On a recent Tuesday afternoon following the closure of his art gallery, Douglas Heller, a glass sculpture dealer since 1973, bounced between meetings in his accountant’s office, reviewing ongoing expenses. 

In May, the Heller Gallery became one of three Chelsea galleries to close its brick-and-mortar location. 

The closures of Washburn, Heller, and Mitchell-Innes & Nash galleries represent a two-fold problem: small businesses can no longer afford Chelsea’s rising rents and art galleries struggle to adapt to an industry altered by the pandemic. The changes have led to artists without gallery representation and businesses being forced out of the area.

“We are driven by passion, not profit primarily,” Heller said. “But you still have to have money to pay the bills.” 

According to a Global Art Market Report released in March, art sales in the U.S. declined 10% from 2022 to 2023, while global dealer sales fell by 3%. Bank of America’s Spring 2024 Art Market Update reported that global auction sales decreased 27% in 2023 compared to 2022, and the average price of artwork sold at each auction decreased by 32%.

Heller Gallery’s closing “weakens the whole industry,” said artist Richard Whiteley, a senior program manager at Corning Museum of Glass. Unlike other galleries that he described as static and unchanging, the Heller Gallery embraced emerging trends. “They kept the industry buoyant and refreshing by presenting new ideas,” said Whiteley.

With the rise of online sales, what began as Heller’s solution to the pandemic quickly became a troubling buying pattern. Although the gallery had an active visitation rate that included students, artists, and tourists, much of its business was conducted digitally, and few pieces made it off the gallery floor during in-person exhibitions. 

Ahmet Korukçu, the founder of Chelsea Art Projects, a fine art advisory and brokerage firm, said the pandemic changed the art landscape. “There was a major shift in consumer shopping trends,” he said. 

Art buyers became more comfortable with online shopping and were more aware of auction databases that alerted collectors to steep pricing within the industry.

“The major effect of these gallery closures is that a huge market correction is happening in the art market,” said Korukçu in an email. “Collectors are more cognizant of prices, and they are unwilling to pay for overpriced art.”

With decreasing sales, gallery owners also had to grapple with rising rents in Chelsea. According to a market report by commercial real estate advisory firm Newmark, the current average cost per square foot in Midtown South is $82.91, up roughly 30% from 2014. Apartments.com reports that the average monthly rent in Chelsea is $4,840, 27% higher than the New York City average of $3,675.

“Our expenses were much greater than our income,” said Joan Washburn, who was the head of the Washburn Gallery for over 50 years. “The effort and loss of money affected many decisions.” 

Christopher Benson, an artist previously represented by the Washburn Gallery, first came to New York in 1982 before relocating to the west coast in 1988.

He remembered when the city was affordable for artists, and when galleries were “little establishments where everyone kind of knew each other,” said Benson. “It was about showing good quality work to intelligent, sensitive people who would buy it.”

But the art market began to change shortly thereafter, when galleries began “squeezing out the little guys,” Benson said, who felt smaller artists stopped getting support. 

“I don’t think New York is the center of anything anymore except money,” he added. 

Veteran gallery owner Lucy Mitchell-Innes said New York’s art market is “beyond recognition.” The company known as Mitchell-Innes & Nash closed its public gallery earlier this year and transitioned to an art advisory space.  

“Our lease was up, and we decided it was a good time to try something different,” said Mitchell-Innes. “Somehow, the pre-COVID model is out of date now.”

Mitchell-Innes said increasing costs of running a brick-and-mortar business have had an impact.

“The cost of rent, real estate, and art fairs is just different,” said Mitchell-Innes. 

Douglas Heller said the changes make him reflect on the old saying, “Build it, and they will come.” And that’s what he tried to do.

“But for the past few years, we’ve had it, and they’re not coming,” he said.