Just how good is that Bloomberg five borough economic plan working? Well, if you read the NY Times this morning, not so good. According to the Times, the mayor's plan-one that he has now unveiled for the third time since 2001-isn't making a dent in the closing of retail stores all over the city: "But as New Yorkers have drastically cut back, the shops that line the streets, from chain outlets to family-run shops, have started to disappear. The storefront vacancy rate in Manhattan is now at its highest point since the early 1990s — an estimated 6.5 percent — and is expected to exceed 10 percent by the middle of next year, according to data gathered by Marcus & Millichap Research Services, a national real estate investment brokerage based in Encino, Calif."
Even the most expensive shopping streets have been hard hit: "And those numbers do not capture the full story. Some of the more desirable shopping districts are littered with empty storefronts. For example, Fifth Avenue between 42nd Street and 49th Street, the stretch just south of Saks Fifth Avenue, has a vacancy rate of 15.3 percent, according to the brokerage Cushman & Wakefield."
The recession, of course, has been the underlying cause of the current vacancy surge, but missing from the Times' analysis-which focuses on high, unaffordable rents-are the factors that have accelerated the NY trend: high taxes and an onerous regulatory regime. And the retail vacancies aren't limited to Manhattan: "The outlook is even worse in other boroughs. Hessam Nadji, managing director of research services at Marcus & Millichap, estimates that vacancy rates in Brooklyn and Queens, currently at 7 to 10 percent, will rise to 12 to 15 percent by year’s end. He said some neighborhoods have been ravaged by vacancy rates of 25 to 40 percent."
The retail crisis has hit newer Hispanic-owned businesses particularly hard-prompting the call for some form of government intervention: "But as jobs disappear and neighborhoods suffer, the tide of opinion is growing that the government may need to step in. While data on the challenges of small business owners is limited, a survey of 937 Hispanic small business owners conducted by the U.S.A. Latin Chamber of Commerce between November 2008 and January 2009 found that most of them said they would not stay in the city because their rents had become so high."
Which is why a coalition of local groups have been advancing a rent arbitration measure sponsored by Councilman Robert Jackson: "The City Council is weighing in, too, considering a Small Business Survival Act that would require businesses to have the option of 10-year leases, renewals and the right to mediation if they cannot reach an agreement."
The Bloomberg administration, however, is sticking to its own formula: "The legislation does not have the support of the Bloomberg administration, which argues that tracking lease negotiations would be too costly because of expenses like hiring staff, and that the need for such a law has “greatly dissipated” because rents have declined."
And perhaps they're right-but their own solutions beg the question: "The problem is so bad that the city has become involved. It has offered grants for worker training, and it held a session last Wednesday on how to negotiate leases." But this is all simply a non sequitor; and the high tax environment-exacerbated once again by the mayor's promotion of another sales tax hike-remains the variable that is sacrosanct. We hear absolutely nothing-either in the mayor's campaign blurbs, or in his policy statements-that address the need to lower taxes on neighborhood businesses. The "T" word has become worse than the "N" word for Bloomberg.
All of which undermines, in our view, any effort to promote Mike Bloomberg as a fiscal maven; a leader whose expertise is invaluable and must be retained for a third term if we are going to be led out of the current recession. It is under the mayor's watch that the store vacancies and small business closures have reached epidemic proportions-a fact that we have been tracking for some time.
In the midst of a severe retail meltdown, when neighborhood shopping strips are being ravaged by a store closing epidemic, only Mike Bloomberg-along with his claque of council clowns-could successfully propose raising the sales tax; and then come up with a cockamamie "worker training" plan to address the horrendous results of his eight year reign of small business error.
In order to reverse the current downword spiral, we need a municipal leader who understands that it is the cost of doing business in the city-a cost that has been escalated under the mayor's misguided stewardship-that needs to be lowered; along with the concomitant high cost of government that has been pumped up on steroids by Big Government Mike. Another four years of the same policies is, as the mayor might say, simply meshuga.