In Jackson Heights, empty real estate draws ire

As the economy improves, the retail spaces at 74th St./Roosevelt Ave. in Jackson Heights should fill up.

Updated (4:10 p.m.): The MTA’s vast real estate holdings make for easy political fodder. Politicians do not want the authority to raise fares or cut costs until every single cent has been squeezed out of the MTA’s air rights, commercial retail space and office buildings. On the one hand, when it comes to deals such as the highly problematic Vanderbilt Yards sales, politicians are right to cast a wary eye on the authority’s deal-makings, but sometimes, the MTA’s vacant commercial real estate holdings face criticisms out of touch with the economic times. This is not one of these cases.

On Friday, NY1’s John Mancini produced a piece on Jackson Heights’ recently renovated 74th St./Roosevelt Ave. hub. The station underwent a five-year, $132-million rehab earlier this decade, and it was supposed to be home to a series of retail establishments as other subterranean hubs are. The MTA, though, has had trouble filling three of the 14 spaces, and politicians are unhappy.

“This is a shining example of MTA incompetence,” Queens Councilman Daniel Dromm said while standing in front of two vacant, street-level spaces. “They promised me that this store right here behind me would be open by September as a pizza parlor. As you can see, they’ve had a lot of success.”

At first blush, it seems as though Dromm is needlessly picking on an authority doomed by bad timing. After all, commercial retail vacancies are up across the city, and the MTA can’t do much to fill spaces. But after a few discussions with sources close to both Dromm and the retail space, this does indeed sound as though the MTA dropped the ball.

First, take not of a Times article on the situation. Fernanda Santos explains some of the details:

The transportation authority first requested proposals for the space on Roosevelt Avenue in 2006 and got back a single response, from a Korean businessman who wanted to open a bakery, agency officials said. The businessman signed a 10-year lease in 2007, paid a $40,000 deposit and then an additional $75,000 in 2008, when he told the agency that he needed more time because of problems with the architect he had hired for the project.

The second space — a triangular store of about 200 square feet — cannot accommodate a ventilation system because of its odd configuration, making it impossible to house a pizza parlor that someone had intended to open there, the officials said.

No lease has ever been signed for the smaller space, and the lease for the larger one was not voided until September 2008, almost two years after it was signed. Though the Korean businessman forfeited his deposits, he never paid any rent on the space.

“That’s the ultimate absurdity of this whole deal,” Mr. Dromm said. Mr. Dromm is particularly troubled by the impression that the shuttered stores might leave on visitors. The subway station is a gateway to the neighborhood and “it’s not a good thing if the first thing you see is boarded-up commercial space,” he said.

The backstory grows deeper though. When the MTA rebuilt the Roosevelt Ave. hub, they turned the biggest space — the still-empty storefront — into a two-level store but did not install the ADA-required elevator. Instead, the terms of the lease they are trying to negotiate with businesses requires that the leaseholder install the necessary elevator at a cost. Because elevators are expensive, locals anticipate that this will add at least $500,000 to the cost of opening a business. The space too currently is just a shell with no floor subdividing the levels.

Dromm has suggested a variety of solutions for the MTA. He has asked them to subdivide the space and use the lower level for storage while renting out the top. He’s asked them to turn it over to the city so that he can use Council funds to attract a non-profit. He’s even requested temporary bike parking spaces to fill the vacancy.

In essence, this empty storefront has created what neighborhood activities are terming “blight” in front of the focal point of Jackson Heights. The subway stop is among the most active in Queens, and people see bordered-up windows as they go to work in the morning and come home at night. It needs to be a magnet for people and small business, but right now, it’s a sore spot on the very visible face of an up-and-community community.

Meanwhile, although The Times says that the MTA has untangled itself from the bakery lease, sources close to Dromm tell me that won’t speed up the process. As of July, the two sides were still haggling over the lease, and once the MTA is free of that commitment, it must again prepare an RFP and hold it open for six months. The authority seems to believe this will prevent them from picking a tentant for at least nine months, and it could be another two or three years before the space is filled. The station rehab wrapped years ago.

The authority’s real estate department is working on new approaches. “Expectations are that it’s not high-quality retail. And by high quality, I don’t mean expensive, I just mean interesting, good design,” MTA Director of Real Estate Jeff Rosen said to NY1. “The kind of place you’d want to stop and pick up something for convenience, but also for fun.”

That it remains empty highlights the tensions between community needs and MTA planners. This time, it seems, the authority had unrealistic assumptions and did not work closely enough with Jackson Heights leaders to make it work. The resolution too is still a few years away.