clock menu more-arrow no yes

Filed under:

The rise and fall of Bleecker Street as high-end retail destination

New, 1 comment

How a cupcake shop led to a boom in luxury retail, but couldn’t sustain it for the long run

bleecker street retail rents
Courtesy Divwerf via Flickr

The Times has published an engrossing history of Bleecker Street as one of New York’s most exclusive, but short lived, retail destinations. The story points to everything that can go wrong with gentrification: High-end companies pushed out longtime, diverse businesses that called Bleecker Street home, and when the newcomers couldn’t get enough traffic to justify the sky-high rents, they shuttered and left the block empty.

The story, of course, begins with Magnolia Bakery. After the cupcake shop’s debut on Sex and the City in 2000, the resulting crowds convinced Robert Duffy, then president of Marc Jacobs, to open a store nearby. He outbid five tenants to open the Marc Jacobs Flagship on Bleecker and 11th streets, and told the Times back in 2001, “If I could have 20 stores on Bleecker Street, I would.”

More high-end boutiques, including as many as six Marc Jacobs boutiques, packed into the five-block radius surround Magnolia’s. (Landlords converted ground-floor apartments into retail to meet the demand.) Older businesses balked at rent renewals asking $45,000 a month, and the stretch lost everything from book stores to Thai restaurants to antique shops.

#unrealestatenyc

A post shared by Greg Vegas (@saxblabbath) on

But the cupcake tourists weren’t necessarily forking over cash to buy $400 t-shirts: “An open secret among retailers had it that Bleecker Street was a fancy Potemkin village, empty of customers,” the Times says. The founder of a luxury consulting firm told the paper Bleecker had essentially become “a vanity location—meaning it’s more about the image than about retail sales or foot traffic.”

The lack of business, plus the added pressure internet shopping has put on retail, caused many of the stores to then shutter, including Marc Jacobs. As landlords continue to hold out for high rents, storefronts sit empty. Robert Sietsema, restaurant critic at Curbed’s sister site Eater New York, compared the stretch—once comparable to Rodeo Drive—to “a Rust Belt city.”

It’s a problem that’s gotten the attention of local pols. This May, State Senator Brad Hoylman released the “Bleaker on Bleecker” report, billed as a snapshot of “high-rent blight” in the Village and Chelsea. He reports that “landlords will often leave stores empty for long periods of time in hopes of finding a tenant who can pay much higher rent.” The report continues, “Instead of renting to another independent business for a similar rent as the previous tenant, landlords will hold out for a tenant—often a large corporate chain—that is able to pay exponentially more than the previous tenant.”

Hoylman plans to introduce legislation to tackle the problem, creating retail zoning restrictions, phasing out tax deductions for landlords with persistent vacancies, and improving state resources for mom and pop businesses.

In the meantime, the once-luxe stretch of Bleecker sits mostly empty. Despite some beauty stores and Magnolia still operating, it is of little use to nearby residents. As the Times put its, “For many longtime Village residents, what the street is missing is not a cool factor but the essential mix of businesses that makes a neighborhood function.”