Midtown Has Been Empty, but Other Retail Zones Have Bounced Back

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All eyes are on Midtown Manhattan as everyone anxiously waits to see if and when office workers and tourists will return to what have been eerily empty streets and whether the businesses that line them will regain customers lost during the pandemic.

But other retail corridors across New York are also important barometers of the city’s economy, as well as key to its recovery; a survey of five of them, one in each borough, showed signs of resilience.

“On the whole, business districts outside Manhattan are holding up better and some are really thriving,” said Jonathan Bowles, executive director of the Center for an Urban Future.

This is not to gloss over the hardship experienced practically everywhere.

Corridors outside Midtown that have much in common with it — commuter hubs drawing 9-to-5 workers — have also experienced a dramatic falloff in foot traffic and, therefore, customers for stores and restaurants. The same goes for areas reliant on leisure activities that Covid restrictions shut down.

But retail hubs surrounded by residential development have fared better during a time when many people who normally work in offices were holed up at home for extended periods. When they went out, they spent locally. Supermarkets and other essential businesses have been flourishing.

Larger economic forces that were in play even before the pandemic — such as the decline in brick-and-mortar retail in the face of online shopping — have continued to exact their toll. Empty storefronts were an issue on many streets before Covid, and the closing of Century 21 and Modell’s Sporting Goods outlets during the pandemic has left gaping holes in some shopping districts.

Retailers that remain have scrambled to adapt to ever-changing pandemic policies. Some have branched into online sales, often with the help of merchant groups, business improvement districts or the NYC Small Business Resource Network, a new public-private partnership that has deployed “small business support specialists” to neighborhoods throughout the city. But stores are also competing with street vendors, which have proliferated during the pandemic, and other problems have emerged, including increases in graffiti and litter.

On streets with empty storefronts, asking rents are falling as landlords try to lure new tenants. Some new businesses have opened because they have been able to take advantage of lower rents, more flexible lease terms and the ability to move into a space that had already been kitted out by a departing business.

But store openings do not match closings, and the moratorium on commercial evictions that was put in place to protect tenants during the pandemic is set to expire May 1. Many businesses owe back rent because they had no income during the lockdown and reduced earnings since then.

“Many of our merchants are still in business because of the eviction moratorium,” said Jennifer Tausig, co-chair of the NYC BID Association, which represents 76 business improvement districts across the city. “We don’t know what will happen when the rent apocalypse hits.”

Much is still unknown, and the absence of hard data has left people searching for signs of recovery wherever they can find them.

Thomas J. Grech, president and chief executive of the Queens Chamber of Commerce, estimates that 1,000 of the 6,000 restaurants in his borough have closed for good. But he is busy going to ribbon cuttings for new businesses. And he has noticed more small delivery trucks on the streets — “the Boar’s Head trucks, the folks who supply bacon and eggs to diners.” To him, it means “people are buying sandwiches,” he said. “All that stuff has a ripple effect.”

While Midtown has been a ghost town for much of the pandemic, four miles north, 125th Street in Harlem has at times felt like its old bustling self, a clamorous mix of chain stores, mom-and-pop shops and sidewalk vendors.

For years, Harlem boosters had made efforts to attract “Class A” office buildings and hotels, with relatively little success. But ironically, during the pandemic, that meant the east-west corridor did not suffer the way areas dependent on 9-to-5 workers and tourists have.

Instead, 125th Street had 600,000 residents within walking distance and shopping locally. Those who otherwise would have been heading to offices sheltered in place and, when they ventured out, spent money closer to home.

“We had a lot of the essentials — the banks, the telecoms, even the pawn shops,” said Barbara Askins, the president and chief executive of the 125th Street Business Improvement District. “People needed money and that kept the pawn shops busy.”

All is far from normal, though. The Apollo Theater, which typically attracts about 220,000 visitors annually, was forced to close, eliminating a big draw.

Overall pedestrian activity declined, according to the BID’s counts. After a dramatic falloff during the lockdown of April and May of last year, it rose steadily until, by September, foot traffic was back to February 2020 levels. It dropped again when the city’s gradual reopening was put on hold by the surge in Covid cases last fall and winter.

Vacant storefronts are noticeable, and average asking rents have declined six percent since 2019, according to a report from the Real Estate Board of New York.

Some landlords are trying to hang onto the tenants they have. Leah Abraham, the founder of Settepani and the owner of a building on 125th Street, has lost a tenant and cut the rent of others, with her eye on better days to come. “Harlem has such a strong cachet,” Ms. Abraham said. “I am sure it will rebound.”

One promising sign: Trader Joe’s and Target will be coming to a 17-story mixed-use development on 125th Street at Malcolm X Boulevard that is slated to open in 2023 and will also include some affordable housing, the headquarters for the National Urban League and New York’s first civil rights museum.

Fordham Road, the biggest shopping district in the Bronx, an open-air bazaar strung along a major east-west transportation corridor, went into the pandemic with a three percent vacancy rate, according to the Fordham Road Business Improvement District. Today, the vacancy rate is still three percent. And asking rents, after declining slightly last year, are back up to prepandemic levels, said Scott Silverstein, a broker with Colliers.

All this says something about the staying power of the historic shopping corridor, especially after a year that saw the loss of 40 percent of the borough’s businesses, not to mention the highest Covid death rates in the city and an increase in the unemployment rate to nearly 18 percent.

It also says something about the demographics of the area around Fordham Road. Many people who live nearby are essential workers who continued to commute to work, providing foot traffic to the businesses that occupy 175 storefronts between Jerome and Washington Avenues, the core of the district.

Businesses hustled to survive — adding masks and hand sanitizer to their offerings, shifting to online sales and banding together in what Wilma Alonso, executive director of the Fordham Road BID, called a “mini mall” trend. Where a single establishment might previously have occupied a storefront, now there could be multiple businesses in one location. “It looks like one store,” Ms. Alonso said, “but when you go inside there’s an eyebrow place, a jewelry store and a lingerie person.”

City Jeans, a Bronx-born chain started in 1993, has a store on Fordham Road — one of many sneaker outlets here. Sales are 80 to 85 percent of prepandemic levels, said Marko Majic, community coordinator for the chain.

As in Midtown Manhattan, the office buildings of Downtown Brooklyn have been largely empty during the pandemic. Ditto the courthouses.

The absence of commuters has been felt on Fulton Mall, the eight-block stretch of Fulton Street that is closed to cars and normally sees some 77,000 people a day, according to the Downtown Brooklyn Partnership, a local development corporation. In 2020 foot traffic dropped by 48 percent to less than 41,000.

But there has been a boom in residential development in the area in recent years, with new towers rising around the mostly low-rise buildings on Fulton Mall. And with people sheltering in place and shopping locally, this has helped balance things out, said Regina Myer, president of the development corporation.

City Point, a multilevel indoor shopping mall just off Fulton, has drawn people from a wider swath of Brooklyn to its stores, which include anchor tenants Target and Trader Joe’s. This has benefited Fulton Mall as a whole, said Ms. Myer, pointing to pedestrian counts that reached 91 percent of 2019 levels on the corner of Fulton and Hanover Place in December.

But it’s unclear whether Brooklynites flocking to City Point are also shopping in the chain stores and at independents selling cellphones, children’s clothing, sneakers and flashy gold jewelry on Fulton Mall.

Of the strip’s 83 storefronts, 11 are closed permanently, although some of the closings predated the pandemic and some inactive sites are being marketed for redevelopment.

Gage & Tollner, the recently revived Victorian-era restaurant on the strip, has been doing takeout business since February but will open for indoor dining April 15. On a recent visit, its ornate white-painted facade stood out on a block lined with gated storefronts. “We have no neighbors here,” said St. John Frizell, a partner in the restaurant.

Gage & Tollner is a landmark and by law must be preserved, but other sites on the block are slated for redevelopment, according to Claire Holmes, a spokeswoman for the Downtown Brooklyn Partnership.

Rents on sites not up for redevelopment range from $125 to $250 per square foot, according to brokers, reflecting a slight drop from prepandemic highs. “They were hitting $300 per square foot at one point,” said Peter Ripka, co-founder of Ripco Real Estate.

But Mr. Ripka was bullish about what he called “one of the granddaddies of the great borough streets.” “Fulton Mall will come back,” he added.

Flushing’s Chinatown is typically teeming, especially on weekends when people who live outside Downtown Flushing make pilgrimages to its dim sum restaurants and Asian specialty stores. The neighborhood is a major shopping district and transportation hub.

The district went uncharacteristically quiet in early 2020, long before other parts of the city shut down, when many Chinese business owners here recognized the seriousness of the pandemic, and hostility directed at Asian-Americans became more overt. Area residents were among the first to don face masks, shelter at home — and close stores and restaurants.

Many of these businesses have not survived the year since then. Nearly half of the barbershops and hair and nail salons, many of which had been situated on side streets, have closed. So have about 35 restaurants, including longtime favorites like Joe’s Shanghai and Good Kitchen. Banks, medical offices and grocery stores, on the other hand, have done well, and a new supermarket has just opened in a space Modell’s previously occupied.

There has been a 16 percent increase in consumer interest for shopping, restaurant and food categories in the Main Street corridor since the beginning of the pandemic, according to Yelp, at the same time that the share of consumer interest declined 49 percent for Midtown.

These days the street feels as busy as ever, but the vacancy rate has risen to five or six percent from less than one percent, said Dian Song Yu, executive director of the Downtown Flushing Transit Hub BID. “We’ve never seen that before,” he added. Rents have dropped about 15 percent, said Michael Wang, founding partner of Project Queens, a brokerage. But deals are being made.

“Pre-Covid, if you had a retail store in the main strip you would have 30 offers,” Mr. Wang said. “Now the demand is much lower, but you still have five people very serious about moving in.”

The city’s most suburban-style, car-centric borough doesn’t have the density other parts of the city do, and many of its retailers line small commercial corridors and strip malls.

The former have fared better than the latter during the pandemic, said Linda M. Baran, the president and chief executive of the Staten Island Chamber of Commerce. While most of the stores and restaurants along places like New Dorp Lane and Forest Avenue have been holding their own, the strip malls “are where I’m seeing vacancies,” she said. Six percent of the borough’s businesses have closed for good, according to a recent survey by the chamber.

Bay Street, on the North Shore, is in its own category. It stretches from the Staten Island Ferry terminal south through three neighborhoods that together make up Downtown Staten Island: St. George, Tompkinsville and Stapleton.

Home to mostly mom-and-pops, Bay Street was regarded as a work-in-progress before the pandemic. A 2017 city report counted 232 storefronts, many in poor condition, and put the vacancy rate at 21 percent. The rate had declined somewhat by early 2020, however.

St. George, the neighborhood most familiar to day trippers who arrive by ferry, is the area that has seen the greatest falloff in foot traffic. This is where borough hall, courthouses and cultural institutions are clustered, and the businesses here have struggled ever since government workers were sent home, tourists stopped riding the ferry from Manhattan and the St. George Theater closed to visitors.

Some restaurants have pivoted to takeout (and Enoteca Maria, famed for its rotating cast of chef grandmas, to selling bottled sauces). Some have opted to shut their doors and wait out the pandemic. But some new food purveyors have opened, including on Bay Street.

Empire Outlets, an outdoor shopping mall near the ferry terminal, was still finding its footing before the pandemic. It has lost 65 to 70 percent of its visitors and four retailers, said Joseph Ferrara, a principal at BFC Partners, the mall’s developer. However, foot traffic increased 20 percent between February and March and parking jumped 140 percent.

Empire Outlets and other area businesses are banking on the return of municipal workers, now scheduled for June 1. NYC Fast Ferry will start providing service to St. George from Battery Park City and Midtown Manhattan this summer. And on the horizon: the recently announced revival of the New York Wheel project, albeit in a scaled-down form and not until 2025.

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