Harlem Powerbrokers Brainstorm Ways to Stem Small Business Closures

By Jeff Mays on August 15, 2012 7:25am 

Harlem powerbrokers met at Sylvia's recently to discuss the rise in small business closures.
Harlem powerbrokers met at Sylvia's recently to discuss the rise in small business closures.
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DNAinfo/Paul Lomax

HARLEM — A group of local leaders met at Sylvia's Restaurant this week to come up with ways to stem a recent spate of small business closures.

Rep. Charles Rangel, City Councilwoman Inez Dickens, Lloyd Williams of the Greater Harlem Chamber of Commerce and Regina Smith of the Harlem Business Alliance gathered at the famous restaurant in response to a rash of mostly black-owned businesses being shuttered in the last few months.

"We have to realize we are going through an economic change," Rangel said after the meeting.

As Harlem grows in popularity and new restaurants and bars open on Lenox Avenue, several established black-owned businesses have begun to close. Among the businesses that have shuttered recently are Hue-Man Bookstore, the bowling alley Harlem Lanes and Mobay Uptown, a Caribbean soul food restaurant along 125th Street.

Along the hot Frederick Douglass Boulevard corridor, Nectar Wine Bar and Society Coffee have also shut down. Sherman's Barbecue, a 60-year-old rib joint that served the Beatles, also closed recently.

Other businesses facing problems are Lenox Lounge.

"It's a myriad of problems. High rent is one problem, we don't have access to capital and some people don't know how to run a back office," Dickens said. "I'm just putting out fires, so I haven't had a chance to think about this collectively."

Dickens added she often gets calls from small businesses in need of help hours before a court date or just before the marshal is showing up to perform an eviction.

"What concerns me most is those who held it together are being pushed out. If you hold it together you should be respected and given an opportunity to continue," said Walter Edwards, CEO of Full Spectrum NY, which is about to open My Image Studios LLC on 116th Street between Lenox and Fifth avenues.

Kenneth Woods, president of Sylvia Woods Inc., which owns Sylvia's Restaurant, said his business has avoided some of the financial difficulties of other establishments because it controls its own real estate.

"That's a major part of our success," he said.

Harlem Lanes and Hue-Man are among the stores that have cited rising rents as a partial cause of their demise.

Woods recalled how his brother, Van, told entrepreneurs as far back as the 1980s, when Harlem wasn't as popular, to buy as much property as they could.

"He was blowing the horn," Kenneth Woods said. "It's amazing how much commercial property that Harlem black businesses have lost."

He also said many small business owners lack access to capital.

"With a business, you have to grow, and to do that you have to have access to capital," Woods said. "Unfortunately, commercial banks these days are not friendly lenders."

Still, Woods' popular business has suffered difficulties, too. The six-figure real estate taxes on the property has doubled in the past three to five years.

New businesses must do a better job of forecasting future costs and factor Harlem's rising real estate costs into their business plans, Woods added.

Marva Allen, Hue-Man's CEO and co-owner, said it might be too late to help many small businesses because of the gentrification of Harlem.

"Helping small business would have had to happen 20 years ago," said Allen, who is continuing to sell books online. "The horse has left the gate.

"When politicians put programs in place for regentrification and not revitalization, they did not do a panoramic view of how that would hurt small businesses," she added. "And nothing was put in place to protect them."

Access to capital is still the major obstacle many small businesses face, Allen said.

"When small businesses in Harlem get to the point of struggle they don't have the credit. Unless they are going to find a way for small businesses to access a capital for growth they will be spinning their wheels doing the same thing without hope for growth," he said.

Sakita Holley, a small business owner who is a a publicist and editorial director of the Eat in Harlem blog, said residents are clamoring for politicians and non-profits to "be much more visible during these tough economic times," especially after this recent wave of small business closures.

"More resources need to be made available to business owners and more needs to be done to make the community feel like they're a partner to the businesses that are asking for their support," Holley said.
 
Regina Smith, executive director of the Harlem Business Alliance, recently joined with 125th Street Business Improvement District, Harlem Park to Park and the Aloft Harlem Hotel to form the Harlem Promotional Alliance to help Harlem small businesses market themselves and take advantage of the neighborhood's popularity as a tourist destination.
 
Similar efforts are needed, she said.

"We are looking to come up with solutions better tailored to the needs of our entrepreneurs. We have to go deeper," Smith said.

For example, to help with the issue of rising rents, small businesses may need help with lease negotiations, experts said. Business owners can also be paired with community organizations that may have available commercial space at reduced prices.

Allen of Hue-Man said she is being creative. Next month, Hue-Man will partner with My Image Studios to host a book-signing by Miami Heat star Dwyane Wade. The event will allow Hue-Man to keep a presence in Harlem while a brick-and-mortar location.

The fact that many of the businesses that have closed are minority-owned makes the effort even more important to Smith.

"We have to make it work. We have no choice," she said.

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