Can a great MTA idea be repeated, giving RIOC a clear path for saving Roosevelt Island’s Main Street? It’s complicated, but possible.
By David Stone
The Great MTA Idea
Much like RIOC, the Metropolitan Transit Authority gave retail tenants a break, allowing delayed rent payments, as COVID-19 settled in. But now, the MTA’s taken it further.
“None of that back rent is owed under the new agreement. But beginning retroactively from August, storefront owners will be able to offer 10% of their gross sales or 10% of the original rent — whichever is higher — as annual rent payments.”
That’s according to an article in The Gothamist.
That’s a huge step for an agency swimming through a $12 billion budget deficit.
And while RIOC’s condition, on a much smaller scale, is similar, there are major differences.
Stores don’t work directly with RIOC…
Possibly the biggest obstacle facing any push at implementing the MTA’s great idea here is RIOC’s deal with Hudson-Related. Most businesses pay rent to Hudson-Related, and a few in pay Westview’s management group.
So, any direct deal must follow a crooked path. But that’s less challenging because of Hudson-Related’s positive working relationship with tenants.
As recently as last month, Main Street Theatre and Dance Alliance joined others, praising Hudson-Related’s management team.
So, if the state is anywhere near as generous as the MTA’s great idea, the skids are greased for a deal.
But RIOC’s got troubles of its own.
Why Main Street needs something like the great MTA idea…
When RIOC offered a temporary grace period, worked out with Hudson-Related, Main Street businesses sprang back to life.
Signs of struggle mark Main Street from Riverwalk Commons to Motorgate.
PupCulture’s sidewalk window is again alive with happy dogs, but there are fewer. Apartment vacancies and more stay at home work causes reduced need.
Other storefronts tell similar stories, and with cool weather setting in, restaurants rely on restricted indoor tables. None of that will change until a vaccine makes rubbing elbows with neighbors an afterthought again.
Nonprofits may have it worse, with public exposure limited or completely blocked.
We don’t know how many Main Street operations took up RIOC’s offer for delayed rents, although it’s a fair guess that most did. But a delay is just that, and the rents are only on hold, not cancelled.
Rent’s the biggest expense for some and a major obligation for others. Without revenue, it’s hard to imagine how Main Street shops can pay at 100%, let alone make up for months already passed.
The great MTA idea and RIOC’s dilemma…
Last time it was publicly revealed in September at a board meeting, RIOC looked at a $2.5 million revenue shortfall for the current fiscal year. That ends in March.
But that took into account only unexpected losses from reduced Tram ridership. It left in place roughly $1, 655,000 in retail rents and bumped it up to $1,701,000 next year.
While those weren’t the most fanciful numbers in the budget, they reflect a fiscal picture distorting reality.
RIOC will have to come to terms with sharply decreased revenue caused by forces out of their control. With their great idea, the MTA has done something remarkable for businesses, even as their own situation worsens.
“This is a net positive for the MTA. Our rent collections for a couple recent months were below 50%. So we were starting to lose revenue and tenants, and replacing a tenant costs a lot of money,” said Janno Lieber, the MTA’s Chief Development Officer.
The great MTA idea may work for Roosevelt Island too, although circumstances are different.
On the other hand, who’s got a better one for saving Main Street retail?
Categories: Roosevelt Island News