The End of an Empire

The day after a holiday has proven to be historically slow for me, business-wise at Pata Negra.  Call it the hangover due to the extra day off, and the harsh reality of the workweek slamming us on Tuesday.  The humidity and rain didn’t help matters; just ask Roddick or Sharapova at the U.S. Open.   Business owners like to offer explanations for slow nights, in part to make themselves feel better, and also to occupy the mind so as not to go stark mad from boredom and despair.

The only small, saving grace is the opportunity to close early or at least on time. Alas, even that was taken away from me by a first time date who were hitting it off really nicely, pushing the closing time past my proposed expectations, destroying any visions of tying one off at a local bar.  Don’t get me wrong. It makes me happy when new romances bud at my place.  I even have several customers who celebrate their first dates and anniversaries.  Playing Cupid feels good.

I think they looked up and realized they were in a romantic bubble, all on their own, and granted mercy to me.  I thank them and wish them love’s best.

Then after closing, I hailed a cab on first avenue, routine for every late night I have ever spent at Pata Negra.  If the subway actually worked at 2 am, it would be the first option, but good luck with that.  I believe that in order to keep the New York City economy working, it is our responsibility to spend money in our fair Gotham.  It is important to keep dining out, supporting local businesses if possible, and taking cabs sometimes.  If residents stop fueling the economy, people lose jobs, mom and pop shops close, and the result is the land of Duane Reade and 7-Eleven.  I am not advocating spending money you don’t have.  Moderation is the key.  Just don’t shut it down in panic.

As I caught up on Twitter feeds, trying to avoid the LXTV banter, I raised my head up and I was safely home.  I looked up at the fare and the taximeter read $19.50.  I asked the cabbie if there was something wrong with his meter.  Perhaps it is too fast.  I usually pay $16.00. He replied that the rates went up.  In disbelief I googled “taxi fare hike” and sure enough, the first ten hits confirmed a surcharge and 17% increase.  The article went on to explain how this would help the cabbies offset gas prices and inflation.  I could barely leave the cab.  I was stunned.

Backtracking to the start of Tuesday, I had spent a considerable amount of time with the managing agent for the space I rent for Pata Negra.  The actual owners of the building are investors from the Midwest, so talking to an “owner” is not possible.  The topic of contention was yet another real estate tax increase.  For those of you not in the biz, the City of New York assesses each building every year and assigns a value to each property.  Then the City judges whether there should be an increase in property value or decrease.  In other words, the City raises taxes or lowers taxes.  As commercial tenants, leases are designed so that a fraction or all of the real estate taxes are passed on to the renters, even though the renters do not own the property.  Savvy landlords include this rider in commercial leases, saving them thousands of dollars.

I opened Pata Negra during the height of the recession in February 2008.  I did not anticipate the taxes to be substantial.  But what I should have done was note who was in charge.  Mayor Michael Bloomberg.  The taxes assessed were $6,500 for 2009-2010, $12,000 for 20010-2011, then $17,500 for 2011-2012, and now $21,000 for 2012 – 2013.  The final raise in taxes results in an increase of over 50% of the rent.

How does the property value increase during a recession?  What is the magic formula that calculates the property value? Will the taxes ever stabilize?

And now you know why, the cost of running a business goes up, and why the goods and services provided to the public goes up accordingly.  The small business people who can’t make it go into debt and simply close.  Not the trendy deep pocket, deep investor hot chef hot spots, real people businesses.  The integrity of the neighborhood changes, as large corporations move in, and the landscape changes dramatically.  That is why as a resident you see the same thing every other block, an ATM, drug store, or large chain.  Mom and pop, retire.  Small business owner. Too bad.  Go back to work for someone like most other people.  As long as the City is getting paid, why not continue to raise the real estate tax?

When the third term Mayor states he is for small business, he is talking out of two sides of his mouth.  The real estate stealth tax is murdering the entrepreneurial spirit.  It is decimating the genuine neighborhood landscape.  And if you are a restaurant owner trying to earn that shiny “A” on that front door, get ready to pay for that too.  The City has earned over $50 million in fines in the first nine months alone.

And where is all of this real estate tax money going?  Our successful school system?  I taught special education for junior high schools in two of the toughest neighborhoods for thirteen years.  Believe me when I tell you that the school system turns no profit and so the Mayor is not interested in fixing the public school system.  Each pupil costs $20,000 dollars per year to educate and as far as the Mayor is concerned that is a loss, red ink.  Forget about cultivating seeds for the future.  Only the well to do families or culturally intelligent (knowledgeable about the system and its subsidies) can afford private schools.  If a child makes it out of public school and succeeds, the child is doing so in spite of the education system.  Why has no one asked the question that a Mayor who can run a billion dollar business cannot put the right people in place to fix the public school system?  Why not pump much of this tax revenue into our schools?

Instead, a fortune (albeit mostly federal funding) was put into creating green spaces and bike lanes that only bike messengers and delivery men use or misuse, depending on which direction they are headed. Every cabbie I have spoken to on my way home from work complains over the amount of tickets they have received for picking up passengers “illegally”.  Where are the cabbies supposed to pick up their fares?  They can’t pick up on the bike lane.  They can’t pick up in the bus lane.  Catch 22 for tickets. Clever boy.

And now the Mayor wants to restrict the size of soft drinks sold to help fight obesity.  I applaud the Mayor for this initiative.  I myself have a weakness for Coca-Cola and it certainly contributes to my extra weight and ensuing health problems.  As a former educator I can’t tell you how many obese teens drowned themselves in large Tropical Fantasy soda bottles and red or purple sugary grenade shaped drinks.  More than candy, the kids love their sugary drinks.

Do you know how many times the average child in the public school system attends a physical education class?  Twice per week.  Absent that day.  Oh well.  Why not implement a citywide fitness program that addresses this crisis?  But the Mayor has chosen soda as his enemy, when there is a larger, more formidable opponent – Big Tobacco.  If the Mayor wants to take credit for banning cigarettes from places of business and public venues, why not finish the job?  All the studies have proven that cigarettes kill.  So why not take on Big Tobacco and ban cigarettes altogether?  Non-smokers have to breathe second hand smoke against our will and the pollution level in the city is ridiculous.  On a recent trip to Vermont I was astounded at what clean air actually feels like.

But the Mayor will not pick this fight, after all he has a business to run, and he only picks battles that he is sure he can win, like taxing small business with a magical system, fining cab drivers for illegal pick ups, or charging millions of dollars in fines to small restaurants.  The Mayor will gladly tax tobacco sales for the revenue of course.

Why not pick a fight with the NRA, and once and for all make New York City safer than any other metropolis in America?  Two more people were shot over the weekend attending the West Indian parade in Brooklyn.  The year is 2012 and New York City still has its fir share of gun violence.  Seriously?  Welfare of the people?  Soda size?

I am sure the Mayor is looking into another loophole to be elected to a fourth term, mayor for life, taxing and fining the hard working class that makes this city go, to death or departure, whichever comes first.  I for one want an advocate for New York City, not just the wealthy and the Wall Street community.  A mayor who will not fight teacher, fireman or police unions for a fair wage, or impose unsubstantiated stealth taxes and fines to suffocate the working class.  With housing prices absolutely unaffordable, the Mayor has already forced much of the working class to leave the actual city they work in, fringing in suburbs and depleted barrios, contemplating monthly whether or not they can make ends meet.

As a business owner I have been repeating the mantra, “Survival is the new success.” Wouldn’t it be nice to actually build something, earn a living and actually be able to keep it?  Perhaps I am laying too much blame at the feet of the Mayor.  There is the City Council, and legislature at Albany to consider for policy making too.  But as leader of this City, I expect him to protect its citizens and facilitate our progress.  For this reason, I cannot give him a passing grade.  The next mayor may do worse for our fair city, as the blueprint for making money is well established by the current administration.  I can only hope that the next candidate will come from a more reasonable meager hardworking background, so the candidate can at least relate to the dilemma of being an average working person in this Empire city that seems to be no longer ours.