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Luxury Development Leveling Local Businesses on Orchard Street, Locals Say

 Fred Connors says his business is still struggling to thrive alongside the construction site at 196 Orchard St.
FRED Salon
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LOWER EAST SIDE — A luxury condo development at the corner of East Houston and Orchard streets that has already leveled a handful of mom and pops is now continuing to wreck surviving local businesses with disruptive construction, according to the business owners, who are either battling to stay afloat or packing up. 

Business owners near 196 Orchard St. — where several shops have been razed to make way for condos starting at around $1 million atop an Equinox Fitness Club — say their businesses are suffering as a result of the excessive noise, debris and sidewalk closures the construction site has brought to their once-thriving stretch of Orchard Street.

Fred Connors, who runs hair salon FRED directly next to the construction site, said his troubles started when demolition began towards the end of 2015 — ravaging his small storefront with debris and sending cracks through the floor and walls. His once-reliable client base has never recovered, he said.

“For the past year, I have been in hell,” he said, gesturing to a row of empty salon chairs. “As you can see, there is no one in my salon.”

Connors, a hair dresser from Canada, came to the city in the summer of 2014 to open a salon in the bustling Lower East Side, selecting a storefront on a stretch of Orchard Street between East Houston and Stanton streets for its lively atmosphere. 

But the neighborhood took a turn when Katz’s Deli sold its neighboring property to Ben Shaoul of the Magnum Real Estate Group as part of a $17 million deal to secure the iconic deli’s place in the neighborhood.

Connors’ neighbors, including Ray’s Pizza and 24-hour Turkish kabob spot Bereket, were served with eviction notices. Demolition began on the site shortly afterwards, followed by drilling. Clients who came by for a haircut in February  2016 were met with noise, swinging light fixtures, and products falling from the shelves — feeling rattled and in some cases unsafe, many never came back, Connors said.

“I know for a fact a lot of clients find the amount of construction happening has created an uneasy and unpleasant environment for them come in and get their hair cut,” he said, noting a sharp decline in business since the start of construction.

In March, Connors’ full-time manager quit due to the anxiety-inducing atmosphere in the salon, leaving him abruptly understaffed, he said.

Meanwhile, vibrations from the neighboring construction have taken a physical toll on the space — floorboards are raised and cracks run up the walls, while a particularly deep crack along the basement, paired with the excavation of the neighboring site, has led to a roach infestation.

But the fallout from construction has not just sapped the salon of its previous customer base, said Connors. Construction workers put up signs indicating sidewalk closure and traffic cones around his business and down the block, deterring walk-ins and effectively draining the street of pedestrian foot traffic.

“I feel the entire street has been negatively impacted by this construction because the pedestrian flow is no longer here,” said Connors. “Now, there’s just no people on this block of Orchard…they prefer to be in an area with less resistance. Why venture down this block when construction causes so much interruption,when you can have uninterrupted pleasure walking down another street?”

Connors’ surviving neighbors also testify to the construction-induced damage and changes in the neighborhood — Alan Natkiel of Georgia’s Eastside BBQ, who says the work has “damaged the heck out of” his restaurant space, points to the eerie vacancies down the block as evidence that the development site is bad for business.

“It’s horrible,” he said, pointing to the departure of Taqueria Lower East Side, Karaoke Boho, and American Apparel, among others. “[Construction] has resulted in destroying every business on the block with the exception of a couple.”

But while Connors and Natkiel have opted to brave declining sales and foot traffic in hopes of a post-construction resurgence, others are moving on to more peopled and less noisy pastures. Gallerist Andre Escarameia said the ramifications from construction were instrumental in his decision to shutter the Rooster Gallery and relocate to Washington Heights in the coming months.

“It’s disrupting completely the life of this block,” he said of the construction, adding he wants a livelier atmosphere for his gallery. “Everything is closing…It’s becoming a dead zone. There’s nobody walking around here.”

Recently, community members have rallied around distraught local businesses.

In response to overwhelming complaints from neighbors, Community Board 3's Land Use Committee on Wednesday recommended the city's Board of Standards and Appeals deny Equinox Fitness Club a variance to build one of their monolith luxury gyms on the site, citing the developer's "history of negative impact on the community."

"The construction of this specific property has had significant negative impacts to adjacent properties, merchants, and residents," said public board member Tim Laughlin, also the president of the Lower East Side Partnership.

A spokesperson for the Magnum Real Estate Group said the group has not received any open complaints or violations regarding the construction site, and continues to ensure the site is up to code while working in “good faith” with neighbors of the site.

“Moving forward, we will continue to work collaboratively with the community to address and rectify any credible issues that are brought to our attention,” said a rep in a statement. 

There are currently no open complaints or violations against the site through the Department of Buildings, according to city records.