Can Small Businesses Survive in Carroll Gardens?

When children's boutique The Green Onion, a 15-year fixture of the neighborhood, , a small outcry erupted across the Carroll Gardens Patch comments section and Facebook wall. 

"Why are so many long term mom-and-pop businesses closing and leaving the neighborhood?" asked reader Iliana Morti.

The same nerve was struck when in November. The building that owner Michael Davidov’s shop resides in, 319 Smith Street, had sold for $1.2 million and the new landlord subsequently doubled the rent from $2,700 to $5,400. 

"That shop should have been grandfathered in to the rent," commented Amal Doleh. abound.

As development continues to thrive and an influx of trendy chainlets and franchises such as , The Bourgeous Pig,  and enter the neighborhood with the financial support of a larger entity, can small businesses compete in today's Carroll Gardens?

Patch spoke with local business owners, would-be owners and real-estate experts for their thoughts on the subject. 

"The growth of Carroll Gardens, Cobble Hill and Boerum Hill have led to rising retail rent and increases in rent have pushed up the prices of mixed-use properties along the Smith and Court Street corridors," said Michael Guerra, Executive Vice President & Managing Director at the Brooklyn Division of Prudential Douglas Elliman. "While bank lending is limited due to stricter conforming rules," Guerra went on, "demand is very strong and prospective buyers we are representing have ample cash to close transactions."

A local couple hoping to open a new shoe store relayed their experience shopping for a location, for the most part experiencing an average rent ask of $7000 per month.

"We have been looking at commercial spaces," said the owner-to-be in an e-mail sent to Patch. "The place on the corner of Smith and Second Place was asking $7500 but has since lowered to $6000, minus a parking spot and an extra storage room that was in the first asking.  I heard went for $6500—the asking was $7000. The place by Trader Joe's is $110 per square foot and its 1900 square feet. The place on Smith and Bergen, a new bike shop, was asking $7000 and there were multiple bids in when I inquired." The couple is still looking for a commercial space.

When asked, owner of The Cobble Hil Think Tank Lisa Bowstead would not confirm how much she pays for rent in the new facility, but did acknowledge that it's "substantial."

It's one thing to enter into a business plan with high rent in mind, however, than to be forced to adjust to higher rent per square foot when a lease expires. Dramatic jumps of 50% can make it difficult to juggle other expenses, such as utility and vendor costs, and paying employees. As a result, sometimes closure is the only recourse.

By all accounts, it appeared that The Green Onion was a victim of the increasingly high commercial rents in the neighborhood.

From a rise in the cost of cotton to competition from surrounding businesses, a combination of factors contributed to the boutique's closure, a source familiar with the details conveyed. But the alleged main reason, was that owner Elliesha Villanueva didn't have landlords who were sympathetic to the challenges she was facing as a business owner.

"In her case, her landlord found out that Arthur is paying something like $8000 a month and she was paying something like $3500," the source recalled. "And they said, 'We want $8000.'" 

But not all landlords are as unforgiving of the demanding economy, and some work with independent shop owners to find a middle ground, seeing the mom-and-pop proprietors as an investment in retaining the special fabric of the neighborhood. 

"I'm very fortunate in that I have a fantastic landlord," said  owner Gaia DiLoreto. "I tell him if I am going to be a few days late or need help. He used to run a business in this space 50 years ago. So, he gets it."

How do you feel about supporting independent shop owners in the area? Should longstanding businesses be grandfathered into the rent when a building is sold? What other solutions could be proposed for helping mom-and-pops compete with corporate enterprises?

*This article has been updated from its original version to redact comments that were unsubstantiated.