The Realty Report: LES Special

By Paul Seres, Helios Hospitality

November 25, 2014

The earliest memories I have of the Lower East Side are of my father taking me on a Sunday to Ratners for breakfast. Then to Orchard Street, where he bought me my first suit when I was 6 years old.

The days of retail stores spilling out onto Orchard Street every Sunday are long gone. And although Orchard Street is closed to automobile traffic every Sunday, it is a far cry from the days when vendors lined the streets.

The Lower East Side called me back in 1999 when I moved into my first apartment on Ludlow Street, right across from the iconic bar, Max Fish. At that time the neighborhood had bars and restaurants but was more reminiscent of the LES of my childhood, than today. The first major shift came when The Hotel on Rivington began construction. This would be the beginning of a phase of development, with the goal to attract out of town guests to the area.  It was also the first property to have an impact on the skyline; no more tenements and 5 story walk-ups. Next in line was the Thompson LES on Allen Street, another tall contemporary structure that changed the aesthetic of the area.

Soon after that, the snowball effect was in place and landlords began cashing in on properties and giving up air rights, which would forever change the dynamic of the neighborhood. Dozens of restaurants, bars, and live music venues opened their doors and the Lower East Side became the place to go for people who were looking for a cool downtown vibe.

During a period of rapid development, local residents decided that not all-vertical development is alike, after construction of the Blue Condo at 105 Norfolk Street was complete. And soon after a height restriction was put in place on any development not already in the ground. Developers would now have to go through the BSA process for an exception. Several other developments, prior to this ruling had already begun only to be halted by the recession of 2008. These projects would sit dormant for another few years. Nonetheless, the demand for hospitality business stayed strong and the projects would become The Ludlow Hotel at 136 Ludlow Street, and the soon to open Intercontinental located on Orchard St).

When I first joined The DL as a partner, the challenges back in 2011 are very much the same as they are now, how do you operate a successful nightlife venue without impacting quality of life of the local residents. The LES is constantly changing and is many things to many different types of people. This in and of itself creates a challenge in terms of how you market and operate the business. It keeps you as an operator, on your toes.  My partners and I own and operate 3 businesses in the LES and one on Avenue C. My advice to those considering opening a venture in the LES and NYC in general, would be to foster a positive relationship with both the community and the local police precinct. Get involved with your community board and attend NYPD meetings for local business owners. Nurturing these relationships and being an active community member has helped me significantly in establishing my business as a positive influence to the neighborhood.

Since my early days in the hospitality industry in the LES I have seen the commercial real estate market boom in the area, where storefront prices, depending on the specific location, are getting anywhere between $75 per foot, on up to $125 per foot. With rents this high, there seems to be a high turnover in leases when businesses don’t already have a built in customer base. Galleries are moving further south where rents are less expensive and restaurants and bars seem to remain the steady course of tenants, which helps make the Lower East Side the destination that it is.

Paul Seres is Vice President & Founding Trustee of the NYC Hospitality Alliance. Paul, former President of the Nightlife Association has owned and operated several hospitality venues in New York everything from restaurants and bars to nightclubs and has been an advocate for the industry for the last decade. Paul is a member of Community Board 4 where he is on the Executive Committee, Co-Chair of the Business, Licensing and Permitting Committee, and is on the Parks and Waterfront committee. Paul became a partner/owner at The DL and Dinner on Ludlow in the LES in 2011, a restaurant lounge that boasts the largest rooftop space in the area and is responsible for it’s day to day operations and community affairs. 

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