What’s The Deal With Small Business in Brooklyn Heights Lately?

It’s been a tumultuous few months for businesses in Brooklyn Heights. Brooklyn Heights Cinema, Crumbs, Taperia, Connecticut Muffin, and Siggy’s have all closed or announced closures recently. Meanwhile, a handful of new businesses have begun to inhabit the area: there’s the new Clean Bedroom showroom, Gramercy Park restaurant Friend of a Farmer is busy setting up its second location in the long-vacant antique anchor space down the street, and reliable sources tell us a new commercial tenant has been found for the similarly dormant space vacated by Montague Jewelers near Court Street.

The rapid turnover hasn’t really surprised longtime local business owners, many of who noticed years ago that their ranks were thinning and being replaced with chain retail and higher-end stores. “There’s not many small stores left,” said Sam El Romi, owner of Pet Emporium on Montague Street. “You see a lot of bigger stores. Is it for the better?”

Some BHB readers seem to agree with El Romi’s sentiments, pointing fingers at nearby chain eatery Le Pain Quotidien as one of the reasons behind Connecticut Muffin’s demise in particular.


To be fair, as far as we know, the businesses that have closed recently have done so for a variety of reasons unique to their particular situations. Some of them also weren’t exactly local in the strict sense of the word: Crumbs and Connecticut Muffin were both chain stores. Siggy’s, while hardly a chain, does have another location in Manhattan.

But Siggy’s, Connecticut Muffin, and Heights Cinema were neighborhood fixtures for many years. And their recent closures in quick succession can’t help but bring to mind the spate of recession-era shutterings in Brooklyn Heights that occurred years ago, when retail vacancies topped out at 6 percent in 2008.

Things don’t appear to be quite as dire today. Anecdotal evidence suggests some local shops are doing well: this BHB reporter enjoyed a delicious dinner at a packed Sociale on a recent early Saturday evening; the local wine shops on Clark and Montague seem to do steady business; and the yoga classes at Area Yoga and Yoga People seem consistently well-attended.


But there is a sense among longtime local proprietors that owning your own building is the only guaranteed way to stay in business, and that the retail churn observed lately will continue, thanks mainly to commercial landlords looking to cash-in on Brooklyn’s continuing development boom.

“There’s definitely more chains nowadays because they can pay the rent,” said Thomas Calfa, owner of Lassen and Hennings, who also owns his the building where his 76-year-old store is located.

It seems reasonable that commercial rent increases could be a major cause of the recent closures and long-vacant storefronts in Brooklyn Heights. But data indicates that overall rents in the neighborhood have been largely stable for a few years now. On Montague Street, they averaged between $100 to $149 dollars per square foot as of May 2014, according to the latest survey CPEX Real Estate Services, about the same as three years ago.

However, that’s much higher than the average commercial rental rate for the entire borough, $37.15 per square foot as of the fourth quarter of 2014, according Newark Grubb Knight Frank, another commercial real estate advisory firm.

“People talk about evil landlords, but it’s not that simple,” said Robert Hebron IV, associate broker at Ingram and Hebron, a realtor that rents commercial space in Brooklyn Heights, including the former Montague Jewelers spot. He added that critics should try and put themselves in the commercial landlords’ shoes. “If you or I own a business, of course we’re going to want to maximize our asset.”


Another factor to consider is property taxes. As the city’s Department of Small Businesses helpfully notes: “Most commercial tenants are required to pay a share of the property tax due on the building.” While tax rates have remained fairly stable in recent years, the effective tax rate for commercial property owners has generally been much higher than that for homeowners. That’s because New York City divides property into four classes and assesses them at different rates, with homeowners paying taxes on a maximum of 6 percent of the market value of their property, and all other property owners paying taxes on as high as 45 percent of their property value.

There could be additional pressures as well. Calfa, for one, believes as more of the borough has developed and gentrified, fewer residents from across Brooklyn are coming to Brooklyn Heights for their dining, shopping needs, or recreational needs.

Still, some small business owners believe there will always be a place for them in the Heights. “There will always be a mix of businesses here,” said Juan Rivera, owner of the Variety Mart hardware store on Montague Street and the building above. “But it’s true you don’t see a lot of new small businesses wanting to open. In the last 10 to 15 years, the mixture has gone toward chains and away from mom and pop.”


As for the new businesses moving in, life isn’t exactly easy for them either. Take the new Clean Bedroom store at 145 Montague St, which opened last fall before Thanksgiving, offering sustainably-made mattresses and bedroom furnishings at premium prices. The latest in a small, family-owned chain with other six stores across New England, the new Clean Bedroom was empty when BHB visited earlier this week.

“Business started off pretty slow,” said Stephen Bickos, a sales associate at Clean Bedroom. “It’s starting to pick up now. We’re seeing an influx of customers.” Bickos said he believed that people may have been busy doing holiday shopping for gadgets and other mass market gifts around the time of his employer’s opening. “I think we’re a good fit for the neighborhood,” he added.

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  • Nate

    Ummm, isn’t Connecticut Muffin a chain?

  • miriamcb

    Yep – Carl notes that in the write-up.

  • Mark on Middagh

    NYC in general is no longer small business friendly. Even when you are fortunate enough to own your own building, the expense of doing business in NYC is overwhelming.

  • Hickster

    I’d like to point out Home Stories, also on Montague. It’s such a lovely store.

  • Beth

    The former Starbucks and the empty upstairs space has remained empty for over a year or more. Any word on what’s going on in there?

  • http://www.youtube.com/watch?v=UlsiLOnWCoI Arch Stanton

    The landlord is a flaming A-hole of epic proportions. Who would want to enter into a lease with someone like that.

  • MONTague

    Good riddance CT Muffin. Hopefully Lassing will join them. Suggy’s leaving is a travesty but I have a feeling it’s nire than just higher rent…

  • Roberto Gautier

    Meditation: “If you or I own a business, of course we’re going to want to maximize our asset.” Take a look at John Elkington’s “Cannibals with Forks.” It discusses the triple bottom line concept which goes beyond just maximizing profits and squeezing employees. The idea includes the community’s well-being as part of a business plan.

  • Philip Galindo

    Just another sign of the booming upturn in the national economy. Look for more closures and job losses as indicators that the powers that be are hugely successful in their endeavors to help the middle class.

  • ShinyNewHandle

    Ha! I don’t know who the landlord is, but you have to be right. Why otherwise would Starbucks—who seemed content to keep their two Court St. locations, and even expanded the smaller one of them—be so alienated that they would pick up from this address and move—one block down the street!

  • ujh

    Small businesses began to leave Montague Street decades ago. The exodus was led by a bookstore at 162 Montague where the rent was increased to then unheard-of $10,000/annum. The store moved to Court Street in Cobble Hill and has operated as the seemingly successful Bookcourt. Its former Montague Street space was taken over by the Japanese restaurant Nanatori.

  • miriamcb

    I thought, and someone correct me if I’m wrong, that there were some building issues (besides the landlord). I seem to remember leaking being a problem in that building and that was part of the impetus of the Sbux move down the street.

  • Kenn Lowy

    My understanding is that he’s asking $40,000 a month rent for that space. So it will probably be empty for a long time.

  • ShinyNewHandle

    For the rent Sbux was presumably paying, he couldn’t have fixed the leak? This boggles my mind.

  • Kenn Lowy

    You neglected to mention Module-R and Moxie on Atlantic. And Andy’s on Montague. All, as far as I know, rent issues. I would bet there will be a few more closings in the next 6 months. As Mark wrote: “NYC in general is no longer small business friendly.” It’s just become a huge gamble and the deck is stacked against you.

  • Remsen Street Dweller

    But is there a tax benefit to leaving a space empty? It seems like there must be because so many spaces all over the city stay empty waiting for the “big” catch rather than being rented out sooner for less money.

  • Kenn Lowy

    I asked about that because I thought the same thing. I was told there is no tax break.

  • http://www.youtube.com/watch?v=UlsiLOnWCoI Arch Stanton

    That’s correct. The roof was leaking and the A-Hole refused to fix it despite it being his responsibility and collecting over $20k a month in rent. So kudos to Starbucks who simply left when their lease was up.

  • http://www.youtube.com/watch?v=UlsiLOnWCoI Arch Stanton

    There is, it can be written off as a loss.

  • Remsen Street Dweller

    Can you explain how this write-off works? Because this sounds like one tax law write-off that needs modification.

  • no-permits

    but that’s not a tax break or a loophole. you’re still losing money in the end. it just takes a while to fill commercial spaces.

  • http://www.youtube.com/watch?v=UlsiLOnWCoI Arch Stanton

    There are many ways loss write-offs are used but basically, If a business has a loss it doesn’t have to pay taxes on the amount of the loss, which can add up to significant tax savings.

  • http://www.youtube.com/watch?v=UlsiLOnWCoI Arch Stanton

    Correct, Not a loophole at all, it’s the cornerstone of business accounting. Not making money=losing money so that loss can be subtracted from the money being made.

  • no-permits

    say a storefront would rent for $1,000 a month and it’s empty for a year. you don’t deduct that $12,000 as a loss. it’s just $12,000 less that you are not taxed on because you didn’t receive rent. leaving a place empty is never a tax strategy for a landlord. you only subtract actual incurred expenses: water, sewer, taxes, insurance, maintenance, advertising, etc. it’s annoying listening to some people constantly saying landlords get “tax breaks” over and over when it’s not the case.

  • no-permits

    calling it a significant tax savings is misleading and incorrect. it’s still a loss of revenue and therefore not a savings. there is no benefit to a landlord leaving a space empty.

  • http://www.youtube.com/watch?v=UlsiLOnWCoI Arch Stanton

    You obviously don’t have a very good accountant.

  • no-permits

    it never makes financial sense to leave a place empty. you’d be better off throwing that money into improvements if you’re looking to offset the income.

  • http://www.youtube.com/watch?v=UlsiLOnWCoI Arch Stanton

    If you are just an individual property owner the limit to the vacancy loss write-off is $25k a year off your personal taxes. but if the property is owned by a corporation that invested in said property its a whole different game, the claimed losses can be much higher. Of course it ultimately is much more profitable to have the space rented. You can only save the tax on the income you would have made on the unrented space, say 20% but when you are talking about hundreds of thousands of dollars it can add up to a significant amount and lessen the urgency to rent the space.

  • no-permits

    there’s no such thing as a “vacancy loss” that you are referring to.

  • http://www.youtube.com/watch?v=UlsiLOnWCoI Arch Stanton

    It may not be called exactly that but there is a deduction for it.