Online News From The Tribeca Trib

Ousted Owners Decry Scarce Options

by Barry Owens

Arthur Castle, a statistician with more than 25 years in the business, suffers from what he calls a maddening occupational hazard. So ingrained is his habit of viewing the world by the numbers that he can't even go to the opera without fixating on the players in the orchestra and taking note of the male-to-female ratio in the violin section.

So it was not surprising that during a recent stroll on the blocks surrounding his office at 198 Broadway, Castle counted the number of vacant buildings-all being converted to condominiums -and calculated the square footage of lost commercial space inside.

Unfortunately for Castle, this was no trifling exercise. Along with the owners of 140 other businesses in the buildings on the east side of Broadway between Fulton and John Streets, Castle will soon be searching for affordable office space nearby.

"We're not looking for fancy space, just equivalent space," said Castle. "And there is simply not enough small space down here to move into."

All but one of the buildings on Castle's block will be demolished to make way for the new Fulton Street Transit Center. The historic Corbin Building on the corner of John Street will be preserved, but will be vacated and incorporated into the center.

The Metropolitan Transportation Authority was expected to make a purchase
offer to the Collegiate Church Corporation, the owner of the properties, as early as this month. Once the MTA assumes ownership, the tenants will have 90 days to find new places to do business.

"It will be sink or swim," said Marlene Burke, a psychotherapist with an office at 11 John Street. With more than 100 businesses looking for space in the neighborhood at the same time, she said, many will not find an office in Lower Manhattan where they can afford to hang a shingle.

"It's not Katrina here, but we're drowning," said John Davis, a film and television set designer with a studio and apartment in the Corbin Building.

Many of the tenants on the block need office space no larger than 500 square feet, and nearly all say they cannot afford to spend more than $25 per square foot. Of the 90 million square feet of office space in Lower Manhattan that the Downtown Alliance lists on its Web site (which Castle checks frequently), only four spaces in that size and price range turned up in a search last month.

The street-level retail stores and restaurants that benefit from pedestrian traffic and first-time customers are likely to fare better with relocation than the office tenants, who rely on a local and loyal clientele. Among those businesses are dentists, an optometrist, a chiropractor and small employment agencies.

"If I go further than five blocks, I'm ruined, ruined, ruined," said William Saad, a tailor with a shop at 198 Broadway, who joined other tenants for a rally on the steps of City Hall last month.

In his shop on a recent afternoon, Saad stitched a hem

into a pair of slacks and wondered aloud how his customers will find him once he clears out of his tiny space on the ninth floor.

"They don't even have my telephone number," he said. "Their feet just know how to come here."

The office tenants also include the types of small businesses that have few requirements for their spaces, other than affordability. An importer's small office on the 12th floor houses only two computer desks, a fax machine and four clocks on the wall.

Down the stairs four flights, in the office of Shearwater Sailing, inflatable buoys and coils of line rest on the floor. It is not the sort of equipment that business owner and sailor Thomas Berton said he can picture hauling through the lobby at, say, 7 World Trade Center.

"It really limits our options," said Berton, who was on the phone with a real estate broker when a Trib reporter stopped by.

The tenants began pulling together in 2003, when they learned that their buildings would be condemned under eminent domain. They gathered for informational meetings with the MTA and met with the Downtown Alliance, which runs Lower Manhattan's business improvement district, and other business groups and public officials to map out their future.

"The Alliance is interested in working with the small businesses there and the MTA to make sure that each of the businesses can remain in Lower Manhattan," said Eric Deutsch, President of the Downtown Alliance. "It may not be possible to help all the businesses," he added.

Last month the tenants' group, newly christened as The Ground Zero Small Business Association, paid visits to Community Board 1 and, with the support of Councilman Alan Gerson, held a press conference on the steps of City Hall.

"If we just sat around and did nothing, all we would get from the MTA is moving expenses," said Katherine Hill, the owner of a graphic design business at 11 John St.

Tom Kelly, an MTA spokesman, said that the tenants should battle with the city for additional tax breaks and not with the agency that is working to assist them in relocating.

Operating under federal guidelines, the MTA is offering affected businesses up to $20,000, based on yearly income and their relocation needs. Businesses with built-in equipment, such as ovens and sinks, can qualify for additional funds to cover the cost of replacement.

Kelly said that about a quarter of the tenants had signed agreements. The agency is also providing tenants with the services of a broker.

"We have lived up to our commitment and worked with these people and done everything possible to assist them," Kelly said.

But tenants still face the hurdle of finding appropriate office space. "I'm not looking for a sack full of money," said Saad. "Just a good a lease."

Tenants hope that they can pressure the city to offer subsidies to landlords to convert large office spaces into smaller, affordable units. Assemblywoman Deborah Glick wrote a letter in late October to Robert Walsh, the commissioner of the city's Department of Small Business Services, urging the department to consider such an arrangement.

So far, Castle said, representatives from the department have yet to sit down with the tenants.

At a meeting arranged with the department late last month, the tenants were instead met by a representative of Seedco, a small-business loan agency contracted by the city.

Community Board 1 is scheduled to consider a resolution this month calling for subsidies for the tenants as well as additional funds from the MTAand from the Lower Manhattan Development Corporation to assist them.

Some of the affected tenants moved into their buildings after Sept. 11 to take advantage of low rents, but many have operated there for years and struggled to keep their doors open following the terrorist attack. Some took out loans that they are still paying back.

"The reality is, we're going to be in the hole for many years," said Davis, the set designer, adding that he and his wife, a photographer with whom he shares his studio space, will likely move out of the city.

As for Castle, he said that it is unlikely that his business will remain in Lower Manhattan. The numbers are not in his favor.

"Look at how many offices were lost when this one converted," he said, pointing out another commercial building that is being turned into condos behind the familiar blue construction scaffolding-this one, at Nassau and John Street, with a large sign promising "Luxurious Tranquility."