The DNAinfo archives brought to you by WNYC.
Read the press release here.

Cafe Dada Becomes Latest Small Business Closure as Park Slope Rents Rise

 The sudden closure of French-Hungarian Cafe Dada on Seventh Avenue is the latest in a string of small businesses closures in Park Slope.
The sudden closure of French-Hungarian Cafe Dada on Seventh Avenue is the latest in a string of small businesses closures in Park Slope.
View Full Caption
DNAinfo/Caroline Spivack

PARK SLOPE — The sudden closure of a French-Hungarian bistro on Seventh Avenue is the latest in a slew of small businesses being squeezed out of Park Slope by high rents and online shoppers, say local real estate and retail experts.

In the past year more than a dozen small businesses across the neighborhood — but mostly on Seventh Avenue — have shuttered, often citing online competition.

Rising rents are stifling long-term growth for small business, which is why big names are springing up in their stead. It's a trend that shows the thoroughfare's retail market is having trouble keeping pace with the neighborhood's booming residential scene, said an area real estate agent.

"It's kind of puzzling because Seventh Avenue is a vibrant area — residential rentals certainly have not suffered — but the retail just hasn't caught up to the residential market," said Paul Pinizzotto, with Garfield Realty, which has been on Seventh Avenue for the past 20 years. "Commercial rents have gone up to the point where it's not sustainable for some businesses. That's why you're seeing more Starbucks and nail salons." 

The most recent closure, five-year old eatery Cafe Dada, quietly shuttered July 27, raising eyebrows for would-be customers turning up at 57 Seventh Avenue only to discover locked doors and a stripped interior, said one former customer.

"That was sudden — can't say I'm too surprised though because there are so many little guys closing lately," said Park Slope resident Abbey Collins. "It's like you can't walk a block without spotting an empty storefront."

Retail rents on Seventh Avenue have shot up 35 percent from winter of 2016 to winter 2017, according to an April report released from the Real Estate Board of New York. The average rent per square foot for the main street has jumped from $96 to $129 and it's those rocketing rents that are putting the squeeze on area mom and pops.

"We've been pushing and trying," Cafe Dada co-owner Laszlo Galambos told Bklyner, which first reported the closure. “There’s a huge hype about the neighborhood, prices have pumped up and many small businesses had to close."

Cafe Dada's owners could not be reached for comment. 

The spate of recent closures have racked up to more than a dozen businesses including Sport Prospect, Gear to Go Outfitters and Goldy + Mac. Meanwhile big brands with more money to throw around have set up shop such as Blue Bottle Coffee, Chipotle and Starbucks.

The Seventh Avenue surge has caused some businesses to relocate or shift their focus to other parts of the neighborhood such as Fifth Avenue, where the average rent per a square foot actually dropped to $78 from $85, according to the same Real Estate Board of New York report. 

"The neighborhood is definitely changing," said Katie Rosenhouse, owner of Buttermilk Bakeshop at 260 Fifth Ave., who recently consolidated from her Seventh Avenue location. “There’s more foot traffic on Fifth Avenue compared to Seventh and we have more space over here."

But Fifth Avenue also has its share of challenges. 

"There are certainly those struggling against the tide," said Mark Caserta, the executive director of the Fifth Avenue Business Improvement District. "Mostly what’s happening is high commercial rent, higher taxes on properties and you can't discount the competition from larger box stores and online." 

The thoroughfare currently only has a 6.5 percent vacancy rate — and had been as high as 11 percent in past years — but for those feeling the pinch the group has sought to highlight small shops with new promotions and by looping retailers in to apps such as Hi Commerce — to directly connect customers with products they're hunting for.

It's a creative approach to a complex problem, said Caserta.

"It's complicated — there's no one solution when it's several factors," said Caserta. "So we're trying to get creative and do our best to bridge that gap."