory issues continue to plague local business owners,” – he does point to the local partnership between government and retailers that is helping mom and pop shops thrive.

“We had a food crawl along New Dorp Lane two weeks ago and will host a car show this weekend,” he said. “These events are all about showcasing New Dorp Lane; we want everyone to come out on a Sunday and then come back again to eat and shop on Tuesday.”

And Matteo says the rumors of New Dorp retailers fearing the impending opening of the borough’s first medical marijuana dispensary are just that – rumors.

“New Dorp retailers have valid questions about the dispensary but those questions aren’t fearful, they’re educated,” Matteo said. “I do not believe that any store vacancies that exist on New Dorp Lane have anything to do with the opening of that site.”

But there was a positive take-away from the Comptroller’s report: Stringer neatly laid out a series of recommendations to address the retail vacancy crisis. Steps included providing tax incentives for independent merchandise retailers in high-vacancy retail corridors, creating a multi-agency task force staffed with single point-of-contact customer service representatives to assist new businesses by coordinating and expediting the necessary regulatory actions and pushed for incorporating retail demand into neighborhood planning.

“The City should require an analysis of retail demand in any major development proposal or rezoning, to ensure that the right amounts and types of retail space are incorporated into the planning process,” the report concludes.