New development closes Flushing’s quintessential small businesses

John Choe, the executive director of the Greater Flushing Chamber of Commerce, catalogs business closures and guided the Eagle on a tour of the shuttered shops and restaurants. Eagle photo by Naeisha Rose.

By Naeisha Rose

Special to the Eagle

Several vacant storefronts dot the commercial district along Prince Street in Flushing. The stores have closed over the past year as exorbitant rent hikes and diminished tenant bargaining power have made it impossible for many to stay in business in what was once thriving region for local entrepreneurs.

John Choe, the executive director of the Greater Flushing Chamber of Commerce, catalogs the closures and guided the Eagle on a tour of the shuttered shops and restaurants, including Cantonese Palace on 37th Avenue, one of the first to close.

"This was one of the oldest restaurants on this block," said Choe of the restaurant that had been around for more than a decade. "The fact that it is closing is of concern."

Another business that closed earlier in the year was the Vietnamese restaurant Phò located on 38th Avenue.

Recent closures on 38th Avenue also included Canton Gourmet and Nan Xiang Xiao Long Bao, one of the most sought-after soup dumpling eateries in the city. Customers said goodbye to both restaurants last month.

"I would say that Nan Xiang was maybe the most popular restaurant in Flushing," said Choe. "The fact that this closed was a much bigger cause of concern. On the weekends you will see people lined up outside trying to get in."

Rent hikes that became unsustainable for small businesses throughout Flushing. Today, entire sections of the neighborhood feature more store gates rolled down and more “for rent” or “for sale” signs taped up.

"Nan Xiang started around 2006, and at that time the previous owner was paying $3,000 a month," Choe said, adding that the business expanded from one section on the block to three "and it is now $15,000 per section, which adds up to $45,000 in rent. The landlord even wants to raise the rent. This pushed the owner to close the business."

New developments and the franchises make it hard for the veteran restaurant and business owners to advocate for new, reasonable leases.

In 2015, the real estate and management firm F&T group created a 333,000-square-feet mixed used development called One Fulton Square that brought in an array of restaurants and a luxury hotel, resulting in higher rents across the region.

A shuttered business in Flushing. Smaller shops have been forced to close over the past year due to exorbitant rent hikes.

Many of the restaurants that moved in are owned by larger firms.

"Some of these newer restaurants like PappaRich is a part of a conglomerate," Choe said. "When they move to Flushing, they brought with them a marketing budget from their corporate parent. These smaller restaurants don't have such a marketing budget."

Before the new guard of businesses and restaurants opened, the older ones relied on word of mouth to promote their business; now they need marketing teams, he said.

"They are at a competitive disadvantage in terms of marketing," Choe said. "These developments have increased the value of the land and when there is an increase in value landlords start charging a higher rent."

One Fulton Square comprises much of 39th Avenue on Prince Street, and the PappaRich restaurant is on the second floor of the development, across the street from Bó Noodle House, which closed earlier this month.

Just a mere few blocks away from One Fulton Square rises Tangram Tower, a development that is being built on 136-20 38th Ave. by F&T and is expected to be 1.2 million-square-feet, according to the website for the realty company. The project will also attract new restaurants to the area.

"We are very concerned about this new one," said Choe.

Ironically, some of the stores within the square are being priced out too.  

Though Bake Code, Kingza and Chatime — an Asian and European fusion bakery, a Japanese restaurant and a bubble tea store — were popular spots, they all closed in early May.

"They closed pretty much at the same time," Choe said.

Presso, a beloved coffee store that was also located in the square, closed down because it couldn't maintain the $30,000 in rent at One Fulton.

"It was a well-received coffee house," Choe said. "It was trendy, it had large comfortable sofas and people could just hang out there. You usually found those types of coffee houses in Manhattan or Brooklyn. So this was the first high-end coffee house in Flushing."

Nan Xiang Xiao Long Bao was one of the most sought-after soup dumpling eateries in the city before it shut down last month.

Across the street from Nan Xiang on 39th Avenue, was Rong Chinese Restaurant, which also closed earlier this month.

"The owner was paying even more than Presso. He was paying $50,000 in rent," Choe said. "He was on the corner, which is prime real estate."

The other recent closures on 37th Avenue were Shaking Crab, Kissa Bar and HaoXiangJu — a seafood restaurant, a desert bar and a Chinese/Taiwanese restaurant.

"With the high rent there is a pressure to bring in a lot of customers," Choe said. "They all closed down at the same time. When they were about to renew their lease they all decided they were not going to pay the higher rent."

When asked about the Small Business Jobs Survival Act, a piece of legislation that would help small business owners renew their leases with commercial landlords, Choe said he was not sure wehter the bill would have slowed or prevented the closures.

"They would have a little bit more position to negotiate, but at this point we are at a landlord market where landlords set the prices because they know there is always going to be a person willing to pay the higher rent,” Choe said. “But based on the vacancies I don't know that is necessarily true that they can find a new business that could move in.”

"All these new developers moving in are basically cashing in on the economic activity that the smaller businesses created,” he continued. “Part of the land value is based on foot traffic. That wasn't the developers creating that. That was the small businesses."

To James Chen, a long-time Flushing resident and liaison for customers and small business owners, the loss of the businesses on Prince Street was also a loss of culture and the fulfillment of the American dream.

"Flushing has changed dramatically in the last 10 years, and more rapidly in the last five years," said Chen, the founder of GoHive, a logistics and planning platform that helped small businesses with deliveries and their online footprint. "What happened here, is that a lot of business owners weren't ready for it."

A lot of the restaurants here were mom-and-pop shops, he said.

"The rents they had were five-year leases and then after that the rents won't be readjusted," said Chen. "After five years, the rents were $18,000. A lot of mom-and-pop shops can't afford that. That is why they are disappearing."

The overdevelopment within a small area troubled Chen, who is also the founder of Blink Marketing, located on 37-05 Prince Street.

"When you have so much competition within a mile or two, it doesn't matter what business it is — it is going to be suffering," Chen said. "37th Avenue is right next door and if you go down to 41st that is four blocks. Do you know how many restaurants are in these four blocks? There are over 30 restaurants."

Some businesses are paying higher rent per-square-foot than in Manhattan, Chen said.

"The streets here were built small. They weren't meant to have this much foot traffic at all at the same time," said Chen.

Flushing Councilmember Peter Koo worked with the Department of Transportation to expand the sidewalks of Main Street and Roosevelt Avenue in 2018, but Chen it so far hasn’t served small businesses.

"This is the most competitive place to open a restaurant. In one place there is a Shake Shack, Five Guys Burger and a BareBurger. Who is going to benefit from this?" Chen said. "The food won't be good anymore. Since there are no more Asian mom-and-pop stores, the food will change our identity."

To live and eat in Flushing, one must be either super rich or super poor, he said. There will no longer be any services for those that want quality and affordable fresh food.

"There is no in-between anymore," Chen said. "These mom-and-pop shops made the place unique because there was a culture behind it."