Small Business Needs New Ideas, Programs

Maryann Terillo, chef/owner of the soon-to-open Bistro de la Gare at 626 Hudson Street, is nearing the home stretch of the grinding process that is opening a small business in the West Village. As she struggles to meet the demands of her landlord’s architect, the Landmarks Preservation Commission and city health, buildings and fire departments, she is acutely aware that every day her opening is delayed she is losing money.

Terillo, who last cooked at neighborhood favorite, Jarnac, is planning the kind of small, charming restaurant that the West Village is known for. Yet as she sees it, there is no support for her kind. The frustration in her voice is audible when she says, “If anyone tells you there are small business loans in this city, they’re lying to you. There’s no funding for any small business in the city.”

The independent, “mom and pop” stores that have characterized the West Village are threatened by the worst economic recession since the Great Depression, skyrocketing rents, competition from chain stores, lack of protective zoning laws and credit.

What can be done to help these struggling entrepreneurs? A look at a few other Manhattan neighborhoods reveals organized efforts that could serve as models for the West Village. For the past three years, the East Village Community Coalition has produced its Get Local Guide, which lists locally owned businesses and encourages residents to think about shopping in the East Village and Lower East Side before they support a chain store, says EVCC managing director Kurt Cavanaugh. The Coalition has also launched a grass roots effort to drum up support for what is known as Formula Retail Regulation zoning, which would prohibit chain retailers from opening in the neighborhood. Neighborhoods in Seattle and San Francisco have passed such local zoning laws and the EVCC hopes to make the East Village the first in New York City to do so.

The Downtown Alliance, which manages the Downtown-Lower Manhattan Business Improvement District, conducts extensive outreach to and offers marketing help for new businesses in the district, says Elizabeth Hewitt, director of business assistance for the organization. Although the Alliance provides information and technical aid related to lower Manhattan incentive programs that the West Village does not have access to, Hewitt says, “We go above and beyond that kind of assistance: we offer space searches, giving businesses a head start before they see a broker. We host small business networking events, breakfast seminars and after-work casual happy hours.” The social events, says Hewitt, are even more helpful to small businesses than the Alliance’s technical assistance because “they allow owners to make new contacts and grow their businesses.”

City Council Speaker Christine Quinn has spearheaded a number of efforts to help small businesses, including a penalty forgiveness period for Environmental Control Board fines through December 21, a panel to review onerous city rules and regulations, and a pilot program to coordinate health, building and fire inspections. Tony Juliano, chairman of the Greenwich Village-Chelsea Chamber of Commerce, praises Quinn for her efforts but notes, “It’s still early,” and that the latter two efforts have yet “to really come to fruition.”

The future of small retailers was the topic of an October Greenwich Village Society for Historic Preservation panel discussion, “Preserving Small Businesses,” featuring City Council member Gale Brewer, Juliano, and Pratt Center for Community Development Director of Planning and Preservation Vicki Weiner. The panelists listed and listened to a long litany of obstacles facing small businesses in the city: deposits of six months or more; rising excise, property and sales taxes; the city’s buildings department “nickel and diming merchants” over signage and other violations, and real estate developers who wield all the power and have no incentive to give small businesses a break.

An advocacy planning and design organization that supports community-based neighborhood improvement groups, the Pratt Center has issued a brief, “Saving Independent Retail.” The brief notes that the Bloomberg administration’s “Five Borough Economic Opportunity Plan” neglects the problems of small retailers. Pratt proposes measures to shore up local businesses, including land-use regulations, especially anti-chain zoning, financial incentives that reward landlords for renting to local retail businesses and support programs ranging from niche marketing to grants and loans for small retailers.

Next, says Weiner, the Pratt Center plans to organize a late winter or early spring community meeting on this issue “to create some sort of policy framework platform so we can work together.” Community development corporations, merchant’s associations and business improvement districts will all be included. “Parties are talking about these issues, but they’re not talking to each other,” explains Weiner, adding, “Pratt is uniquely positioned to bring them together.”

Jon Mudder, owner and executive chef of the 24 Minetta Lane restaurant Bellavitae and a West Village resident, says he would like to see the city study the economic benefits that small business bestow on the city. Statewide, he notes, small businesses of fewer than 500 people make up 99 percent of all New York’s business, and in 2004-2005, created 93 percent of the country’s new jobs. “Everyone’s thinking about jobs,” Mudder points out. “If we do a [citywide] study instead of guessing, it would speak very loudly not only to the community, but to politicians who make decisions: small businesses are an important part of our economics.”

Aaron Bond, co-owner of the clothing and accessories boutiques NYArtificial (223 West 10th Street) and NYA (13 8th Avenue), said, “Where’s the bailout we were promised to keep going? It has to come from a governmental level, and our government isn’t sure what to do.”

Although there are no signs of a federal bailout for small businesses, the day after Bond made this comment, Goldman Sachs made an unexpected announcement. In an act of contrition over its role in the financial crisis and its outsized profits, the investment bank announced it will give $500 million—about 3 percent of the $16.7 billion it has allocated for employee payment—in aid to small businesses. According to Goldman, $200 million of that amount will go to “education” through local colleges and other institutions, and $300 million will be distributed in loans and support through Community Development Financial Institutions (CFDIs).

The problem is that struggling small business owners like Terillo don’t need to go to business classes, they need small business loans. They won’t be getting those from Goldman either, because New York CFDIs fund the most underserved communities in the state, and the West Village isn’t one of them. Will Goldman employees hand over some of the more than $20 billion in bonuses they will get this year to a few struggling local businesses? Ask your neighborhood investment banker!