In April, 2011, the Wall Street Journal quoted RIOC board member Jonathan Kalkin. “This has really been the big thing on this island that’s never worked. We’re excited to finally take this albatross off our neck, and let this place thrive,” he said. He was talking about handing over responsibility for Main Street retail to Hudson-Related’s Shops-On-Main, an initiative he championed.
By David Stone
Shock and Awe? Hudson-Related’s Shops-On-Main
In the same article, Hudson president David Kramer said, “We’re gonna do shock and awe.” Using an inappropriate military term may have signaled a broader disconnect with the community.
As this 30-year pact with RIOC nears its tenth anniversary, how’s all that worked out? Was it worth the backroom conniving that led to firing RIOC president/CEO Steve Shane, just to get this deal? And what about the tradeoff that enriched a small group of Roosevelt Islanders, some of them board members voting in favor of the project?
Many feel that, in an ethical environment, those board members would abstain. In the end, it was a rare exercise of spine by a board that’s let much worse drift by without challenge since. But who won?
To be sure, Main Street retail was far from thriving at the time, but go back ten years and you had a virtual full house in the canyon. There was a bakery, a thrift shop, a stationery store, a small bar and an Italian restaurant, plus what Hudson-Related inherited.
A unique experiment
But that was a false front because only RIOC’s backdoor subsidies made it possible. From Day One, the state recognized that Roosevelt Island’s population wasn’t enough for a thriving Main Street. 20,000 was the original magic number, more than double what was then in play. However, there’s no reason to believe that was anything more than a guess.
Roosevelt Island was a genuinely unique experiment. Like a tram built for commuters, no one ever tried it before.
And each year, until battling a budget crunch under Gov. Mario Cuomo, Albany sent helpful cash straight down the river.
But by the time Hudson-Related’s Shops-On-Main got underway, that subsidy dwindled to nothing, although the population was not and never would be anywhere near 20,000. Lacking local political clout, Roosevelt Island was easy pickings for budget cutters.
The idealism that created the community was long gone.
Many of the businesses lingered far behind on rent while RIOC looked the other way. Reality insisted there was no better method for avoiding the hollowing out of multiple Main Street storefronts.
But how long could that go on?
Shane favored retaining RIOC’s management and paid the price for opposing Kalkin and Hudson-Related. RIOC’s board fired him without notice and, then as now, hid behind policy when asked to explain. This was a personnel matter, they said, and case closed. Lights out.
Over time, the truth dribbled as well-informed gossip. Shane’s firing was part of a deal where Kalkin got what he wanted and other board members collected windfall profits while privatizing Rivercross.
Shane opposed both, as constituted, and they got him out of the way.
Off to a rough start for Hudson-Related’s Shops-On-Main
As a reporter, I got into the game of covering Hudson-Related’s Shops-On-Main a little late. The project, which was going well enough that a bumbling start could still be covered up with positive rhetoric.
“We want to uphold a high standard for all the Main Street stores,” Kramer said at the time, “and we are comfortable with the market value of the leases based on our activity to date.
“Hudson-Related has been very active with the Main Street retail makeover since our designation last year,” he continued. “We’ve executed 7 leases and have pending negotiations with another 4-5 prospective tenants.”
His statements set a theme repeated many times over the next decade, but as we’ve reported before, the flowery claims never blossomed.
Public rhetoric meets private reality…
My first exposure came when I was asked to look into the imminent eviction of Roosevelt Island’s hardware store.
In this instance, Kramer’s private rhetoric changed….
“Please take further notice that unless you remove from the Premises on or before November 30, 2012, the day on which your term expires, that being more than thirty days from the date of service of this notice upon you, Landlord shall commence summary proceedings to remove you,” reads the notice Kyung Lee, a South Korean immigrant and president of Liberty of Roosevelt Island, got on October 25th. 2013.
It was signed by Kramer.
And part of his rationale, he told me, was that Liberty wasn’t competent. They had not, for example, signed a single contract for supplies with any of the management companies.
While the hardware store paid RIOC $3,400 in monthly rent, Hudson-Related demanded $7,420. Plus real estate taxes.
Hudson-Related followed through on its eviction threat, and Roosevelt Island’s been without a hardware store or any other business in that location, ever since.
Not an unfamiliar story…
Because Hudson-Related’s Shops-On-Main sports other similar stories, Kramer’s oft-repeated claims of success roil some residents. Not only was the hardware store lost but so was a popular thrift shop run by the local parish and a longstanding stationery store.
New additions, such as Wholesome Factory and PubCulture, are clear successes, but on balance, the result, after a decade, is at best a trade off. And some populations, especially lower income families, feel deprived of access to affordable goods.
And larger businesses failed, too. Urgent Care, for example, bugged out abruptly in 2018, and in the same year, Riverwalk Bar & Grill shuttered after nine years.
A problem with credibility…
Problems appear two-fold with one leading into another. As of a year ago, Hudson-Related still peddled a false claim of 14,000 residents on Roosevelt Island. But as Kramer knows, there are really more than 20% fewer of us than that, and businesses open anticipating traffic that never arrives.
“I did not know that the hardware store and nail salon are the only stores open on our side of Main Street for seven years. Bakery store, pizza store, fish market and flower shop are all closed down, one by one.”
That’s what Kyung Lee, Liberty Hardware’s owner, told me as eviction loomed. Street traffic promised, first by RIOC, then by Hudson-Related’s Shops-On-Main, never materialized.
“All the other stores have gone. I stayed,” she said.
Then, they kicked her out.
Instead of inflated rent, Hudson-Related now gets nothing, and Main Street, along the canyon, remains one empty storefront after another.
Conclusion: Hudson-Related’s Shops-On-Main 2020
After ten years, it’s hard to argue that Hudson-Related’s Shops-On-Main works, over all, although there are successes. Granny Annies has been an immediate success, and existing businesses attest to Hudson-Related’s supportive management.
But that has not improved the vacancy rate, in spite of wild claims of near full occupancy by Kramer.
And moreover, the landlord with twenty-years to go on its deal seems bereft of ideas, relying instead on repetitious pledges of openings ahead…. Onda Mexican, Eleanor’s Paninis, Mia Familia and others nameless like the promised new tenant allegedly signed for the old stationery store in 2019…. The yoga studio… the list goes on.
However well-intended, RIOC’s board blundered in negotiating a contract for Hudson-Related’s Shops-On-Main in 2011. The failure’s clear to any objective eye, but what’s not clear is any commitment to doing anything about it.
Neither RIOC’s unimaginably passive board nor the bumbling real estate giant seem anywhere near as dissatisfied as the people who live with their failure, now ten years running.
Categories: Roosevelt Island News