The Plight of Lower East Side Small Businesses

By Evan Burgos

Pepto-Bismol. Nowadays, Rona Economou, owner of a small Greek food stall in the Essex Street Market, keeps it handy. Stress makes her stomach uneasy.

And her right eye, it twitches. Even in seemingly ordinary moments, like when she’s done laboring over the stove, the day’s cooking complete, and stands watch over her spinach pies, pear cake, chick pea salads, and almond cookies, waiting to make a sale. Ophthalmologists say stress is one cause of eye twitching – random moments when the eyeball spasms for a split second.

Economou, 34, no longer takes days off; though she remains outwardly calm, on the inside she is restless. All she can think about is what she lost because of Hurricane Sandy and how she is going to get it back.

“I’m here seven days a week now,” she said, “probably until the end of May to make up some of those losses, to recoup.”

Hurricane Sandy, a massive storm that hit in the final days of October and plagued New York City in myriad ways, did not cause much physical damage or flooding in Manhattan’s Lower East Side. But with sweeping power outages in the city, the neighborhood emerged from the storm feeling battered in another way.

Residents and merchants in the neighborhood say business was completely halted for at least a week, and effectively stalled for up to two weeks as the city worked to get subways up and running. And once power was restored, the local economy didn’t flick back on like a light switch with it. The area’s small businesses and independent proprietors have just begun the long slog back to normal.

“It’s a huge loss,” said Katie Archer, the business services manager of the Lower East Side Business Improvement District (BID), who leads the organization’s community outreach initiatives. “I think the effects of it are going to creep up when people aren’t able to make their rent for November, and it’s going to creep into December.”

An estimated 78,000 New Yorkers are employed within Manhattan’s Community Board 3, which includes the Lower East Side and part of Chinatown, according to the district’s Economic Profile, which is comprised of population data compiled by the American Community Survey.

There are 486 retail businesses within the tighter confines designated by the Lower East Side Business Improvement District, a non-profit that advocates for the area’s property owners and merchants, which is bordered north to south by Houston and Canals Streets and by Orchard and Allen Streets from east to west.  Archer said that, based on grant applications filed with the organization, it is fair to report that several local businesses claim around $1,000 in daily revenue.

Economou has operated Boubouki, her 49-square foot Greek food kiosk, for almost three years. She works for herself and has no employees. Before the storm, Monday was her day off. No more, at least until May, she said. Things are difficult for the small business owner, who was a lawyer for eight years before being laid off – “It was definitely a blessing,” she said – and getting into the food business.

This is what Sandy took from her: one full week of sales, $100 in lost product and $450 in the way of a refrigerator repair, which was blown out in a power surge during the storm. Economou declined to give specific sales numbers, but said her bank account took a significant hit.

The menu at Boubouki is simple and straightforward. The most expensive item is a $5 cup of soup. No single purchase, or even one busy day, can revive her business.

“I couldn’t care about some cheese that I would lose,” Economou said. “But it’s just not working, not making money for days and not knowing when you’re going to go back to work. It was scary.”

She added: “Imagine your salary getting slashed one quarter for the month.”

Economou’s loss was just one tiny sliver of the storm’s overall financial impact on the New York area. For every day that business stalled, the region lost the equivalent of $3.8 billion in economic output, according to The Federal Reserve Bank of New York, which released its regional economic briefing in late November. The loss represented 1.1 percent of the quarterly regional gross domestic product and knocked an estimated 0.4 percent off the country’s quarterly GDP growth, according to the bank.

A chunk of that loss can be attributed to the extended power outage in Downtown Manhattan, which includes the Lower East Side. According to the bank, the primary causes for reduced business in downstate New York was the loss of power, loss of communications and the inability of workers to commute to work.

“The effects of Hurricane Sandy on small businesses in Lower Manhattan have been particularly dramatic,” Maria Gotsch, president and CEO of the Partnership for New York City Fund, said in a statement. “Those lucky enough to escape physical damage are now forced to endure a steep decline in business throughout the area.”

Though it is difficult to calculate an exact figure of the economic impact on the Lower East Side specifically, it is clear that in some cases the cost was high.

For a decade, The Living Room, a bar and music venue on Ludlow Street, has served as one of the neighborhood’s most popular establishments, a place where some musicians get their start, and has hosted the likes of Norah Jones and U2’s Bono. With its two bars and money earned through shows, The Living Room has a couple streams of revenue. Co-owner Jennifer Gilson estimated that in the week-plus her establishment was closed, the venue lost between $15,000 and $17,000.

“Most of us down here are month-to-month,” Gilson said. “A week’s worth, or 11 days worth makes a big difference.”

Gilson was lucky enough to have a sympathetic landlord. She said she was given a break on November’s rent. Still, recovering from the storm is an ongoing process.

“As a business owner you sacrifice yourself first,” said Gilson, who has about 15 employees. “Just keep trying to catch up. It will take a few months.”

Help is available. The business improvement district on the Lower East Side  is offering grants that could total in the high hundreds for up to two-dozen small businesses in the area. Even more money is available from the city.

Mayor Michael Bloomberg has designated $15 million in city funds for grants and loans to assist small businesses. Between the city and private banks, $45 million in financial assistance has been made available to businesses in need, according to the mayor’s office.

Both Economou and Gilson said they applied for grants with the area’s BID. But even if they are awarded one, the aid will make up for just a fraction what was lost.

Economou seems particularly worried. With a concise menu and a variety of smaller items for sale, like cookies, a receipt for Economou could mean just $2 or $3. Some days she has special orders, like for an entire spinach pie, which she sells for $18. One day last week, she had five such orders taped to the wall of her kiosk.

That afternoon, Economou stood patiently waiting for potential customers. The phone rang. Another order for a spinach pie. As Economou took down the order, two men stopped briefly and contemplated a snack, but walked away without a purchase.

When Economou hung up the phone, she wondered aloud, “Where’d those two guys go?”

Every little bit counts.

This entry was posted on Monday, December 17th, 2012 at 2:26 pm. It is filed under Featured2, Manhattan, Manhattan - Downtown, Uncategorized and tagged with Boubouki, Columbia Journalism, economy, Evan Burgos, Hurricane Sandy, Lower East Side, New York City, recovery, small business, The Living Room. You can follow any responses to this entry through the RSS 2.0 feed.