February 2, 2009
New Report Calls for Greater Help for Local Lower East Side Businesses
Velázquez: Report Signals Importance of Economic Recovery Bill
New York, NY – Congresswoman Nydia M. Velázquez (D-N.Y.) was joined today by local entrepreneurs and community leaders from the Good Ole Lower East Side (GOLES) and the Urban Justice League (UJL) organizations to release a study on the challenges that threaten the survival of small businesses in the historic Lower East Side neighborhood. The report, No Go for Local Business: The Decline of the Lower East Side’s Small Business Identity, examines the impact that an influx of high-end retail and residential developments has had on locally-owned businesses and presents recommendations to preserve the community’s culture. Velázquez said the challenges faced by Lower East Side businesses underscore the importance of the small business provisions contained in the economic recovery legislation that the U.S. House of Representatives passed last week.
“The Lower East Side has played an important role in New York City’s history, and entrepreneurs have helped establish a unique community in this neighborhood,” said Velázquez, the Chairwoman of the House Small Business Committee. “We must do all we can to save the locally owned businesses that provide valuable jobs and affordable goods to the area’s working- and middle-class residents.”
For the study, volunteers talked to locally owned small businesses about the struggles they face as developers remake the Lower East Side into a hub of high-end housing and upscale nightlife. The study found that small businesses, which are representative of the Lower East side’s diverse demographics, are under increasing strain from gentrification. 68% of the surveyed businesses were minority owned, nearly half of whom live in the Lower East side. Demonstrating the historic roots of the area, over half of the local businesses were family owned and nearly a quarter of those entrepreneurs surveyed had been operating in the Lower East Side for 20 years or more. Shockingly, three out of four entrepreneurs said that rising costs are outpacing their profits at an unsustainable rate.
“Small businesses everywhere are struggling during these difficult economic times and those on the Lower East Side are no different,” said Velázquez. “The study released today highlights some of the unique challenges they face every day.”
Velázquez said the House-passed bill will target $30 billion in tax relief to small businesses, while unlocking more than $13 billion for loans, lines of credit, and equity capital to smaller firms. By allowing the Small Business Administration to guarantee a larger percentage of loans and by permitting the agency to provide liquidity directly into the small business lending markets, the legislation will encourage the flow of capital to smaller firms.
“By providing struggling entrepreneurs with access to capital and targeting $30 billion in tax relief to smaller firms, we can provide them with the tools they need to help lead the nation’s economic recovery,” Velázquez added. “Our entrepreneurs made the Lower East Side the vibrant community it is, and with the right help, both at the federal and local levels, they can revitalize our local economy, and continue serving the needs of their neighbors.”