Construction of the Second Avenue Subway line is decimating shops on the Upper East Side — but there’s no sign that the MTA, the city or the state is willing to compensate the people who are being put out of business.
Four years ago, Tae Shin put his life savings into opening a combined sandwich shop (ironically, a Subway) and nail salon at Second Avenue and E. 93rd Street. Within a year, the street outside his spiffy new establishment had become ground zero for the biggest city infrastructure endeavor in 50 years.
The project threatens to end his career as an entrepreneur. As of March, the chaos outside his store had snuffed out 20 percent of the neighboring businesses and cost more than 150 people their jobs. “This feels like North Korea,” says Shin, who came from South Korea 24 years ago. “I didn’t know that in America, the government could kill you.”
The worst-hit, like Shin, are the businesses in the project’s staging area — a five-block stretch of pedestrian hell from E. 96th to E. 91st streets, which will remain a dragooned colony of the MTA until the job is done — supposedly in 2016.
Since 2007, access to the modest mom-and-pop stores has been blocked by a fortress of ever-changing concrete barriers, chain-link fence, plywood walls and heavy machines.
A four-story blue tower like a giant grain thresher now wholly obscures Shin’s store; it houses a noisy conveyor belt that carts out muck being bored from the subway tunnel and deposits it into waiting dump trucks. The unsightly contraption will remain in place at least another 18 months.
Foot traffic, the lifeblood of New York retailers, is down 50 percent since construction began, estimates Joe Pecora, owner of Delizia Pizza at E. 92nd St. and head of the Second Avenue Business Alliance. Electricity, water and phone service are periodically cut off, sometimes without warning.
Shin has taken out a $250,000 loan just so he can keep paying his rent, utilities, payroll and mortgage. Revenues are down 40 to 50 percent. He used to employ 12 workers in the nail salon, but only four remain; he himself works from 6:30 a.m. to 10 p.m. every day. His landlord gave him a 20 percent rent cut, but the lease still feels like he’s wearing ankle irons, he says. His wife cries as she does his books.
“All the merchants say: ‘One year of disruption, OK. Two years, OK.’ We understand,” Shin says wearily. “But 10 years?”
So far, no level of government has accepted responsibility for helping out these victims of a government-made catastrophe. The shop owners had suggested that they sell discounted Metrocards as a way to recapture customers. Not a chance, said the MTA.
A sales-tax moratorium? Don’t even think about it, various officials responded. In 2008, Gov. Paterson vetoed Assemblyman Jonathan Bing’s bill to provide state matching grants for advertising assistance and business counseling.
And Mayor Bloomberg has used his clout to block Assemblyman Micah Kellner’s bill to give landlords in the construction area a property-tax abatement, which they’d be required to be pass on to their commercial tenants.
Kellner estimates that the abatement would cost the city a maximum of $85 million over five years. Bloomberg spokesman Francis Barry says, “The city can’t afford to pay for special breaks.”
True, the state and city budgets are deep underwater. Yet it’s still hard to swallow the official excuses for not helping these hard-working small businessmen and their employees survive the construction assault.
The entrepreneurs’ main problem is that they’re not big, irresponsible or dependent enough to stake a claim on government attention. In 2003, the city and state gave Pfizer a $47 million package of tax abatements, caving in to the usual extortion about moving jobs out of the city. And New York spends billions each year on social services that no other city in America even attempts to provide.
Officials argue that assisting businesses in the subway zone will set a dangerous precedent for future construction projects. But the length of this project and the intensity of the assault on the area set it far apart from ordinary road or building work. And if any similar conditions arise in the future, a precedent to help entrepreneurs survive a government taking of their livelihood is perfectly appropriate.
The city and state must reach an agreement fast on a lifeline for these desperate proprietors. Reducing their expenses through tax relief — which the state should help the city fund — is the best way to assist them. Property values have already sunk in the staging area; property-tax relief is more than just.
Unless government acts soon, the ribbon-cutting for the new subway will take place in an urban wasteland of boarded-up, empty storefronts.
Heather Mac Donald is a contributing editor to City Journal and a resident of the East 90s.