Help for 2nd Avenue Merchants Stuck in Station

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Downtown got dollars while Uptown is still waiting for help

By Kara Bloomgarden-Smoke

Second Avenue businesses are continuing to struggle under the impact of construction in the new year as the end date for the Second Avenue Subway line now stretches into 2018.

Elected reps from the area are once again attempting to come up with plans to alleviate the financial burden felt by the stores and restaurants that line Second Avenue, and are now looking towards lower Manhattan's where small business owners have gotten millions to help them make it through long-term construction projects like the Fulton Transit Center's as a model.

The Second Avenue Subway will offer for some relief to the congested Number 6 train when it is finished in 2018.

In recent years, bills aimed at providing financial assistance to area businesses have passed the State Assembly, and sometimes the State Senate, but were then vetoed by ex-Governor Paterson. Local politicians hope that the administration in Albany led by Gov. Andrew Cuomo will be more open to their ideas to provide struggling business owners with assistance.

Some of the elected officials have modeled their own bills on programs devised by the Lower Manhattan Development Corporation.

As a model for his bill to give a real-estate tax abatement to commercial properties most impacted by construction, Assembly Member Micah Kellner looked at the Small Firm Assistance Program enacted by the LMDC, where businesses suffering the most received up to $35,000.

“It"s a model for what we are trying to do. We are looking at ways this has been done before, said Kellner"s Legislative Director, Paul Curtis.

Lower Manhattan"s Small Business Firm Assistance program may provide a model of economic stimulus for an area impacted by construction, but the funding source is a key difference between projects. The funding for Lower Manhattan came from a federally funded grant and was not enacted through legislation, but the Paterson administration did sign off on an expansion of the small business program.

“Lower Manhattan Development Corporation took funding they had from the Federal government because of 9/11 and used that to create business assistance, said State Senator Liz Krueger. Although there is not the same funding source for Second Avenue, Krueger said that it is a useful model to see how funds were used to assist businesses affected by construction of a transportation hub.

Kellner"s bill would lower the property tax by multiplying the number of square feet by either $2.50 or 50 percent of the building"s tax liability (whichever is lower) for any commercial or mixed use building within the area affected by MTA construction. The bill would require that the decrease in property taxes be passed to the tenant.

The bill originally extended through 2015 but now goes through 2018, to reflect the new end date for the construction project. Although this is the fourth time that Kellner is introducing the bill, he feels optimistic about the chances of it passing's at least in the State Assembly.

“I am confident that the Assembly will pass the bill for a fourth time because nobody wants Second Avenue to turn into a ghost town, said Kellner.

Other local representatives are also re-introducing bills that would help the affected Second Avenue businesses.

In the beginning of January, Assembly Member Jonathan Bing reintroduced a bill that would aid businesses on Second Avenue by providing assistance in the form of grants.

“The Second Avenue Subway Construction Economic Development Grant legislation is an important part of the effort to help establishments negatively affected by the subway construction. This legislation will provide targeted funds to local businesses which have lost revenue during the construction process and help enable their long-term prosperity, Bing said in a statement.

This is not the first time that he introduced a bill to provide economic aid to businesses affected by the subway construction. In 2008, Governor Paterson vetoed a similar bill after it passed in the Senate and the Assembly. In 2008, Bing also introduced legislation that would create a sales tax-free zone, something he plans to do again in the coming weeks.

“The governor said at the time that he was concerned about setting a precedent, but that is no comfort for struggling business owners, said Council Member Jessica Lappin about the bill. “These businesses are struggling and need help. I hope the new governor takes more kindly to their cause.

Joe Pecora, president of the Second Avenue Business Association and owner of Delizia Ristorante & Pizza, said he has experienced the economic impact of the construction first hand. Delizia"s, which has been on the corner of 92nd Street and Second Avenue for 22 years, is hidden behind a tall fence, and the crosswalk directly in front of the restaurant has been diverted to the middle of the block. Pecora used to have a sidewalk café in warmer months, but that hasn"t happened since construction began.

“Foot traffic is down, business is down, rents are down, said Pecora. He estimates that foot traffic is down by as much 50 percent and says business in the area has decreased anywhere from an average of 30 percent to 50 percent.

“A lot of businesses have already closed and I expect more will before the project is over, he said.

While some are looking  to Downtown, others are looking to the Midwest. East Side resident and Columbia Business School student Jared Stone has been examining the problems facing Second Avenue businesses. Together with a team of three other Columbia MBA students, Stone has been looking to Minnesota as a case study.

“In 2010, the cities of Minneapolis and Saint Paul began constructing a light rail system. To aid businesses affected by the construction, the Metropolitan council authorized a 1 million dollar interest-free small-business loan fund, said Stone. Stone thinks that a similar solution could work on Second Avenue and he is in favor of a property tax abatement.

“The rents are too high when you take into account the likelihood of stores on Second Avenue going out of business, said Stone.

As part of a marketing strategy to get people to the stores, Stone started a blog called “The Second Avenue Shopper that features discounts and promotions for Second Avenue stores and restaurants.

Other marketing strategies are being talked about as a possible boon to the area.

“The MTA has said that they want to start being better neighbors and they are talking about printing a ‘Shop Second Avenue" logo on the back of MetroCards and busses, said Pecora. He thinks that if it were easier to envision the finished product, it would help generate excitement for the project. “The MTA should have models of the future train station on every two or three blocks to try and get a sense of how this will look and make it a destination, he said.

Pecora is hopeful that the proposed legislation will be enacted in order to help Second Avenue businesses, and he thinks that it would benefit the city as well.

“It"s good for the merchant, it"s good for the landlord and it"s good for the neighborhood because you won"t have closed stores, said Pecora. “You have real estate taxes getting paid, sales tax for the city and people with jobs, so in the long run it helps everybody. Some business is better than no business.

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