Shops On Main went from idea to reality in the last decade. The deal Hudson-Related cut with RIOC celebrated its 10th anniversary, this month, but has it been a successful marriage?
By David Stone
Getting a long view, we studied RIOC’s last annual budget before signing with Hudson-Related and the launch of Shops On Main.
Was it the “shock and awe” Hudson president David Kramer boasted of or something more akin to Flops On Main? As Kramer told The Daily in a recent Q&A, he believes the initiative has been successful, largely because businesses held during the pandemic.
But, especially for RIOC, the numbers don’t look so good, and some are startling.
Before Shops On Main…
Back in 2011, Steve Shane, who reportedly opposed the Hudson-Related deal, was still RIOC’s president. And David Paterson was governor.
Fernando Martinez was vice president of operations and Steve Chironis was vice president and chief financial officer. In 2014, both left their jobs after scandal raked RIOC, and Martinez eventually served time in prison.
In a budget signed off on by Chironis and approved by the board, RIOC projected commercial revenue of $1,502,000 for the coming year.
And that was before Riverwalk Commons with Duane Reade, Starbucks and Fuji East entered the mix.
A 10-year projection expected a commercial revenue increase to $2,349,000 in 2021 with no new resources added.
But this year’s approved budget says they’ll get only $1,661,743, roughly a 1% increase over a decade, around $700,00 less than expected. Even after adding over a half-dozen new, active storefronts.
Flops On Main…?
What went wrong?
Comparison’s are hard because, with the income now in private hands, details are scarce. But, while being something of a revelation, the 2011 numbers also expose some curiosities.
We’ve criticized RIOC’s leasing of the old library space at 526 Main. But that criticism darkened after seeing the 2011 numbers. The New York Public Library paid RIOC $21,000 annually before Shops On Main, projected to $28,000 in 2021.
RIOC agreed to paying Hudson-Related $75,000, nearly tripling the projection, without negotiating with any other potential space providers. And the space is so small, RIOC was forced into seizing other office space in the community. The notorious takeover of Blackwell House was one result.
Until, this year, RIOC enjoyed 4,664 square feet, rent free, at 591 Main Street, in Westview, for four decades.
In addition, Hudson-Related added RIVAA’s 2015 square foot space at 527 Main as a rental after RIOC allowed the artists collective to operate without charge. The same is true of the Thrift Shop’s 3,835 square feet. The nonprofit was later booted out, and 520 Main is now medical rental space.
Although the details provided by RIOC in 2011 are not matched with any contemporary figures, some conclusions are unavoidable.
Conclusion: Shops On Main Flops for RIOC
Once you add in other commercial revenue not included in the 2011 budget, the losses for RIOC and the community are stark. Not only are they faced with more of the same empty storefronts, residents must foot even more of RIOC’s ever-bloating budget through the hidden RIOC tax.
Without more detail, estimations are inexact, to say the least, but from what we know, income for RIOC on commercial rent should be at least double.
And here’s an odd twist, the income is held down by Hudson-Related’s claim to be losing money with Shops On Main. We can believe it, but that saves them from profit-sharing with RIOC built into their agreement.
In spite of all this, we are not aware of any debate within RIOC or its board over the value of continuing this deal. Or of investigating further.
But with Governor Cuomo soon leaving and, with him, tight-fisted control over RIOC from 150 miles up the Hudson River, some change is inevitable.
Here again, we must rely on our elected officials, assembly member Rebecca Seawright, senator José Serrano and city council member Ben Kallos, for educating incoming governor Kathy Hochul. Seawright, for one, has an established relationship with Hochul as well as insight into Roosevelt Island.
With RIOC’s board next to useless in terms of governance, Seawright, Serrano and Kallos grow more relevant for Roosevelt Island’s future than ever before.
Someone needs to look more closely at what, for RIOC, is Flops On Main as well as the whole financial operation.
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