By Patrick Hedlund
DNAinfo News Editor
EAST VILLAGE — Competitive rents and retail restrictions, including a ban on extending leases to bars, have kept a string of storefronts on Avenue A owned by the city’s housing authority empty.
Four of the seven storefronts on the avenue between East Third and Second streets in the First Houses complex are currently vacant, compelling the local community board to investigate the cause of the depressed block at a meeting Tuesday.
NYCHA representative John Mauser told members of Community Board 3’s Economic Development Committee that the block wasn't as deserted as it seemed, explaining that a pharmacy recently signed a lease for the space at 41 Avenue A, and that a single tenant is currently eyeing two vacant properties on the block.
But the combination of higher-than-average rents and limitations on which types of businesses can operate there have made it difficult for prospective tenants to pursue the spaces, the committee concluded.
Mauser said that NYCHA, with assistance from an outside appraiser, has set rent rates on Avenue A in the mid- to high-$50s per square foot. That’s about $20 lower than at the end of 2008, during the real estate boom, he noted, adding that NYCHA also pays the tenants’ property taxes.
A residential real estate broker who works exclusively in the East Village stated that the Manhattan-wide average price per square foot is currently $48, suggesting that the Housing Authority may be charging too much.
“We should really be getting down to the average or lower,” said Rob Stevenson, a broker for the Real Estate Group New York who’s lived in the neighborhood for the past 17 years.
Mausner assured that NYCHA is “not outpacing” average rents, despite the broker's assertions.
Several new nightlife venues have recently sprung up along the high-traffic stretch, but since NYCHA does not lease to bars — which landlords tend to favor, because liquor-serving establishments can afford to pay higher rents — the authority is more limited in whom it can place in their properties.
One East Village store owner who previously tried to secure a space on the block said it wasn’t NYCHA’s prices, but the authority’s stringent policy on retail uses that kept her from moving in.
Dina Leor explained that her Mexican folk art shop, La Sirena, was prevented from taking a lease because she planned to offer classes and possibly serve tea to customers.
She said that the ban on multiple uses combined with the fact that NYCHA usually offers only five-year leases didn’t jibe with her long-term business plan.
“It didn’t seem like a very positive prospect,” Leor said.
Nonetheless, Mauser noted that the three tenants currently on the block — a stationery store, a day care and a pet food shop — are “stable tenancies” that are not in danger of closing.
But if nightlife continues to be the dominating trend on the avenue — where bars and restaurants represent a third of the nearly 150 retail properties — the waiting game could continue.
"[Average retailers] can't pay 6, $7,000 a month," Stevenson said. "That tells you what's going on down here."