Everyone's got to pay the bills, right? And politicians are no different.
So the City Council's annual salary of $112,500 may seem appropriate given the cost of living in New York City. That is the argument recited, of course, if you ask a member of the New York City Council.
But some good government groups and City Hall observers disagree. Factor in the unrestricted outside income that council members can earn and the stipends they get from serving in leadership positions or as committee chairs, and that income can add up.
Councilmember Lewis Fidler, for instance, works as an attorney as well, ratcheting up at least an additional $140,000 on top of his council salary.
Some question whether moonlighting as an attorney or an investment banker will not conflict with policies decided later on the Council Chamber floor.
Members of the City Council have promised to mull over these issues, but have yet to specify what limitations, if any, will be considered next year. At a hearing before the Governmental Operations Committee last week, some proposals were floated and many got mixed reviews.
Last year, City Council members voted 41 to 5 to increase their salaries by 25 percent, from $90,000 to $112,500 following a recommendation from a mayoral appointed commission.
At the time, and at the behest of good government groups and Councilmember Tony Avella, who voted against the pay increase, the council promised to revisit several issues attached to their raise and covered in the commission's report. These included whether council member is a full time position, whether chairs or other leadership positions should be awarded additional pay and whether the council should be allowed to vote itself a raise.
And as promised, said Councilmember Simcha Felder, chair of the body's Governmental Operations Committee, several members sat down to revisit those questions a year later - and a couple grand richer.
Felder said he would not take a position on any of the issues until legislation was drafted and all interested parties had spoken. What that legislation would address - whether it would ban the controversial stipend, better known as lulus - he also would not say. Felder did say the council would likely take up the issues next year.
The City Council was repeatedly criticizedfor voting itself its own pay raise in 2006. The United States Congress and other state legislatures across the country can only enact raises for future terms of office. New York City Council members can enact an increase that takes effect immediately.
Some media outlets and good government groups, even the mayoral commission which recommended the pay increases last year, contend the integrity of government would be improved if the same class of legislators did not vote itself a fat raise.
The outside income and stipends for council leadership positions are far more controversial.
On top of their $112,500 salary, 46 members out of a 51-member body receive some sort of stipend (click hereto see our lulu chart). City Council Speaker Christine Quinn reins in the highest yearly check at $28,500, while members who chair smaller, select committees receive only $4,000.
The majority of members, nearly 55 percent, receive an extra $10,000 for chairing committees from education to veterans.
Those stipends, some good government groups contend, are merely a way for the City Council speaker to control members.
"In reality, it is a way for the speaker to exert influence over individual members, and reward those who either are loyal or need incentives to become faithful, by providing them with greater responsibilities or loftier titles that come with additional income," said Dick Dadey, the executive director of Citizens Union, the sister organization to Gotham Gazette's publisher.
Though Citizens Union and other advocacy groups, like the New York Public Interest Research Group, say banning all or some of the lulus would create more independence among City Council members, some members argue that their jobs as chairs demand much more time and legwork.
"I happen to think that's the type of dedication that deserves some money," said Councilmember Peter Vallone of chairs who hold several hearings a month and put in extra effort. "It's more of a behavior issue."
Members also said that because the large majority of them receive stipends, it is unlikely any undue influence by the speaker is exerted. Even so, advocates claim most government bodies, including the U.S. Congress, do not award legislators who chair committees.
Some good government advocates are more concerned about the influence a member's outside job can have on his or her City Council work.
With a council seat currently considered a part-time position, the members are unrestricted in the amount of money they can make outside of City Hall. For most, it's a nominal amount if anything at all, but several members have raked in a significant amount of outside cash - some more than $100,000 a year.
According to the most recent financial disclosure reports filed with the city's Conflict of Interest Board for fiscal year 2007, members who have a private legal practice are particularly adept at upping their annual income. Fidler makes a minimum of $252,500 and he could make as much as approximately $457,500, including his council salary.
(Because members are required to file their financial disclosure forms in ranges, such as from $5,000 to $35,000, the exact amount of outside income a member accumulates is not a matter of public record).
Councilmember Domenic Recchia also has a significant amount of outside income from his private law practice - between $100,000 and $250,000. Finance Committee Chairman David Weprin works as an attorney and as an investment banker when not in City Hall and makes between $105,000 and $285,000 on top of his council pay.
Most advocates and members agree the job of City Council member already is a full-time position, no matter what compensation he or she receives. But, good government groups say limiting council members outside income could ensure legislators are not influenced by their outside employment.
The majority of members who earn outside income are attorneys, and for them starting, stopping or even limiting their practice could make business rough when their eight-year term is over, said Vallone, who is an attorney. Vallone earned between $1,000 and $5,000 from his law practice, according to the financial disclosure documents, and earned between $5,000 and $34,999 from a realty partnership.
To address those concerns, Dadey of Citizens Union suggested mandating a more detailed disclosure form which would require more specific reporting on how many hours members are at their other jobs, and that lawyers disclose the number of clients they have and in what areas they practice.
It is unclear whether any of these issues will resurface in 2008 at City Hall. Last year, Quinn saidshe supported the speaker's stipends and did not think it was unethical for a sitting council to vote itself a raise.
And, like most politicians, some members of the City Council never really clock in or clock out of their position. Whether at church or the local coffee shop, most are always on the job, regardless of the hourly rate.
"We don't work five days a week," said Councilmember Larry Seabrook. "You go to church and you still deal with constituent service. We took an oath of office to serve, not an oath of poverty." Â
If there is one thing New York has to attract holiday shoppers and tourists from around the world, it's restaurants.
From fusion fare to destination dining establishments, like the Rainbow Room or Sardi's, New York can tickle the palates of residents and visitors alike with fine wines and decedent deserts throughout the year, not just during the holiday season.
More of the city's economy is directed by the ebb and flow of Wall Street, than the waiting list at a meatpacking district restaurant. But for some independent restaurateurs, catering businesses and grocery store owners, the year's final quarter, which includes celebrations from Thanksgiving to New Year’s Eve, is when they do the greatest percentage of their business. Many restaurateurs know a holiday rush, or lack thereof, can make or break their budgets.
The Food Crisis Elsewhere While slow sales may dampen restaurateurs' holiday spirit, at the other end of the economy spectrum, a slowing economy is making it difficult for some New York families to put even basic food on the table. Food-related industries and causes have been struggling this year throughout the city, especially food banks. Late last month just in time for Thanksgiving, the New York City Coalition Against Hunger released a report that revealed one in six New Yorkers lack sufficient food. As a result of slashed federal funding, food banks have been unable to keep shelves stocked with healthy, holiday goods as they confront increasing demand. More New York City residents are knocking on their door, advocates say, because of an economic slump nationwide. The city responded late last month with a one-time $1 million subsidy for the city's soup kitchens, but that bail out will not solve the longer term problems of funding at the federal level, advocates said. It seems getting a table at a restaurant near Broadway may be easier, but getting the necessary subsidized meal from a local charitable organization is becoming more of a challenge.
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The restaurant industry has been flourishing in New York City for the last decade, according to industry experts, which means more jobs and more money being funneled back into city coffers.
In 2006, 222 restaurants opened in New York City, according to the Zagat Survey, adding to the nearly 18,700 establishments citywide.
Though the growing industry is worth about $15 billion annually, according to the city comptroller’s office, dining out or dining in with a caterer does not necessarily affect the city's economy as much as other industries.
" It's not a big industry of itself," said Frank Braconi, chief economist at the city comptroller's office. "It pales in comparison to let's say the media or Wall Street." ( Wall Street is said to account for 20 percent of the city's total wages and salaries.)
Retail sales during December, which includes sales in the food service industry, should account for about 11 percent of the industry’s annual sales, said Braconi, which is 30 percent higher than an average month.
Braconi said about 20 percent of the food service business in the city is attributed to visitors. According to NYC & Company, the city's tourism and marketing organization, about 30 percent of visitor spending will be done in the fourth quarter.
The most popular activity for both international and domestic travelers frequenting the Big Apple is dining out, according to NYC & Company. In 2005, 88 percent of international visitors ate at restaurants, while 59 percent went sightseeing.
Restaurant or retail sales may mean little to city officials - who focus more on the Dow Jones Industrial than on Dolce and Gabbana - but a holiday season slump can mean life or death for the independent business owner or small restaurateur.
" The last quarter of the year is really what determines the annual sales," said E. Charles Hunt, the executive vice president of the New York State Restaurant Association. "You got two months back to back with holidays. People are more likely to go out to restaurants."
Hunt estimates that some restaurants may do 40 to 45 percent of their sales from October through December. This year, he said, because of the Broadway strike (see related story) a lot of midtown establishments may be counting their pennies.
That is certainly the case at midtown staple Sardi's, which saw sales decline between 30 to 50 percent during the stagehand union's 19-day standoff, said Sean Ricketts, the restaurant's dining room manager. Even now that the strike has ended, Ricketts said Sardi’s sales are at approximately 85 percent of where they should be.
Despite the slowdown, he added, he expects business to pick up rapidly in the coming weeks. December usually accounts for 20 percent of the restaurant’s business, he added.
“ Generally the holidays are very good for us,” said Ricketts. “Normally there is a lull in January or February, and the holidays, being in December, really support that lull.”
Though restaurants centered on New York City entertainment, like Broadway, or tourist attractions, like Rockefeller Center, see the holidays as a major boost, other establishments define the holiday season as just another day.
Richard Coraine, chief operating officer for the Union Square Hospitality Group, which includes restaurants such as the Union Square Café and Gramercy Tavern, said they may see an influx of holiday parties, as well as the revenue that comes from a larger party and tab, but sales overall remain consistent throughout the year.
In 2007, Coraine said, sales have been up 10 percent from last year.
“ I think it’s one of the vital components of a New York experience,” said Coraine. “I think the same thing about Broadway. New York has always been the place where you have the best restaurants.”
What goes better with buying and giving and family occasions than eating and drinking? Most New York caterers and even local grocery stores stock shelves throughout November and December in anticipation of the holiday rush.
But with the rising cost of food nationwide – due largely to the rising cost of energy and the demand for corn for ethanol– some grocery stores and catering mainstays have been disappointed with their sales so far this holiday season.
Tryg Siverson, executive chef at Balducci’s, the gourmet market and catering establishment in Lincoln Square, said so far this holiday season the store has seen only a 2 percent increase in sales over last year. For the Lincoln Square location in particular, that increase did not meet expectations, especially when Thanksgiving is usually one of their busiest periods.
For a brand name like Balducci’s, that could point to a slowing economy. And for similar establishments, which cater or deal in food completely through retail, profits can become extremely reliant upon the holiday season.
“ The entire six month period prior to Thanksgiving is entirely preparatory for Thanksgiving,” said Siverson. “We spend six months getting ready for one holiday.”
Some have not felt the slowdown.
Carl Hum, president and chief executive officer of the Brooklyn Chamber of Commerce, said manufacturers, like Acme Smoked Fish in Williamsburg, have doubled or tripled their shifts to meet demand. The holidays are when people, no matter what borough they live in, spend money, said Hum.
Even if the economy continues to slow down, he added, food will be the last thing to taper off.
“At tougher times, people are not going to buy that diamond bracelet or that car,” said Hum. “But they are going to buy food.”
Whether these holiday profits are spread out equally across the five boroughs and an array of income brackets is unlikely, said industry experts. Manhattan gets much of the season’s hectic rush – the tree at Rockefeller Center, Broadway and a plethora of other holiday attractions. But said Hum, “This is certainly a critical time for all industries in all boroughs.”
It also can serve as a sign of things to come. Economists say shopping trends or how often people dine out can become a decent indicator of the nation's economic stability. If you have the money to eat out every night, one could assume your holiday bonus was as plump as a pumpkin pie. If that trend staggers, then New Yorkers' salaries may be getting slashed or businesses may be cutting more than their Thanksgiving turkey.
We still have three weeks to go before the end of the year, with plenty of time left for holiday parties and nights out at our favorite restaurants. "It's the holiday season and everything's back to normal," said Hunt. "Broadway's back. There may have been some people that missed out that will come out and spend more."Â
As she prepared to ring up a young couple’s purchase of heavily discounted women’s clothing at the Century 21store in lower Manhattan, the sales clerk made the routine request. “Would you like a Century 21 Card?” she asked.
The man declined. “We’re from Denmark,” he explained, adding the card would probably be of little use there.
Many shoppers at the discount store and other stores across Manhattan would have similar reasons for passing up the opportunity for a charge card. In this time of a plummeting dollar, foreign visitors account for a rising portion of sales in New York City. They make Macy’s and Bloomingdale’s among the city’s top tourist destinations, cram the streets of SoHo and in an intrepid move to capitalize on the buying power of their currency – particularly the euro or the pound – brave the fitting rooms lines rooms and general chaos at Century 21.
With the U.S economy slowing and the spread of chain stores dimming the allure of shopping for some New Yorkers, foreigners seem likely to stave off any major reversal in the retail economy at least for now. No wonder the Bloomberg administration has launched a campaign to lure additional touriststo city streets – and shops.
Shopping has long been a key industry in New York City. Department stores were invented here, and by the 1890s, a tourist guide said, "All America goes to New York for its shopping."
New York City boasts some 53,600 stores or more than 170 per square mile, according to one estimate. During the holiday season, some 300,000 New Yorkers will work in retail, including food stores, said Frank Braconi, chief economist at the city comptroller's office. Last year, retail workers earned a total of $9.6 billion, with stores ringing up a total of $67 billion in sales.
The weeks between Thanksgiving and Christmas are key to the health of retail. Sales of all goods in the city are approximately 30 percent higher in December than in an average month, Braconi said. In fact, he said, New York’s retail industry is somewhat more dependent on the holiday season than stores in the rest of the nation, partly because so many tourists come to New York to shop.
This year stores have had reason to worry. Nationwide figures found sales on so-called Black Friday (the day after Thanksgiving when, if all goes according to plan, merchants’ red ink turns to black) up by 8.3 percent from the same day a year ago. Analysts concluded, however, that, while more people went shopping, the average shopper spent less money than he or she had in 2006. Retail industry analysts reported consumers “trading down” or frequenting less expensive stores than they had last year. “People are cheaping out,” Bill Dreher of Deutsche Bank Securities has said.
In New York State, the Siena Research Institute found consumer confidence falling, particularly in the city. Based on interviews, a third of the state’s consumer plan to spend less this year than they had last holiday season. Only 8 percent said they would spend more. Perhaps reflecting this, New York City businesses have decided to hire less seasonal workers than usual this year, according to the state Department of Labor.
Rebecca Marion, a spokesperson for the Retail Council of New York, though, has disputed the pessimism. ”Our members are happy,” she told the Albany Times Union. “We’re going to have to wait and see.” Eighty percent of merchants in the state reported that their sales for Thanksgiving weekend “were the same as or better than their sales over the same period of time in 2006,” the federation found.
By some accounts, Black Friday in the city went well. “We didn’t see any indication of declining sales,” a spokesperson for J&R Computer World toldthe New York Sun.
More recent national figures have proved more discouraging though. (Breakdowns of sales by city or state were not available.) ShopperTrak, a private research company, foundsales for the week after Thanksgiving, which ended December 1, dropped by 4.4 percent from the same week in 2006.The firm attributed some of this to bad weather in the Northeast and the Midwest and to the long holiday shopping season this year. “Retailers shouldn’t panic as there are plenty of good shopping days left in the 2007 season,” ShopperTrak’s Bill Martin said in a written statement.
The possible slowdown comes at a time when shopping in New York has undergone a number of changes, including the emergence of more retail outlets outside of Manhattan and the growth of on-line shopping. Perhaps none has been as striking as the growth of chain stores and the accompanying decline of locally owned stores.
Drugstores and Starbucks have led the way. In January, one count found 220 Duane Reade drugstores and 205 Starbucks in the five boroughs, with larges number of Rite-Aids and CVS stores as well. Payless shoes had 60 outlets in Queens and Brooklyn alone, while the Children’s Placeboasted more than 30 New York City stores.
In general, the number of clothing stores in New York City rose by 6.4 percent from 2000 to 2004 and chains accounted for much of that increase. Some applaud the trend for giving New Yorkers the same choices consumers in much of the rest of the country have and for bringing down prices. Shoppers in New York City pay about 10 percent more for clothing than people elsewhere in the U.S., Elizabeth Macbride reported in Crain’s New York, but that is 10 percent less than they paid in 2000. During the same period, prices for furniture and household goods declined as well, according to Macbride.
The chains bring service to parts of the city that may not have had adequate services previously. “There are some areas of the city that are dying to get chain stores in,” said Vanessa Gruen of the Municipal Art Society, noting that many residents of Bedford-Stuyvesant were “delighted” when an Applebee’s Restaurant opened in their community.
But others see the chains as stamping out local businesses that take a greater interest in the community. Residents of the Upper West Side, for example, have seen a decline in the number of so-called Safe Havens– stores where children can go if they are being bothered in the street -- as locally owned businesses shut their doors. Chain stores often refuse to take part in the program.
When an owner-operated stationery store in Park Slope closed several years ago – a victim of Staplesand rising rent—students at the local elementary school found it difficult to find required school supplies. The owner had had an agreement with the principal and teachers to stock materials the students needed. Staples does not do that.
The change also affects the character of the city.
“ What makes New York City so wonderful is the uniqueness of the neighborhoods and the uniqueness of the stores,” said Gruen. In a city where people walk so much, they “want to see interesting stores,” she said – not just another Banana Republic or Gap.”
Jeanne Giordano, who oversaw redevelopment of the retail space in Grand Central Terminal, believes chain stores have a place in the city. “There are many different neighborhoods to choose from in terms of shopping so if you are industrious in scouting out the options, there is something for everyone,“ she said in an e-mail. “Chains show up in certain areas and not others and chains are not all that bad for basic cheaper stuff. Precious boutiques have higher priced items… If you shop the whole city you get the mix.”
Some alternatives remain in New York, particularly outside Manhattan. Many of these are ethnic retail strips catering to immigrant shoppers from the city and the surrounding areas. A recent report by the Center for an Urban Futurefound a number of “once modest retail areas [that] have evolved from primarily serving local customers into regional shopping districts that routinely attract large numbers of second generation shoppers from the suburbs who come to buy saris, spices, plantains, herbal medicines and an assortment of other ethnic products.”
These areas include Jackson Heights, which caters to South Asians; Flushing with products and services for Korean and Chinese shoppers; and Richmond Hill, which has seen a sharp growth in businesses owned by and aimed at Guyanese, Sikhs and Trinidadians from throughout the metropolitan area.
The sharp rise in the number of businesses — businesses in Flushing, for instance, grew by almost 55 percent between 1994 and 2004 — has fueled a corresponding jump in jobs in these communities, according to the report. Employment in Flushing rose by 12 percent during the decade, while Washington Heights, with many businesses serving Dominicans, saw employment increase by about 34 percent.
While suburbanites have little reason to come to New York to go to The Gap, the ethnic businesses serve as a lure. “You do have a large percentage of people coming from Connecticut, New Jersey Massachusetts,” Mabel Law, executive director of the Flushing Business Improvement District, told the center. ”This is where they can get certain foods and products that aren’t available where they live.”
A number of private efforts have tried to foster locally owned business. One of the most prominent is Chelsea Market on 9th Avenue. When Irving Cohen decided to develop the former Nabisco factory in the 1990s he insisted that all tenants be family owned businesses. “It was a bit crazy, but it was a social experiment,” Cohen has said. “It worked out very, very well.”
At a forum last year, Cohen said he hoped to help develop projects to encourage family-owned businesses at La Marqueta in East Harlem and Hunts Point in the Bronx.
Project Enterprise, which offers no-credit, no-collateral loans to black and Hispanic entrepreneurs in New York City also hopes to foster locally owned businesses. “There has been a lot of gentrification so it’s very hard for small businesses to stay open,” said the organization’s marketing director, Christina McSwain. To promote the businesses, the project recently sponsored a bazaar with 35 vendors, offering products such as African sculpture, food and soaps.
While individual organizations and businesses work to preserve and promote local entrepreneurs, the city government has been largely absent. The last government effort to address the issue came in the late 1980s when a push for commercial rent control failed. More recently, some argue that the massive development projects promoted by the Bloomberg administration, and particularly by Deputy Mayor Daniel Doctoroff. who said last week that he would be stepping down, have promoted chains at the expense of local stores.
Gruen has said she fears that the huge Atlantic Yards developmentin Brooklyn would bring more chain stores to the area, which already is home to such businesses as Target, Marshall’s and DSW shoes, and drive up rents in the neighborhood, pushing out the remaining locally owned businesses.
Crafting policies to address the retail mix in New York presents a challenge Gruen said, because the needs vary so much from community to community. “The city should have a menu of different options,” she said.
Vicky Weiner of the Pratt Center for Community Development has outlinedsome possible ideas, including banning chain stores in some neighborhoods or putting a cap on them, requiring that there be a review of what impact new business would have on a community, offering inducements for government to buy from local businesses and providing tax deductions for small businesses. A handful of smaller cities have implemented some of these strategies, and San Francisco has restricted chains in part of the city.
Zoning can provide a tool as well, according to Victor Dadras, an architect who works with communities to preserve downtowns and main streets. For example, he said, some cities do not allow banks on corners in certain areas.
Dadras sees such effort as vital to New York City. “Once every neighborhood has the same stores -- Starbucks, Rite Aid, Papa John’s Pizza, and all the others –- there is no reason to go from neighborhood to neighborhood”— or from city to city, Dadras said at a forum last year. ”New York City is, along with Boston and Philadelphia, one of the older cities in North America, and we need to be at the forefront of preserving character, which is ultimately what makes people who visit New York come back to shop.”
Chain stores or not, though, people still come to New York to shop. These days many are from other countries.
Last year, well before the dollar’s latest plunge, foreign tourism rose about 7 percent with more than 7 million visitors from other countries, according to NYC & Company, the city’s tourism agency.. These visitors spent almost $5 billion shopping. After dining out (see related story) shopping represents the most popular activity for visitors to New York.
With the Euro worth almost $1.50– a far cry from the days when the currencies were essentially equivalent -- and the pound about $2 – every day in the U.S. is a sale day for European shoppers. And if you’re coming to the U.S. to shop, New York makes for a more appealing destination for many than, say, a mall in the suburbs.
“I would be hard-pressed to find another metropolitan area that is going to see as big an effect from the falling dollar,” Marisa DeNatale of Moody’s Economy.com has said.
Some companies, such as Ireland’s Tour America, have offered shopping trip to New York. “The number one attraction for Irish people coming to the states – and we’ve done our research – is not DisneyWorld in Orlando,” the company’s Mary McKenna told the Irish Times. “It’s shopping.”
Century 21 has reported that about a third of the business at its New York City location comes from foreign tourists. Tiffany and Co. said sales at its Fifth Avenue jewelry store rose 30 percent in the second quarter of 2007, fueled largely by European shoppers. “They’re buying engagement rings, diamond jewelry, silver jewelry and everything in between,” the store’s Mark Aaron has said. At Macy’s another popular destination, handbags are the number one seller among foreign visitors. McKenna reports that her clients come to New York to the buy name brands that cost them far less here as well as cosmetics, accessories and electronics.
European papers offer tips for where to shop in New York – Century 21 and the Woodbury Common Mall, for example—along with breathless accounts on shopping forays to New York. Writing under the headline “Saks and the City” in London’s Daily Mirror, Emily Stott describeda three-day binge in the city. After snatching up a DKNY watch for half the price it would have cost “at home,” bagloads of cosmetics and shampoo and the “most impractical ever dress” from Diesel,” Shott explained, “Al this shopping leaves time for only a few hours sight-seeing.”
The women did take a ride on the Staten Island, which, since it’s free, will remain a bargain whatever, the currency exchange rates.Â