Here's a recent article from Crain's New York Business about hard times on 74th Street...
Crain's New York Business
January 14, 2008
Enduring popularity might be Little India's undoing;
Established retailers pinched by rents in Jackson Heights commercial district
BY: Doaa Elkady
Thirty-five years ago, Subhash Kapadia opened the Sam and Raj appliance store on 74th Street in Jackson Heights.
Mr. Kapadia's business catered to Indians looking for small appliances that ran on 220 volts that they could take back to their native country. The only shop of its kind in the neighborhood, Sam and Raj was a hit almost immediately. Mr. Kapadia's accomplishment inspired other Indian-Americans to set up businesses in Jackson Heights; within 10 years, 74th Street was home to a number of Indian-owned eateries, clothing stores and an Indian grocery.
``That's how Little India was born,'' Mr. Kapadia says.
The Jackson Heights retail center is still one of the most well-known ethnic shopping strips in New York. But like other popular retail areas in the city, it is becoming a victim of its own success. Competitors are rushing in, driving up rents and displacing longtime merchants like Mr. Kapadia.
Now, the Little India that Mr. Kapadia helped build includes more than 250 businesses, according to the Jackson Heights Merchants Association. Visitors are inundated with the flash of colorful saris, the glitter of Indian jewelry and the robust smells of South Asian cooking. The streets are never empty. Parking is difficult. Stores are open late.
The strip's popularity and reputation have made Jackson Heights one of the choice locations for Indian-Americans to live and do business. But that has proved a double-edged sword for Little India's merchants, who have benefited from the phenomenon but who now face competitive pressures.
``For decades, business was so good we didn't know what to do,'' Mr. Kapadia says. ``But today, many of the businesses are struggling to stay open.''
Declining demand
Mr. Kapadia has suffered from increased competition, higher rents and declining demand among Indian-Americans for 220-volt appliances. ``It is a different age,'' he says. ``Most of what I sell is available in India now.''
Last year, Mr. Kapadia was forced to move into a 1,330-square-foot store from 2,300 square feet.
Across the street from Mr. Kapadia's store, Rajbhog Sweets is also hurting. Owner Nirval Shah's family opened the dessert shop in 1977.
``Business has been down since 9/11, but the pressure really began two years ago,'' Mr. Shah says. Profits fell 10% in both 2005 and 2006. He blames the downturn in part on a 50% jump in ingredient costs.
``Rents have always increased, but now we can't keep up with them,'' Mr. Shah says. ``You can't charge customers more just because it's more expensive to make food. This puts us at a loss.''
In the last five years, Mr. Shah has watched 15 to 20 eateries close; some of them had been in Little India for as long as 20 years. ``If things don't change, we may have to downsize or shut down,'' he says.
Niche is better
Some merchants, like Harshad Patel, manager of Patel Brothers grocery, say landlords are turning a blind eye to their plight.
``I pay $35,000 a month in rent,'' Mr. Patel says. ``I tell my landlord, `Profit is down; costs are up,' but he says, `It's not my business.' ''
Not everyone is complaining, though. Niche retailers face less competition. Armaan Kumar, who sells traditional Indian wedding apparel at Armaan's Bridal, says serving a limited market helps him remain profitable.
``People will never stop getting married,'' Mr. Kumar says. ``When the economy's down, you have to be smart about what you're selling.''
There's no evidence that the district is in jeopardy, says Swain Weiner, senior director of sales at Massey Knakal Realty Services.
``Retailers are facing difficulties, but Little India has suffered less than places in Elmhurst or Corona,'' Mr. Weiner says. ``There are no vacant stores. If a space opens up, lots of people bid on it. Turnover is very small. That says things are still healthy.''
That's little consolation to struggling business owners, who are now seeking rent protection. The City Council last introduced a commercial rent control bill in 1987. It fell one vote short of passing because of fears that it would discourage economic growth. Efforts to revive interest in such a law have been unsuccessful so far.
