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De Blasio’s Plan for SoHo/NoHo/Chinatown Small Business: Replace Them With Big Box Chain Stores

A plan that does not do what it purports to do is a bad plan. A plan that, on top of that, does the opposite of what it purports to do is a very bad plan. And by these measures, Mayor de Blasio’s SoHo/NoHo/Chinatown upzoning is a very bad plan indeed. Over the past several months, we have shown:

-how much of the plans’ promised affordable housing will likely never materialize, because the plan encourages the choice of profitable market-rate development without affordable housing.

-how the plan creates an incentive to buy out or harass tenants of the 700+affordable housing units in the neighborhood so as to eliminate those units, demolish those buildings, and replace them with much larger new market rate development

-how the burdens of displacement triggered by the plan would fall disproportionately on elderly, Asian-American, and low-income residents

-how the plan would make the affected neighborhoods as a whole richer and their housing less affordable than they currently are. 

-how the essence of the plan would look in cartoon form.

The response from proponents of the plan to this evidence has consisted of ad hominem attacks, misrepresentations, and good old burying their head in the sand. Hope, however, springs eternal. And we hope the City will at some point take an interest in the affordability of these neighborhoods and in the welfare of its residents, and then forsake their god-forsaken plan. While we wait for that to happen, let’s shift gears and discuss the detrimental impact that de Blasio’s proposal would have on the local business landscape. 

Retail and Restaurants Currently

Currently, the rezoning area generally allows a variety of manufacturing uses without restrictions. It also allows retail, live-work units, and office space, but only above the ground floor. There is, of course, plenty of ground floor retail and restaurants throughout these neighborhoods. The location of such establishments there, however, requires a dispensation that is granted to businesses that pre-existed the zoning and to those that successfully apply for a zoning variance or, more commonly, a special permit. Special permits are granted at the discretion of the City Planning Commission through a public process aimed at assessing the impact of allowing otherwise unauthorized uses. As a general matter, they are regarded as a less efficient or predictable way of regulating land use than zoning. This has been one of the rationales given for the SoHo/NoHo/Chinatown rezoning. 

Retail and Restaurants Under de Blasio’s Plan

De Blasio’s rezoning would allow ground floor retail, as well as restaurants and bars, throughout the entire rezoning area, without any size limitation (Village Preservation and our allies support changing the zoning to allow ground floor retail as of right, but if reasonably limited size — 10,000 Sq ft for stores, 5,000 Sq ft for eating and drinking establishments) . The City justifies this part of the massive upzoning–upzoning, because it allows less restrictive uses–with two somewhat contradictory arguments: 1) that the change is necessary in order to meet demand for these kinds of uses, and 2) that it is necessary in order for the zoning to “catch up” with the existing conditions of the neighborhood. Both arguments are wrong. 

Fallacy 1: Responding to “Demand”

The first contention points to a surge in special permit applications in recent years as evidence of a vast number of establishments out there that would set up shop within the rezoning area but for its zoning limitations. One problem with this argument is that it fudges the facts. There has indeed been an increase in special permits applications by retailers and restaurants, but only of a certain kind. Applications from businesses under 10,000 sq ft (the kind we would allow) increased from about 32, between 1981 and 1999, to about 71, between 2000 and 2009. The increase in applications from larger businesses, however, hardly bears mention. It went from 2 to 6 during the same time periods. This hardly paints a picture of unmet demand that would justify opening the doors to big box retail and giant restaurants and event spaces, as the City’s proposal does. Moreover, the City’s interest should lie with appropriate businesses eager to open in the neighborhood, and not with businesses in general that wish to do so. By this logic, the number of recent special permit applications by retailers and restaurants bears less relevance than the number of permits granted, since the latter implicitly reflects the City Planning Commission’s own assessment of the applicants’ appropriateness for the area. Those numbers contradict even more the City’s contention. The special permits granted to large businesses increased from 1 between 1981 and 1999 to 3, since then, leaving us to wonder why the need to now invite, without limitation or public input, such oversized businesses into the neighborhood.

Fallacy 2: Matching “Reality”

The City’s second justification for its retail and restaurant “plan” is a desire for the zoning to better correspond with current retail and restaurant uses in the neighborhood. This rationale also flies in the face of the evidence. Unlike the commercial free-for-all enabled by the City’s proposal (and long sought by commercial landowners), the size and location of businesses throughout the area fall into a clear pattern. 

No more than a dozen establishments exceed 10,000 sq ft, and most of those that do are located along Broadway. This is not because of lack of available and suitable space; but because businesses of that size are generally incompatible with the residential uses in most parts of these neighborhoods. This video illustrates why. 

Video taken at 8:30am in front of UNIQLO (546 Broadway), which occupies about 35,000 square feet and has outstanding violations of their special permit.

Large-scale businesses tend to operate around the clock, handling a volume of traffic and merchandise that is disruptive to nearby residents. This was the case with Zara (503 Broadway, about 40,000 sq feet), which was found in violation of its special permit and forced to stop deliveries along Mercer Street; and such would have been the case with the 12,000 sq ft food hall at 594 Broadway that was denied a permit to open, because of its “adverse effects on nearby noise and congestion levels as well public safety.” The Mayor’s proposed ‘Wild West’ arrangement would do away with the regulations that have in the past managed such conflicts, leaving them to be resolved in the future by…who knows, perhaps showdowns at noon?

What About Small Businesses?

Good question. One would think that a plan for the development of an area would seek to not only preserve existing independent businesses, but also encourage new neighborhood businesses that might serve current and future residents. And the Mayor’s plan claims it is aimed at helping the retail environment of this area. But de Blasio’s proposal would do nothing of the sort. To the contrary, rather than draw nuanced distinctions based on the needs and qualities of different parts of the district, it simply lifts restrictions without differentiation throughout the entire district. This creates the conditions for the displacement of small businesses, because, however much they may benefit local neighborhoods and the local economy, these businesses cannot outbid big box retailers and large corporate players for commercial space, and especially not in the aftermath of their pandemic struggles. This, then, is the future that de Blasio’s plan envisions, one that benefits not small business, not residents, and not the city, but primarily large property owners and developers — the main group for whom this plan was apparently created in the first place.

To learn more about the problems with the plan, go here.

To get a flyer that covers the basics and that you can share with friends, go here.

To tell public officials to oppose the plan, go here.

To keep informed, email “SoHo” to info@gvshp.org

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