What's with the Rent?
By Dale Kaplan
Commercial rents have been frozen in Paris and that’s where the good news ends. We in Dumbo should be so lucky. Dumbo neighbors, especially those in retail, hospitality, and the healing arts are dealing with significant rent stress. Dumbo landlords are not doing much publicly to assist tenants and in most cases they are not willing to compromise in any meaningful way. Some building owners are slightly more flexible than others, and in rare circumstances gestures of kindness and understanding magically manifest. However, as a result of the sensitive nature of this issue, recipients of good fortune are reluctant to reveal their identities in fear of retribution or breaking a confidentiality pledge.
Although a majority of Dumbo businesses were eligible for PPP, the federal grant money is not nearly enough to sustain them through these very challenging times. Our neighborhood like others in the city are facing an unprecedented crisis and the outcome remains a mystery as to how it will affect the Dumbo streetscape.
Steve West, co-owner of 68 St Jay Bar confesses, “I am eating, smoking and drinking too much.” A Dumbo artist and resident since 1989, his establishment was founded in 2002 as Dumbo’s first art bar. “In those days we were the only gig in town except for Pedro’s. Financially those were our best years. As the neighborhood changed we continued to thrive with a patron mix of original regulars and new arrivals.”
The PPP funding was helpful in enabling us to retain our staff, however,as June approached we realized that we will need a reinvention in order to keep going. We currently offer take out cocktails, but our revenue has gone down 80%. Bars are Phase 3 in reopening and it is a mystery as to when that will happen and who knows how long it will take until people feel comfortable going out for a drink and socializing.”
Steve is hoping that genetics will help play a part in pulling him through this crisis. “If my father survived one of the biggest battles of WWll, I can survive Covid and landlords in Brooklyn.”
West’s landlord Chatov Realty had originally offered West and other tenants the option of paying half of the rent in April and May on the condition of a signed personal guarantee which would have insured a total payback by July 1st. This rather uncompromising deal fell through when it was deemed that commercial leases could not legally be personally guaranteed. Chatov commented that their bank would not adjust the terms of their mortgage and therefore they were unable to lower the rents. Lowering rents also reduces the value of a real estate portfolio and that is why many landlords prefer to keep their space empty until they secure a tenant who can pay the maximum amount.
Steve recently turned his studio located in 25 Jay into an art gallery. The mission of the gallery is to assist young artists who want to make their work public. “The art world is very difficult to navigate, my gallery gives these youngsters their first break”. He was in the midst of planning his next exhibition when Covid hit. “I have suffered a double whammy” says the Michigan born Dumbo pioneer but he vows to fight through this messy situation as he continues to brainstorm a concrete strategy for moving forward. “It’s a work in progress, but we do not have much time.” West’s father survived the Battle of the Bulge in World War ll. Mr. West’s injuries included a shot off pinky and a mouthful of broken teeth. Steve is hoping that genetics will help play a part in pulling him through this crisis. “If my father survived one of the biggest battles of WWll, I can survive Covid and landlords in Brooklyn.”
Four storefronts on the ground floor of 68 Jay Street are currently vacant. Margot, a men’s lifestyle shop closed shortly before Covid hit. On the Water Street side the Barre dance studio moved out in the winter. Post Covid19, the neighborhood lost the Hot House and most recently J and J Nail. The latter is a big loss. J and J Nail salon was the first venue in Dumbo which offered mani pani’s and other beauty enhancing services as well as massage. Considered a temple of femininity, J and J was professionally staffed by hard working, lovely manicurists originally from Nepal who had become an integral and beloved part of our neighborhood. Sadly their departure took place during the shut down and therefore their customers were unable to wish them well. J and J also lent some cultural diversity to a neighborhood that can often seem strikingly homogenous.
As for co-working spaces, businesses that rented from Greendesk are still waiting for their deposits to be returned. They were promised a check in 60 days but as the 90th day approaches, the mailbox is still empty. A majority of tenants moved out when the shutdown began in mid March. Greendesk refused any negotiations pertaining to rent. Their only concession was forgiveness on their 30 day move-out notice policy Most people packed up and left in the middle of March. Greendesk storefront proprietors who are hoping to survive the shutdown are still being charged late fees on rent they can no longer afford. When I asked the owner of Ad Astra boutique on Front Street about her rent dealings with Greendesk, she was very straightforward. “They have not made even one tiny concession”. They said if you do not have the money, you can move out”.
Two Trees Covid crisis policy allows tenants to use a portion of their deposit money to pay part of their rent. They require 3 months deposit when tenants move in. Therefore in April, May and June you can use deposit money for one half of the rent and cash for the balance, They have provided their tenants with legal counseling to help them apply for PPP and EIDL funding. Two Trees has been reported to be generous with a handful of tenants. They have also donated rooms in their Wythe Hotel to healthcare workers. I have heard of one artist whose specially priced artist lease was about to expire and return to market rate. As a result of the pandemic, the discounted rent was extended for another year. You can ignore any late fees on your rental invoice. As per New York State Executive Order 202.28, no landlord is permitted to charge any late rental payments occurring between 3/20/20 and 8/20/20.
My mother Pearl always said “The squeaky wheel gets the oil” and most of the time she was correct. So go ahead and squeak. I have heard of landlords making some exceptions to their policies. So whatever it takes, go for it. If you need a shoulder to cry on, or just to talk, we are here for you at Dumbo Direct. E-mail us at dumbodirectory@gmail.com with a message and your digits. If you are downsizing there are good deals to be had.
Dumbo Person
July 7, 2020 at 3:06 pmIf you really want the landlord of 68 Jay Street to feel some pressure, you should mention the name of the owner, Joshua Guttman. Guttman owns Pearl Realty Management, which owns several entities in DUMBO including Chatov (a holding entity created to own 68 Jay Street). Joshua Guttman is known for owning several buildings that have burned down.
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August 25, 2020 at 4:18 amA good blog! I will bookmark a few of these.. Timmy Chandler Audras
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