How Will Small Businesses Survive the L Train Shutdown?

In early 2019 the L train in New York City will shut down for 15 months to repair damage caused during Hurricane Sandy. Leading up to the closure, VICE will be providing relevant updates and proposals, as well as profiles of community members and businesses along the affected route in a series we’re calling Tunnel Vision. Read more about the project here .

While the largest, lingering questions surrounding the shutdown of New York City’s L train have (for good reason) focused on transit—as in, what’ll happen to the 225,000 New Yorkers who ride it in between Manhattan and Brooklyn every day?—there is also one of industry.

Brooklyn, the most populous borough with over 2.6 million people, has seen a 21 percent spike in the number of new businesses since 2003, a much higher jump than the rest of the city. Employment itself grew 28 percent in that same time period. And nowhere is this growth more apparent than off the L train, with major thoroughfares like Bedford Avenue, Montrose Avenue, Grand Street, and Broadway witnessing a slew of small, primarily independent stores pop up just as quick as the swaths of people moving in. (As one of our earlier articles mentioned, 106 restaurants and bars in Williamsburg filed for liquor licenses in one month in 2013 alone.)

Therein lies the trouble: as the L train ballooned in ridership over the years, so, too, did local businesses’ reliance on it. So it’s safe to say that bodegas aren’t the only ones in north and east Brooklyn who are gulping down the April 2019 deadline with dread.

“These neighborhoods, Williamsburg in particular, are probably some of the more dependent neighborhoods on a single line than most other neighborhoods, in terms of population and the concentration of small businesses there,” Andrew Hoan told me.

Last December, Hoan was named the president and CEO of the Brooklyn Chamber of Commerce, which, on its website, says it’s the “largest and fastest-growing” body of its kind in New York State. He entered the position at a time when the borough is facing its greatest transit crisis to date, and so the Chamber will be tasked with advocating for, and navigating, its burgeoning business community during these uncertain times.

VICE sat down with Hoan to discuss concerns, and contingency plans.

VICE: I wanted to first ask you about the survey that the Chamber helped out with last October. What were the top concerns that small businesses voiced then about the shutdown?
Andrew Hoan: We did this survey in conjunction with the Greenpoint Chamber of Commerce, and it had some pretty revealing information. 40 percent of the businesses we surveyed expected a loss of up to 50 percent in their business. That tells you that the sentiment amongst the small business community is that this is a financial, albeit temporary, disruption, as for what their income is expected to be, and obviously that has impacts on employment.

75 percent of the businesses we surveyed said their employees take the train. So three out of every four employees are dependent on this. A lot of the conversation has been around, ‘How do we get people to and from Brooklyn to Manhattan?’ But the folks we’re talking about here, they’re probably Brooklynites that are trying to travel to and from Brooklyn. So not only do you have to solve the East River access issue, you have to solve the intra-Brooklyn issue, which stands on its own. It’s a unique perspective, because it speaks to the development in Brooklyn. If we were talking ten years ago, you’d probably be asking, ‘How are we gonna make sure people get to work in Union Square?’ But now, more than ever, Williamsburg is clearly a destination in itself. So it talks about how critical intraborough transit is, as opposed to interborough; both are critical, but now intraborough has become much more significant.

A fourth of all the businesses said a fourth of their customers take the L train. A fourth of businesses said that over half of their customers take the L train. And then a fourth of businesses said that three-fourths of their customers take the L train. So you can see, at a minimum, the customer base is wholly dependent on the L train. It’s very significant. All of this is to simply say that the Canarsie line, the L train, is the lifeblood for small businesses, without question.

What do small businesses hope for, in terms of transit alternatives?
The top four alternatives people were requesting are buses along the L train route, which is a no-brainer. One thing that jumped out, which we were very surprised about, was ferry service directly from the existing North 6th stop in Williamsburg to 14th Street, in Manhattan—as opposed to right now, where you have a ferry route running north and south, concluding on Wall Street. People really just want that quick ride, that back-and-forth shuttle service in a ferry format. They’re warming up to the ferry, which shows that this administration is taking the right path, and that this alternative means of transportation are really critical.

Then there are entrances on those subway lines that need to be opened up. These are all over the system, but these particular lines aren’t designed in full capacity, so they shut them down for whatever reason and they’re in a state of disrepair. Just making the investments to reopen these entrances, which continue to be an issue as the train is closed. They’re also calling for more subway cars on the J, M, Z, and G trains. The G train is an abbreviated train, and it’s long overdue that we finally bring it up to full capacity. And I think if there was a moment to do this, and see how it goes, this is the time to do it.

Are there any economic measures that the city or state can take to help stave off the impact the shutdown may have?
If you look at the Second Avenue Subway or after Superstorm Sandy, and what businesses just frankly expect, there will be loss of income. It’s necessary—it’s for greater public good. So how do we mitigate this? In 2008, there were bills for an economic relief program for small businesses that are hit by closures of lines like this. I think [the bills] are really sound. The proposed legislation had some really outstanding concepts in it, which included a bill for grants that might be available should businesses be able to provide evidence that they’ve seen significant or drastic cuts in their income. [The bill passed the New York State Assembly and Senate, but was vetoed by the Governor then]. Also, a sales-tax-free zone that might be surrounding these businesses. We’ve all heard of sales tax holidays, like Christmas, Thanksgiving, or Black Friday; it all rolls into one nice experience, because you’re getting a discount. All of a sudden, you’re creating lines of incentives for these businesses. It just recognizes that there will be a loss of income anyway, so seeing these businesses succeed is better, and it’ll probably outweigh the loss in tax revenue in the long term.

Then there was another bill for a property tax abatement for owners that temporarily negotiate during these periods of time. [That bill passed the State Assembly, but not the Senate.] You look at what’s happening as a public action that’s temporarily reducing the value of property, so why not, at least, consider ways to work hand in hand with landlords? And say, ‘Okay, we get it: long-term, you’re making a great investment, you’re probably improving all of our property value. But in the short term, our tenants, they’re going to be hit.’ So why not say, ‘Landlords, if you can provide some evidence of rent relief for small businesses that will be hit by this, you can also see some sort of value in your property tax bill’? It’s aligning the interests of the moms-and-pops and the real estate community, who want to see businesses succeed, but also need to make these critical decisions.

So what needs to happen for these bills to get passed?
What we need to do is really work with the Senate to really move that one bill along, and see their concerns… I think moving this back onto the front burner is critical for all of us, and it makes good state fiscal sense to say, ‘Let’s hit a short-term hit on taxes and income, to ensure the economic vitality of these neighborhoods.’ I think if you did the cost-benefit analysis, whatever benefits you could confer on these businesses easily outweigh the [lack of] sales tax you’ll be collecting on businesses that closed, or the [lack of] income taxes on employees not getting paid. It just makes sense.

You mentioned before that 40 percent of businesses say they expect 50 percent of their business will go down. Have you heard of any efforts that businesses are making to adapt?
We haven’t heard of a business doing an L train mitigation plan… But in terms of them doing anything in particular, I’m sure there are some who are stashing cash away, and foregoing investments. We also know that there are a few real estate projects that are probably delaying maybe a year or two, before they hit the ground. That’s not particular to small business, but it is relevant because you think, ‘What is the loss of revenue in foot traffic that would’ve been gained from a new apartment building, or a new commercial space?’ So delayed investment from real estate, and also, I’m sure there a few people who said, ‘We were going to renovate our kitchen, but we had to keep the cash in hand, in case this is as bad as it could be.’

But I think that part of the conversation should be, ‘Well, how do we also incentivize innovation?’ How do you say, ‘Your investment that you may have made in your kitchen, maybe you’re making it into a mobile service, or you’re developing an app, or you’re doing a marketing campaign related to the shutdown’? Things like that—that could be really instrumental in encouraging businesses to improve themselves to adapt themselves to this issue—would be well worth a good policy on the state’s part.

So knowing these challenges, what are the Chamber and business community’s next steps as the shutdown approaches?
We’ve been reaching out to Community Board 1, to draw support and get feedback. We’ve been working to secure funding to hire more of an advocate on the local level, to deal with helping businesses adapt. I’d consider them an ombudsperson; someone that is really there simply to say that they’ve heard this complaint, or issue, or something that’s happening that the MTA or organizations like ours aren’t necessarily seeing, but can be responsive. They’d act as a nexus for people and the agencies, which would require the city’s DOT, the MTA, CitiBike, and East River Ferry to all coordinate.

Really getting into the weeds and working with the community to find out the best solutions that make sense, that businesses and residents alike are looking for—those are sort of the big next steps. I’d really like to see resources just set aside from the state to focus on a major marketing campaign for groups like ours, who would be able to give people their FAQs. Like, how do you get to Williamsburg with the L train down? And then be able to spotlight and advertise businesses that are open [like the MTA’s “Shop Second Avenue” campaign]. When one may start to struggle and say, ‘Hey, I’m seeing a hit,’ well let’s do a big marketing campaign and be able to advertise them.

I think, from our point of view, we need to have this all set in place before the L train closure happens. We continue to work with the MTA to follow up on what we’ve really been asking for, which is an L train above ground. I don’t think anyone expects them to perfectly replicate the service and reliability of the L train while it’s down. But I think the MTA is doing an OK job, and their effort is commendable so far.