Flushing Shopowners Under Pressure

Story, video and photos by Kevin Young

Ikhwan Rim, 43, a third-generation jeweler, converses in his native Korean with his customer of over 20 years who asks to use the business phone to make a call while Rim’s father cuts diamonds in the backroom.

The Rims’ store is one of several family-run businesses that line Union Street , a lively thoroughfare of commerce in downtown Flushing. Nearly 100 businesses occupy Union Street, including an acupuncturist, a clothing boutique, a bakery and many more businesses that have been there for over 20 years.

These businesses have long served the neighborhood’s residents, a mix of Chinese, Korean, and Hispanic immigrants. But some owners, including Rim, are concerned that a boom in new development is threatening their ability to keep their stores afloat. They say commerce is down because customers have trouble finding parking, a temporary loss to new construction and because rent costs are soaring.

“Businesses around here don’t own the buildings, they pay rent.  Mom-and-pop stores can’t handle the rent, so they move out,” said Rim, who is president of the Union Street Business Association, an alliance of small businesses on Union Street, a block away from the area’s newest development, Flushing Commons.

During the last few years, development projects, such as Queens Crossing, have created offices for medical services, luxurious restaurants and shops at the SkyView Center. These developments have gradually pushed older, smaller businesses out, while attracting national retailers such as Target, Best Buy and Nike.

Downtown Flushing will absorb the Flushing Commons, an $850 million project towering over five acres, adjacent to Union Street.  It will result in 600 new luxurious residential units, 500,000 square feet of commercial space and a 62,000 square-foot YMCA facility, according to a news release from the New York City Economic Development Corporation.  This project is expected to create 1,900 permanent jobs for professional services that move in, as well as potential national retailers, the city said.

The Flushing Commons will be built on Municipal Parking Lot 1, creating an underground parking lot with 1,600 spaces, up from 1,100, with the first phase to be completed by 2017. The entire project is slated for mid-2021, the city said.

The Flushing Commons

The Flushing Commons, an $850 million project, will be completed by 2021.
The Flushing Commons, an $850 million project, will be completed by 2021.

Flushing has always been a dynamic neighborhood, offering diverse cuisines from Asia, one of New York City’s largest public libraries, a multitude of bus routes and access to Manhattan on the No. 7 train.  The NYC Census Fact Finder found that over 65.2 percent of rent payers designate more than $999 per month for rent.  A 2013 Report from the advocacy organization One Flushing said 80 percent of businesses in Flushing employ 10 or fewer workers.

Although rents continue to rise, some merchants will persevere. “If the price is really that unreasonable, then the market will eventually solve the problem. People will stop renting at that price and the price will drop,” said Yuli Tsai, 33, a Flushing real estate broker with Century Homes Realty Group LLC. “In the Flushing area, most of the businesses that are surviving and making profit are restaurants.”

Flushing is known as the one-stop center where one could see an accountant, get a haircut, shop for groceries or clothing and dine at an ethnic local restaurant all in one visit.  Businesses, although vastly different, complemented each other. Rim claims that many of his complementary businesses like a travel agency and lawyer have moved out, while massage parlors that partake in illegal activities moved in.

Small Business Shares Lots to Sublet Rent Prices

Michael Meyer, the president of the F&T Group, the primary developer behind the Flushing Commons, also developed Queens Crossing and One Fulton Square – a project completed in 2015 that features an award-winning Hyatt Hotel and a parking garage to address the parking concerns of the Union Street businesses. Meyer knows there is short-term disruption but said the project could potentially aid small businesses in the long-run.

Small businesses share lots to split rent costs.

“Ultimately, it creates a huge amount of value in the area because it generates more visitation and more investment,” said Meyer, 60, in an interview.  “We have hundreds of construction workers that are down there who are using shops and eating.”

Rim does not agree this is a benefit to local businesses because he believes that these workers only support “Americanized” chains like McDonald’s and Subway – not the ethnic restaurants.

The NYEDC is aware that the projects are adversely affecting some local businesses and commissioned Asian Americans for Equality, a nonprofit organization, to distribute a $2.5 million care package to small merchants in 2013 to facilitate marketing, according to the NYCEDC.

Rim said businesses along Union Street were unaware of any initiatives taken by the AAFE to help small businesses.  Contacted for a comment, the AAFE has not responded.

Yi Yan, a 20-year-old college student who works at the Flushing Starbucks, misses the Flushing Mall’s food court, which offered many traditional and authentic Taiwanese food.  The mall on Prince Street closed in January 2015. It is now the site of another future F&T Group development.

Councilman Peter Koo, Democrat of Flushing, has been a vehement supporter of the development projects and, like Meyer, believes in the future prosperity to come as more wealthy foreign Chinese continue to invest in Flushing.  Yet Koo still provides support to the small businesses.

“When we have more construction here, it brings up the economy,” said Koo, 63, who owns the Starside Drugs pharmacy chain.  “After construction, more local people will get employment. With more people working, the city will get more money from tax revenue, so the city can provide more programs for our community.”  Koo said struggling small businesses should call his office if they require assistance.

John Choe, 45, a longtime community activist and executive director of the Flushing Chamber Of Commerce, an entrepreneur advocacy organization, said that government officials and the city can do more by conducting in-depth research and by taking into account that that every business has diverse needs.

“During the last recession, Flushing was one of the few neighborhoods that grew in terms of economic activity, job creation and tax creation for city government.  If we don’t pay enough attention to what’s going on and don’t address any challenges, then it’s going to not only be detrimental to individual businesses, but to the entire Flushing community, as well as the larger regional economy,” said Choe.