Supporting Small Business? Chelsea Residents Know How Hard It Is

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Small businesses in Chelsea face rent hikes. Photo: Mei-Yu Liu.

In the first two presidential debates, both President Obama and his Republican rival Mitt Romney talked about supporting small business, but Chelsea deli owner Patricia Balejo doesn’t see it. Over the past 10 years, her old customers have moved away, her rent has gone up, and chain stores have moved into the area.

Her husband, Luis Balejo, pointed at the floor and said, “Five years ago, one square foot cost us 100 bucks a month, and now it has become 200 bucks.” They pay $10,000 each month for their small Ninth Avenue deli.

A dry cleaner store nearby, on the corner of Ninth Avenue and 17th Street, pays $4,000 in monthly rent. The owner, Antonius Luthar, said that he was not sure whether he would stay in Chelsea in the future, in the store he inherited from his uncle. “One bedroom can cost up to $3,500 a month now,” he said, speaking of the apartment rental market. Everything about the neighborhood is getting more expensive.

According to the real estate website Trulia, the average listing sale price of residential Chelsea properties is $1,990,610, and from June to August, the median sales price was $1,563,750. The average price per square foot in Chelsea is $1,402, an 8.1 percent increase over the same time last year. The Balejos see new residents, mostly Asian and white, moving in and coming to their store. “Some of them leave us more tips,” they said. But the turnover rate has picked up, according to their neighbor. “They actually don’t stay long, because the rent here is very expensive.”

The High Line Park has brought in tourism and developers, which according to John Poswell, the co-chair of Community Board 4’s Waterfront and Park Committee, is beneficial to the neighborhood.

But not all small business owners agree. “We tried to make profit from the tourism, but didn’t really make it,” said jewelry retailer Laurie Levil, who runs a small store in the neighborhood. “The tourists just want to walk around. They don’t buy things here.” Levil said the late night noise from Park, a newly opened bar near the High Line, annoyed her and the neighbors. “People have fun here, but our kids need to sleep,” she said.

The Chelsea Market offers its businesses a steady stream of tourists, in addition to customers who live and work nearby. Sarah Levine has been working at the butcher store Dickson’s Farmstand Meats for three years, and she says the Market is a more stable environment than a stand-alone store would be. “Lots of tourists come and buy things here,” she said.

“It [the restaurant] has been stable,” said Roji Sherpa, a clerk in Friedman’s Lunch, another independent business there. “Many tourists come here, especially on weekends.”

Aylon Hardar is the general manager at Ronny Brook Dairy Farm, a dairy goods store in the Chelsea Market that plans to add another store in SoHo. “The Chelsea Market is a fantastic location,” he said. “In summer there are more tourists. The High Line brings in more people.”

Even chain stores in the Chelsea Market are doing better than they do at other sites. The 13-year Hale & Hearty Soups has 28 stores in the city; the Chelsea Market spot is their third one. “This is the most profitable one,” said Wilhemenia Ramos, the assistant manager. “There are even tourist buses stopped here,” she smiled. “But our best season is winter, during Christmas and Thanksgiving.”

Throughout Chelsea, chains are replacing small businesses, one by one. “They are becoming dinosaurs,” Balejo said of the big chain stores that dominate the landscape. Patricia, his wife, said with a smile, “The develop of Chelsea is good. Good for Chelsea, not for us.”