Promise and Peril for Businesses Facing Gentrification

The Brooklyn neighborhood of Crown Heights, like many urban areas in America, is experiencing an influx of wealthier newcomers and rising rents. How are local female entrepreneurs navigating the breakneck pace of change?

Candice Helfand-Rogers By Candice Helfand-Rogers

The intersection of Franklin Ave. and Sterling Place in Crown Heights, Brooklyn.

The intersection of Franklin Ave. and Sterling Place in Crown Heights, Brooklyn.

Since 1999, Hanne Tierney has managed a performance art space, FiveMyles, in the north-central Brooklyn neighborhood of Crown Heights. Her softly lit space, punctuated with works of art on the walls, floors and ceilings, sits on St. John’s Place between Classon and Franklin Avenues. She described the area as “a totally African-American neighborhood” when she opened up, and “underserved, but very together — a real community of people.”

The location has given her a front row seat to the evolution of Crown Heights from a poverty-stricken area into an up-and-coming residential hotspot. It’s one of many neighborhoods in New York and other American cities that are experiencing gentrification, or a period of revitalization driven by the arrival of higher-income, and often whiter, residents.

Tierney, who is white, says she sees a lot more white residents on the streets near her space these days, and is concerned about what feels like an erosion of the neighborhood’s character and sense of community. The demographic shift is not in her imagination. Overall, the majority of Crown Heights residents are black, but their number, according to census data, has fallen to 65 percent of the population as of 2015 from 81 percent in 2000.

Crown Heights still boasts a rich, diverse culture rooted in its mix of Caribbean and Hasidic Jewish residents. It also has a troubled past marred by flares of racial tensions, as well as an uncertain future. The onset of gentrification has brought unsettling changes and new opportunities, as well as rising real estate costs that threaten to both push out longtime residents and overwhelm young newcomers.

CH-MapHow do female entrepreneurs fit into such a landscape? What have they seen as the neighborhood has changed around them? How are they responding, and will they survive?

The Dynamic History of Crown Heights

Franklin Ave. near Eastern Parkway in Crown Heights is a commercial center in the neighborhood, where small businesses line blocks peppered with the outposts of corporate giants and shuttered storefronts seeking new tenants. Go on a Friday night or a Saturday afternoon, and the sidewalks are bustling with people running errands, window shopping and meeting friends for a meal.

This was not always the look and feel of Crown Heights. In the early twentieth century, it was a predominantly white and Jewish upper-class residential neighborhood. In the 1960s, its black population grew in size, along with racial tensions. Troubles escalated over the next few decades between the two communities, peaking in the three-day Crown Heights Riot of 1991, set off when a car in the motorcade of a Jewish religious leader accidentally struck two children of Guyanese immigrants. The violence took place fewer than two miles from that now-booming commercial stretch of Franklin Ave.

Since then, racial tensions and crime rates have both diminished, though gentrification has brought a new set of challenges. FiveMyles’ Tierney says the recent changes seem to have come suddenly. “Neighbors would say, ‘Have you noticed that they’re cleaning the streets more often? That there are more cops around?’ And suddenly, construction was happening.”

Soon, residential real estate costs began to climb. Between 1990 and 2010, rents rose by 30 percent, according to researchers at New York University’s Furman Center for Real Estate and Urban Policy. And they continue to go up — in the 12 months ended February 2016, residential rental rates rose by 8 percent, compared to only half a percentage point for Brooklyn overall, one MNS Real Estate study found.

Likewise, commercial landlords in the area began to charge more. Retail rentals on Franklin Ave. near Eastern Parkway average between $80 to $99 per square foot currently, up from $65 to $79 in 2014, according to CPEX Real Estate.

CH-Rental

A space that once housed a laundromat is one of several empty storefronts to be found along Franklin Ave.

Even so, rents in commercial spaces are still lower than in many other areas of Brooklyn —  not to mention Manhattan — and some women business owners have grabbed the chance to secure properties in an up-and-coming area.

Female Entrepreneurs Seizing Opportunity

New York City is one of the most active areas in the nation for women’s business ownership, according to CrunchBase. And Brooklyn is at the forefront with 28 percent of startups in the borough reporting at least one female founder. “Women’s entrepreneurship is something that has experienced incredible growth in the past decade,” says Andrew Hoan, president of the Brooklyn Chamber of Commerce.

Areas like Crown Heights are appealing to women business owners like Allison Kave and Keavy Landreth, the owners of bar-bakery hybrid Butter & Scotch. Though they chose their Franklin Ave. location for a number of reasons — its proximity to public transportation, for example — money was also a big factor.

“Even if we had the money, areas like Williamsburg wouldn’t have worked. But also, we didn’t have the money,” Kave says. “So we needed a place we could afford where the rents hadn’t already skyrocketed out of reach.”

Money is, of course, a significant issue for most women starting businesses. Kave and Landreth, who are white, successfully turned to crowdfunding for some of the startup funds they needed.

Dollars and cents aren’t always the main considerations when choosing a location, however. Kawana Jefferson, who opened Sweet Brooklyn Bar last May, had previously worked at a bar in Bedford-Stuyvesant, a neighborhood to the north that’s also gentrifying, and sought out a similarly evolving area in which to open her own establishment.

Crown Heights “was of interest because it’s still in a transitional place,” she says. “There are a lot of old residents still there, however you can see the growth just standing on the block. You see different faces, different colors, different people coming into the neighborhood.”

As a relatively new business owner in the area, Jefferson, who is black, admits her perspective may be different from someone who has been running a business locally for years. “I wanted to be here because you see the neighborhood growing, and you want to help in that by bringing a new business where people can come and socialize. That’s what gets neighborhoods moving in the right direction.”

Michelle Lewis, who in 2013 operated a confectionery sauce business, Spoonable, out of a basement space just off of Franklin Ave., also saw rapid growth around her, even as a relative newcomer. “The changes that I saw on Franklin Ave., that happened over one year, were unbelievable. It boomed,” she says, adding that “these were expensive little shops” that were appearing.

CH-BS

The interior of Butter & Scotch, located on Franklin Ave. in Crown Heights.

The newer women business owners all said they felt welcomed by local residents. “I did know the neighbors. People did stop and talk. I sometimes hired people from the neighborhood to help me” as part-time workers, Lewis says. In fact, Kave, Tierney and Jefferson also made pointed efforts to hire from within the immediately surrounding community, they said.

In his experience, the Chamber’s Hoan says female entrepreneurs strive to contribute to their neighborhoods. “Women entrepreneurs take their responsibility as stewards of employees and their employees’ families very seriously.”

Committed to the Community

While Crown Heights remains affordable for these female entrepreneurs, other areas that are further along in the gentrification process show the direction in which rents may be headed — and the potential strains ahead.

Along Bedford Ave. in trendy Williamsburg, rates are an eye-popping $350 per square foot, according to MNS Real Estate, making it one of the most expensive retail corridors in the entire United States. In 2010, they were between $80 to $100 per square foot — about where Crown Heights is now.

Hoan says that “there’s an affordability crisis, make no mistake about it.” Still, he considers the current difficulties to be “good challenges.” Brooklyn business owners are generally pleased with where the borough is headed, he says. “There are new customers, and new businesses are able to hire, expand and grow. That’s good for everyone.”

Kave of Butter & Scotch says “it’s good that, for awhile anyway, this was an area in which a small business owner with ambition could open a business and have a community support it.” But she expressed concern about what lies ahead, saying that “it seems as though rent for commercial and residential spaces has grown and increased so dramatically, it’s kind of a challenge for any small business.”

Indeed, for some, the arrival of chains like Starbucks to Crown Heights is indicative of hypergentrification, which could mean that the area may soon become too pricey for even the new crop of small business owners — nevermind older businesses and residents.

A small business owner displays a sign on Franklin Ave. condemning corporate presence in Crown Heights.

A sign on Franklin Ave. encourages residents to support small businesses in Crown Heights.

Hoan hopes members of the community — residents and entrepreneurs alike — will continue to work to ensure everyone has a place as Brooklyn continues to change. “It’s on all of us — the communities impacted, and those that have yet to experience it — to have these challenging conversations. One should not shy away from them.”

For their part, these women running ventures — new and old, black and white — in Crown Heights say they’re committed to the neighborhood and the people in it, and are here to stay.

“The relationships and stories that connect people here, it does feel like a small town, and that’s something that’s really valuable to us — to step into a neighborhood and become part of a community,” Kave says.

And Tierney, now an 18-year Crown Heights veteran, also plans to stick around, despite her reservations about the direction of the neighborhood. “FiveMyles is so integrated into the neighborhood. We belong here, and I can’t imagine doing this somewhere else.”

Posted: February 7, 2017

Candice Helfand-RogersPromise and Peril for Businesses Facing Gentrification
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