Claudia Rapisarda sits perched on a stool in her boutique on Court Street in Brooklyn. The vibrant hues of her native São Paolo are reflected in the tall mirrors that line each side wall. It’s a small shop, speckled with jewel-toned bangles, patterned neck scarves, and beaded clutches. Many are her design. Business is good, she says, but the threat of displacement is constant.
Gentrification is the big elephant in the room that everyone is talking about. As emerging big-name retailers join the influx to Boerum Hill, demand for space exceeds supply and rent rates escalate. For business owners such as Rapisarda, it’s cause to be uneasy.
In the 12 years that Rapisarda has opened her doors, she says, most of the surrounding locally owned businesses have been forced to leave. She has been one of the lucky few. She signed a 15-year lease in 2003, which she has renewed once and hopes to renew again. Whoever loses their lease loses their business, she says.
Some residents of the community show their support by opting to shop at her store instead of the Splendid, a clothing retail store, across the street. Nobody walks into her boutique with a retail shopping bag, she says. It’s a collective effort to retain the unique value that small businesses offer. But as retail stores draw customers familiar with nation-wide brands, the threat still looms.
“We don’t want big box cookie cutter stores to replace small businesses,” she says.“But that’s how it works in this country. Everything is a mold. If you think out of the box, you get replaced.”
For Rapisarda, retail stores can seem ruthless. “They’re corporate,” she says. “They don’t give a damn.”
Court Street has seen a surge in big-name chain move-ins this year alone. J. Crew signed a 10-year lease in a space that a grocer currently occupies, according to The Real Deal. Splendid, a Los Angeles-based T-shirt line, closely followed just down the street, along with Gant Rugger and W.P. Lavori, an Italian clothing company. This summer, Rag & Bone announced their interest. And that’s not to mention Trader Joe’s, Barneys New York, and Urban Outfitters, who all moved to the neighborhood in years’ prior.
They offer property owners what small businesses don’t. A better offer.
Rent has more than tripled on Court Street in the past five years, from an average of $40 per square foot to $150 per square foot, according to CPEX, a leasing firm that completed 10 deals on the street in under five years. Those prices now rival Manhattan rates.
It’s the same story all across Brooklyn, says CPEX. Last year, 15 million people visited the borough. That has had an immediate effect on businesses. Since 2006, Brooklyn has seen $10 billion in private investments. That’s not to mention the 1 million square feet of retail space development. By 2015, an additional 43,000 jobs will be created, a projection that nearly doubles the current 23,000 jobs this year, CPEX predicted.
Court Street is one of eight streets in Brooklyn with a 100 percent or greater increase in retail rent rates.
For some small businesses, discussing an unfavorable rent rate publically can cause further tension in a landlord-tenant relationship. One renter who asked to remain anomymous for this reason acknowledged a civil dialogue that has existed for nearly 20 years, though rent rates are, nonetheless, “ridiculous.”
“We are really close to our landlord and they are really nice people,” the source says. “But they get whatever they can get.”
Other mom and pop stores, like Blue Marble Ice Cream and One Girl Cookies, down the street, are joining the many companies flocking to Industry City, a 6 million square foot industrial warehouse in Sunset Park that is projected to be “the city’s most dynamic destination for designers, innovators, start-ups, manufacturers, and artists,” according to an Industry City spokesperson.
But Patrick Watson, owner of Stinky Bklyn, says he has noticed that owners of restaurants, bars, and stores are not moving to industrial zones. They’re moving to Crown Heights or Ditmas Park or other neighborhoods that they can more easily afford.
“It’s common knowledge. It’s basic math,” says Patrick Watson, owner of Stinky Bklyn. “You pay a month of rent and break even as a small business. Then, and only then, are you going to work your ass off to make a little extra money.”
A group of small business owners, calling themselves the Court and Smith BID Steering Committee, responded to the surge in rent by launching a new initiative on Court and Smith Streets this spring. “This was a rough winter for many of us and with rents soaring overnight our district of mom and pops needs stability in order to survive,” they wrote on Gogetfunding. “When our leases come up wouldn’t you like us to renew?”
Twenty-four neighborhood residents gave a total of $588 to the fund-raising campaign, a mere 5 percent of the projected $10,000 goal.
“We need to have these extra programs and services in place that back small businesses up,” says Watson. “The alternative is that we say fine, let’s just put a Starbucks on every block. But if we do, something will be lost.”
Big box stores aren’t acting out of malice, says Robert Beauregard, Professor of Urban Planning at Columbia University. “Large ‘chain’ retailers have the ability to pay higher rents than locally-owned stores, though it is likely not their intention to drive up rents,” he says. “It’s not the size of the store that matters but the ability of its owners to do a high-volume and/or high-value business.”
For some, gentrification is not all bad. Mary Cira, owner of Pronto Pizza shop in Boerum Hill, welcomes the change. “Big stores like Trader Joe’s and even food restaurants like Chipotles actually bring more customers,” she says. “They come, drawn to a restaurant they know well and when they walk by my place, they decide to try it the next time. They always return.”Sure, businesses come and go along Court Street, she says. It all depends on how you run your business.
As for rent, Cira says her business, now four years old, is on a 10-year contract that rises at the expected 3 percent each year. “I have a few more years before I discuss a renewal with my landlord, but I don’t anticipate it will be too difficult,” she says. “I’m a good tenant. I pay on time.”