Lappin Meets with Merchants and
Promises Effort with RIOC on Leases

City Councilmember Jessica Lappin spent two and a half hours with several Island merchants on Monday, seeking information about the Island’s mercantile situation – which merchants have leases, which do not; which ones have sought additional retail locations on the Island, and with what level of success or delay. A mixed picture emerged.

Meanwhile, Lappin and four other politicians representing Roosevelt Island sent a letter to RIOC President Herbert E. Berman. "We call on you to do what’s right," the letter ends, describing that this way: "assure Island residents the continued availability of the local businesses upon which they depend by offering merchatns the security of a lease."

Merchants had complained, both in conversations with The WIRE and in a February 16 RIOC meeting about real-estate planning, that without leases, they cannot invest in their businesses.

At the Lappin meeting Monday, Nancy Rodriguez of New York National Bank (which has a lease) told the councilmember, "We’re just concerned about the merchants – those that have applied for loans – but we can’t help them if they don’t have a lease."

About half the merchants who rent from RIOC appeared at the Lappin session. None had good words to say about RIOC’s current real-estate process, in which a Request for Initial Proposals (RFIP) has been floated to the real-estate community. One RFIP, which Real Estate Weekly described in a headline as "Roosevelt Island Space For Sale," seeks to consolidate the Island’s retail spaces under a master tenant. Meanwhile, RIOC has not offered existing Island merchants new leases, and some have occupied their storefronts on a month-to-month basis for periods ranging up to four years.

Merchants also complained that they were "stonewalled" by RIOC’s real-estate representative, Paul Mas of Jones Lang LaSalle, when they sought lease extensions or to rent additional storefronts that had become vacant, such as the bakery, which has now been vacant for over three years. Perhaps coincidentally, late last week Mas was observed showing the vacant bakery and pizza-parlor spaces to interested Island merchants, and Jones Lang issued papers listing available retail spaces (see separate story).

One merchant who had expressed interest in the bakery space shortly after it became vacant, even offering to pay the accumulated back rent on the space, said that about three months after completing required paperwork, RIOC told him that the space had been turned over to "a real-estate consultant," Mas. "It was like they had never seen me," said the merchant. "Why do you need a realtor if you already have a tenant in front of you – a tenant who is up-to-date on his rent?"

Another merchant said RIOC referred him to Mas. "I spoke with Paul Mas at the urging of some of the people at RIOC who gave me his number, and said, ‘Call Paul. He’s the guy to speak to.’ Initially, I was just stonewalled by Paul. He said, ‘Well, you know, we’re looking at a couple of propositions and changing the commercial space around a little bit. I said, ‘I’m happy where I am,’ and he said, ‘Well, we’ll have to see. We’re going to be making some adjustments.’" The merchant still has no lease.

Lappin was explicit on the subject: "You should have a lease," she told the merchant. She has scheduled a meeting with RIOC President Herb Berman in an effort to seek resolution on some of the complaints.

[In general, merchants are not fully identified in this article because some apparently fear that being quoted will affect the way RIOC and Mas handle their cases. Those without leases fear a short-term termination of their leases, or rent increases they cannot afford.]

Pediatrician Dr. Katherine Grimm was at the Lappin session. Although her professional office is rented from Rivercross, not RIOC, she was present to express her support for the merchants. "Many of the merchants work very long hours, and it’s not as though they’re making a big killing financially. I’ve been concerned about the merchants not having leases, which I think they justly deserve. I’ve been concerned about spaces that are vacant for prolonged periods of time, which I don’t think makes any sense at all."

Grimm continued, "I think there are some people in RIOC who have dollar-signs behind their eyeballs and think that all of a sudden they’re going to be able to make a lot of money on this space. But the important role for the storefronts is really to serve the community. The community needs these kinds of storefronts, like the pizza place and the flower shop and the DVD store."

She expressed doubt that the retail spaces will increase greatly in value with the opening of new apartment buildings at the Octagon and in Southtown: "A lot of people go off-Island for services, and the peoplewho are going to be in the condos [in Southtown] will go into Manhattan; the people at Octagon are going to take the bus right past the merchants and probably not stop very often, so I don’t think that those buildings, even though they’re expensive buildings, are going to bring that much in the way of money to Roosevelt Island."

Grimm described the conversion of the Sloan’s Supermarket at Motorgate into a Gristede’s Megastore as a period of crisis for Island merchants. It effectively ended the era of no-compete clauses in Island commercial leases. "When Gristede’s Megastore opened up, that became competition for a number of small businesses. Bigelow Pharmacy shut down because of Gristede’s, which was very sad, because it was right next to the professional suites and it was much easier for patients [leaving medical offices] to fill prescriptions. The card and gift shop [newstand] suffered because of that. The flower shop is hanging by a thread. We do like to have competition, but sometimes competition drives people out and you end up with a ghost town... Sometimes I think it was useful to have what the original [non-compete] plan was. It was totally violated when Gristede’s went into business, and that was the beginning of a decline."

The politicians’ joint letter to RIOC tried to make the case for RIOC matching merchant loyalty to the Island with loyalty to the merchants: "Roosevelt Island’s merchants have shown their commitment to this unique community through their years of faithful service. We find denying them the security of a lease... unacceptable. RIOC’s job is to manage the Island with the interests of the residents in mind. In our opinion, leaving loyal Island merchants without the security of leases is not fulfilling the agency’s responsibiltiies."