New Money In Flatbush: Is All That Glitter Golden?

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New King of the block?

[Brooklyn: Business And Development]

While some people welcome the new reinvestment in the Flatbush area many locals complain that it's led to the closure of small businesses and opened the way for large chain stores to take over, furthering economic inequality in the neighborhood.

Flatbush Avenue, a major business district catering to thousands of residents every day, like much of Brooklyn, has been the focus of major investment over the last few years.

Much of this new money coming in is going into the rebuilding of large operations such as the Loew’s Kings Theatre, which is expected to reopen in 2015.

After closing in 1977, Kings Theatre, which many consider a Brooklyn Landmark, spent more than four decades with its door closed. Once one of the biggest one-screen cinemas of the period, Kings Theatre was forced to close due to competition from new multiplexes and other economic factors.

In 2008, the New York City Economic Development Corporation launched a campaign to find a new entity to restore the theater, with the goal of transforming the unused facility into an economic machine and cultural hub for the neighborhood.

“The reopening of the Kings Theatre will create a new cultural and civic cornerstone for the local community, through the restoration of one of the neighborhood's most treasured architectural gems,” says Charley Magrew, Director of Marketing of the Lowe’s Kings Theatre.

A partnership comprised of ACE Theatrical Group, Goldman Sachs Urban Investment Group, United Fund Advisors, and National Development Council was formed in 2013 to oversee the redevelopment of the theater.

The hope of the partnership is to bring in more money to the Flatbush sector, through the creating of numerous full time and part time jobs, and to ensure that Kings Theatre is the venue of over 200 shows annually. “We believe the Kings Theatre, along with the continued investment in the community it spurs, will be an asset for everyone here,” adds Magrew.

However, the reality of the Flatbush situation only goes to show that large investments like this lead to the opposite of economic revitalization, critics contend. “The rebuilding of Brooklyn with BAM, Atlantic Mall and Barclays Center has caused a lot of closures,” says Edgar Henry, previous president of the Flatbush Business Improvement District.

Henry who is a small business owner himself feels the pressure of the new money coming in. “Landlords are greedy, the rent is increasing in this neighborhood, forcing people to move out, leading to the influx of people coming from Manhattan with more money,” he says.

Henry's business, an eyeglass store called E.N.G. Caribbean Vision Center, is set to go out of business in the next couple of weeks; and his is not the only casualty. Walking down Flatbush Avenue over the last few months, an observer could see the increasing number of stores that have closed or were on their way to closing.

“Over the last five years rent has increased by 15 percent every year,” complains Jamón Martin, owner of a small hair salon. “It’s good that more jobs will be created, the neighborhood will be cleaned up and more money will go around,” Martin adds.

Yet, some amall business owners feel pushed out by the new comers, who, they say, will cater to the new arrivals who are buying up houses; not to the people who have lived in the neighborhood for many years.

“The new theater attracts new business. GAP replaced the footlocker on the corner. This could be like the new forty-second street,” Henry observes, referring to the high-traffic Manhattan strip bustling with businesses.

Some analyst of the trend caution that the new jobs being created do not necessarily help the neighborhood. “Chain stores keep costs down, pay low wages and have brand name recognition. What we have is middle class business owners being slowly replaced by low-income workers and this only increases inequality,” says Alex Vitale, professor of Sociology at Brooklyn College. “Raise rates are lower than inflation, this is only furthering the problem,” he says.

Professor Vitale maintains the city has to raise wages in order to prevent low-income families from being pushed out.

Is it a case of too little too late?

“People are moving to the suburbs, like Long Island, where there’s no work and even less money,” Martin, the salon owner, says.

Henry, whose Vision Center is about to shutter believes others can still protect their turf.  “People have to go out and vote," he says. "They have to sit on Community Boards, so others don’t come take over. Community councils collectively with the Business Improvement District have a voice and can control the situation.”

“The city is taking steps to have a higher minimum wage for contract and city workers and if the State Senate goes Democrat wages can be raised. The city could also move subsidies away from Wall Street to more middle class owned businesses,” he adds.

Another way that the city can help the situation is by adding more housing, which will decrease demand and lower residential rent. However, given the fact that the last two years most of the housing built has been luxury housing, the city government needs to take make more of this housing affordable. “Affordable housing is important. But the federal government has pulled out of the plan leaving the city and state governments to pay the bill and they are simply not able to,” says professor Vitale.

Investing in the Flatbush area will bring winners and losers. Only time will tell if the Loew’s Kings Theatre and other large business will really have an overall positive impact or if the neighborhood will be the new forty-second street, with the demise of small independent businesses.

 

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