Small Businesses Thriving in Landmarked Areas

NEW YORK CITY—There’s been much concern about the challenging retail environment in New York right now, and much debate about the causes. Spiraling retail vacancy rates and the closure of beloved businesses have led to finger pointing at landlord greed, e-commerce, overzealous rules enforcement, and even landmarking, which some claim puts small businesses “in a bureaucratic straight-jacket.”  But in fact, a first-of-its-kind study we recently released indicates that landmarking not only does not hurt the retail environment for small businesses, it might even help them.

Working with the Cooper Square Committee and the East Village Community Coalition, Village Preservation recently did an analysis of a survey of every storefront in the East Village—from 14th to Houston Street, the Bowery and 4th Avenue to Avenue D. Like many neighborhoods, the East Village has had a disturbing rise in retail vacancies, with many longtime businesses shuttering and storefronts sometimes remaining empty for months or even years.

We were not surprised to find an overall retail vacancy rate of 15%. What we were shocked to find, however, was that the non-landmarked parts of the neighborhood had consistently higher rates of retail vacancies, while the landmarked sections of the neighborhood, spread across nearly 20 different blocks, between the Bowery and Avenue B, had consistently lower retail vacancy rates. In fact, the retail vacancy rate in the landmarked sections was only a modest 7%, while on non-landmarked (and chain-store heavy) corridors like 14th Street, Third Avenue, and the Bowery, the retail vacancy rate was as high as 31%.

What’s fascinating about this is that the landmarked as well as non-landmarked areas cover all parts of the neighborhood—east and west, north and south, avenue and side streets. So it’s hard to identify any other factor which might distinguish these areas from one another except that they are either landmarked or not.

Certainly no one can or should take away from this that landmarking is the solution to the challenges our small businesses and retail corridors face. First of all, of course not all areas are appropriate for landmarking, and even if they were, clearly much more study is needed to see what the impact is elsewhere. But what this unique apples-to-apples comparison shows is that certainly at least in the case of the East Village, landmarking does not appear to contribute to any greater burden upon small businesses. And if anything, those small retail businesses located within landmarked areas seem to be thriving as compared to their counterparts on non-landmarked streets just a block or two away.

And it’s not just in the East Village that we’re seeing enthusiasm for landmark designation among small businesses. A group has recently been formed in the new Sullivan-Thompson Historic District on the border of SoHo and the Village to promote local independent shop owners in that area on the basis of its historic character, now preserved by landmark designation.

What this points to more than anything is that landmarking can be a part of maintaining a healthy, economically vital neighborhood. It is both a reflection of and a tool for instilling neighborhood pride, and helps preserve the kind of distinctive and desirable neighborhood character that residents and business want to be in, and shoppers want to come to. 

As it becomes easier and easier to buy online and commute virtually, the distinctive character of a neighborhood will play a greater and greater role in where people chose to live, shop, and seek entertainment. Landmarking is far from a panacea for all that ails our cities.  But, perhaps somewhat ironically in our rapidly changing world, it can be an important and helpful part of a strategy for success given the both new challenges we face and the new options we have at our disposal.

Andrew Berman is the executive director at Village Preservation, Greenwich Village Society for Historic Preservation. The views expressed in this article are the author’s and not those of ALM Real Estate Media Group.