Home Second Avenue Subway Stores suffer while 2 Ave. residents earn a break

Stores suffer while 2 Ave. residents earn a break

by Benjamin Kabak

Displaced Second Ave. residents can leave all of their construction woes behind.

With construction continuing apace underneath Second Ave. and the MTA maintaining its intention to finish Phase 1 of the Second Ave. Subway by 2016, attention has turned to the impact construction has on both residents and businesses. For years, businesses have bemoaned the disruption as sidewalk space is lost, and the general disarray of a construction zone has taken over. The MTA has been unable to find money to help out businesses, and although the Upper East Side will enjoy extreme growth when the subway opens, for now, business owners are finding progress rough.

Those who live near the construction zone are suffering as well. Many of the buildings along Second Ave. date from the early 20th Century, and decades of less-than-perfect maintenance have left many unstable. Although landlords are ultimately responsible for shoring up their buildings and keeping them up to code, the MTA has decided that its cheaper to pay for the engineering work than it is to fight building owners in court and risk delaying the subway.

But now the story emerges: As the MTA works to reinforce these buildings, the residents of Second Ave. must relocate, and the MTA is going to pay handsomely for it. According to a report in The Times, the authority is set to dole out payments well above market rate to appease displaced residents. Here’s how Michael Grynbaum puts it:

Say the Metropolitan Transportation Authority has decided to eject you from your Upper East Side walk-up for a month, maybe two, to help make way for the Second Avenue subway. You will be offered a choice. Stay in a nearby hotel, free, or skip the hotel and accept a rent stipend from the authority. A stipend that pays $5,000 a month.

That sum is for renters who live in a studio. For those in one-bedrooms, the authority will offer $6,000 a month. A two-bedroom renter gets $9,000. The authority will also pay $40 per person, per day, for meals. Moving and furniture storage costs are covered too, along with rent and utilities for the apartment you are leaving. Maybe giving your home to the transportation authority would not be so bad after all.

According to a recent report, these figures are well above market rate. In non-doorman apartment buildings, an Upper East Side studio goes for approximately $1700; a one-bedroom for $2200; and a two-bedroom for $2800. It is no coincidence that MTA is an anagram for ATM.

It gets better, though. Those who choose to eschew the stipend can instead take up the MTA on its hotel offer. The stipend prices correspond to hotel rates for the Marmara Manhattan, a high-end residential hotel on 94th St. Those who don’t want the trouble of finding their own places can stay at the hotel courtesy of the MTA. The authority stresses that these seemingly exorbitant prices are well worth the cost of avoiding delays as residents litigate their ways through the construction morass. Despite the gaudy prices, I’m inclined to agree.

Still, Second Ave. business owners cannot be too happy with this news. As Crains New York detailed yesterday, businesses are sufferingly greatly along the avenue. Some stores are reporting revenues down by nearly 50 percent, and restaurants that rely on outdoor seating are finding less available sidewalk space, fewer people willing to dine al fresco inside a construction zone or both. A new website at 2ndAvenueShopper .com is the latest effort from the Second Ave. Business Association, but the shop owners are fighting a losing battle. “There’s a stigma with Second Avenue now,” Cafe Greco owner Frank Sofroniou said.

The dueling headlines this week show the troubles of construction. The MTA must pay to relocate residents and finds it economically expedient to do so even with stipends well above market rate, but the MTA is under to obligation to offer financial support for struggling businesses. When the subway is open in six years, the entire neighborhood will be revitalized, but for now, it must adjust to the trials and tribulations of a semi-permanent state of flux.

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rhywun June 22, 2010 - 1:31 am

When the subway is open in six years, the entire neighborhood will be revitalized, but for now, it must adjust to the trials and tribulations of a semi-permanent state of flux.

Setting aside for the moment the utter absurdity that it takes a decade (okay, eight decades) to build a three-stop stub… Now we’re asked to support the “suffering” renters along 2nd Av. at triple the market rate…? I don’t even know how to respond this level of waste any more. It just gets so much more and more absurd that one can’t even come up with a response to it any more, beyond throwing up one’s arms and saying Oh Well.

Benjamin Kabak June 22, 2010 - 8:27 am

You’re missing the point a bit. The numbers are extravagant, but it’s not waste. It would cost more to litigate this problem, and it would cost far more to suffer through construction delays than it does to simply pay to make the residents go away for a month or two. It’s the same equation lawyers try to balance when trying to decide whether to settle or go to court.

It looks bad when you look at market rents and the way the businesses haven’t gotten any monetary assistance, but it would be irresponsible to do it any other way right now.

rhywun June 22, 2010 - 10:30 pm

Admittedly, I didn’t catch the “one or two months only” bit, which makes the whole affair considerably more rational. I hereby retract my invective 🙂

Scott E June 22, 2010 - 9:03 am

Unfortunately (for the businesses), they are giving the residents a choice. Not only are the businesses becoming less accessible, but their local customers are free to relocate elsewhere in the city (maybe it’s just a handful of families, but for very localized businesses, it still hurts). If they moved them all into the hotel, then they would still be in the neighborhood; plus, there is a better chance that they’d return once the work is done.

Do they need to vacate all of their possessions (furniture, etc) from the apartments, or just themselves? If they need to empty out completely and move to an already-furnished place for a month or two, that could be another logistical headache.

Streetsblog New York City » Today’s Headlines June 22, 2010 - 11:32 am

[…] Second Ave Residents Paid Up to $9K a Month for Temporary Displacement (NYT, SAS) […]

Paulp June 22, 2010 - 2:22 pm

Excuse me, but isn’t the MTA wallowing in debt? Didn’t the same MTa layoff 200 workers and will layoff 600 bus drivers this Monday? Is this the same MTA who had to float new bonds for school Kids passes? What a joke I wonder how much money they’d give to residents in the Bronxor Harlem who had similar problems. $2.25 and happy meal.

John June 22, 2010 - 4:54 pm

Part of the reason why they are offering a $5,000 per month stipend is because, if it is only a few months, somebody may have trouble finding an apartment (would a landlord really be willing to rent out an apartment for a few months?)
At $5,000 per month, that is about $166 per day. That’s a pretty good deal for a hotel on the Upper East Side, even if it is residential.

Alon Levy June 23, 2010 - 5:24 am

Many agencies overcompensate to avoid litigation. The costs are trivial compared to the cost of the project, and it avoids bad press and potentially devastating lawsuits. For example, SNCF not only overcompensates owners by about 20-25% when building LGVs, but also makes sure to pay the extra sum separately as damages, to avoid creating a property tax-increasing impression of higher property values in the area.


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