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MONEY

NYC Shutters Small Businesses in the Name of Progress
 

As New York City clears a gritty industrial patch near Citi Field to make way for new development, we offer a eulogy for the small businesses destroyed.

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On a day that's become known around the country as Small Business Saturday, dozens of small businesses just east of New York City's Citi Field in Willets Point, Queens, may shut their doors.

As part of a $3 billion redevelopment plan that will include a hotel, a retail mall and a restaurant, the city is giving existing business owners until Nov. 30 to accept an offer of 12-months rent to vacate their shops. If they wait till January 31, owners will get just six months rent. If they hold out, tenant businesses may wind up with nothing at all.

Eminent domain--the taking of private property for the public good while fairly compensating the owners--has a long and not always noble history. The power has traditionally been used to clear the way for bridges, highways or other clearly public uses, but in recent years, governments have increasingly used the tool to benefit private interests in the name of generating more jobs and taxes.

Just down the road in Brooklyn, for example, New York used the power of eminent domain to raze private homes and businesses to make way for a complex called the Atlantic Yards, which today is home to the Barclays Center, a sports arena where the Nets basketball team plays. In the last few years, the drugstore chain CVS has been both the victim and the beneficiary of eminent domain in cities around the U.S.

As eminent domain cases go, the Willets Point eviction happens to be pretty clear legally. The city already owns most of the 32-acre swath of land in question. The "Iron Triangle," as it's long been known, is brimming with gritty auto-body shops and tire-replacement service centers. There's plenty of garbage, broken glass and rusted car parts to go around, along with potholes and deep, sludge-filled culverts. The Queens Development Corp., the company developing the properties that will replace the Iron Triangle, is reportedly facing a $150 million price tag to clean up the area's ground pollution before it can begin to build.

Not only does the area fit the description of "blighted"--a key factor, should the city decide to invoke eminent domain to dispatch the remaining land owners--it occupies prime real estate in the shadow of Citi Field, which the New York Mets baseball team calls home.  For decades, the city has argued, justifiably, that the property could be put to more productive use, whether measured in tax generation, job creation or enhancements to quality of life.

And yet it’s hard to cheer when entrepreneurs lose their businesses.

In the case of Willets Point, the payment the city is offering may not remotely cover the costs of relocating. The opportunity cost in foregone business, the cost of rebuilding a base of loyal customers, the price replacing equipment: The city’s offer doesn’t appear to make any effort to take these factors into account. "They gave me like $15,000 to leave the place," shop owner Johnny Yaqubi told WNYC. He added that finding a new shop has been challenging, as the city's inventory of available industrial-use zones is slim.

And while the new development will undoubtedly improve the appearance of the Citi Field’s environs, something will be lost, too. The auto-repair and tire shops of the Iron Triangle represent the first businesses for hundreds of immigrant entrepreneurs, as well as a hard-scrabble living for their workers, many of whom have few other options to turn to now--certainly not in the tony shops likely to populate the new mall.

The new mayor of New York is willing to spend a great deal of prestige and taxpayer money to make the city even more hospitable to new businesses. While we understand why New York decided that the Willets Point businesses have to go, we think it’s worth noting that they're entrepreneurs, just as much as the tech entrepreneurs of Williamsburg and the Flatiron district. And they deserve better.

IMAGE: Alamy
Last updated: Nov 27, 2013




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