Seniors and Disabled Roosevelt Island Shoppers Bus To Queens Gets A Temporary Reprieve From Elimination, Will Stay In Service Until At Least 75% Of Vacant Main Street Stores Leased By Hudson Related Master Leaseholder - Main Street Revitalization Is Goal

 Image of Long Island City Costco From Roosevelt Island via Bridge & Tunnel Club

Reported last Monday that the Roosevelt Island Seniors/Disabled Shoppers Bus service to the Broadway/21 Street Queens Shopping area/Costco would soon be terminated in accordance with terms of the Main Street Retail Master Leaseholder Agreement between the Roosevelt Island Operating Corp (RIOC) and the new Main Street Landlord/Master Leaseholder Hudson/Related partnership. From last Monday's post:

This morning, I sent the following message to the Hudson/Related Master Leaseholder Principal David Kramer:

I have been advised that the Roosevelt Island Shoppers Bus that transports Senior Citizens and Disabled people from Roosevelt Island to stores in Long Island City is required to be terminated by RIOC according to the terms of the Main Street Retail Master Lease Agreement.

Is that true?  If so, do you have any comment for the Roosevelt Islander Blog on the reason why this service is being terminated and when will the Shoppers Bus be terminated?

Thank you.

Within hours, Mr. Kramer replied:

The retail study report recommended ending the Shopper's Bus. It was memorialized in the recent lease agreement, but the genesis was the retail consultant's recommendation.

I just received the following joint statement from RIOC President Leslie Torres and Hudson/Related Principal David Kramer:

Historically, when the island did not have many retail options it made sense to provide seniors and disabled island residents with a "shoppers bus;" to take island residents off island to shop. As part of the plan to revitalize Main Street, we will attract new businesses to the island, providing more shopping options for residents. To help support Island business expansion, when the contract agreement to revitalize Main Street was entered, language discontinuing the "shoppers bus" was included. However, the bus service will continue to be operated by RIOC until the vacant retail spaces are at least 75% developed.

The goal of the master lease agreement is to revitalize the Main Street corridor and to provide Roosevelt Islanders with stores they want to shop in. RIOC and Hudson Related look forward to a thriving commercial corridor on Main Street.

The retail consultant's recommendation regarding the Shoppers Bus was as follows:

... RIOC operates a “Shopper’s Bus”, which departs at 10:30 a.m. on Monday and Tuesday mornings and that takes residents to the Broadway Shopping Center, at the intersection of 21st Street and Broadway.This shopping center is also within walking distance of the Broadway business district. Once a month, the Shopper’s Bus travels to the Costco Wholesale store located at Vernon Boulevard and Broadway, although given its infrequency, this service is primarily geared towards and used by more elderly shoppers.While the “Shopper’s Bus” is an excellent service for those residents who utilize it, it clearly represents a major source of leaked spending.The RIOC should consider strategies to shift some of this spending to Main Street. One idea would be to eliminate the bus and provide coupons and other subsidies to elderly, disabled and low-income residents to encourage Main Street spending....

Good job by Hudson/Related and RIOC in responding to community concerns about the Shoppers Bus. Time will tell if the new revitalized Main Street will be able to serve the needs of those residents who currently use the Shoppers Bus to Queens as well as all the residents of Roosevelt Island.

There was an interesting discussion on the comments to the original Shoppers Bus post. From Jesse Webster:

My argument is that the existing retailers are selling at an unreasonable margin given their costs.

Like fare increases on the NYC Subway, high prices keep customers away, requiring additional price increases to maintain revenue.

Beyond the head start they get from subsidized rent, there are steps these retailers could take to reduce their prices to be at least competitive with stores like Duane Reade.

For instance, they could look to other wholesale sources which might sell to them more cheaply.

Gristedes has the benefits both of city-wide scale and state-subsidized rent. It's not reflected in their pricing.

The retailers we have seem to look at Islanders as a captive audience, and the stakes have been too low for them to honestly compete for customers on price, store cleanliness, etc. The bodega and hardware store don't even bother to lift the gates over their windows when they are open -- as if Main Street is so dangerous it requires them to operate from inside a cage.

Market rents aren't going to solve all of our problems Having a landlord who enforces leases and values the commercial real estate and quality of life on this Island, and who has a stake in filling the storefronts with merchants who will be successful, will go a long way toward revitalizing main street.

Frank Farance replied:

Good points.

Why would we expect the best shopping in our
bedroom community when other bedroom communities have similar problems?

Regarding price, my sense is that price reductions come from the availability of information to the consumer and to the store.  So to take "bakgwailo"'s example below, if everyone knew D-R sells Guiness at $11.50 and Gristede's sells it for $12.00 AND the perceived value of the convenience of Gristede's was less than $0.50, then D-R might get more Guiness business.

Still Gristede's might not reduce their price, even if there were perfect information known by all.

I'm sure you know: a common technique for retailers is to offer sales on certain items to get you in the door and hope you'll buy the higher margin items.  You bought a dozen eggs on sale (20 cents off, how many eggs can you buy?), but you also bought a couple six-packs of Guiness (as an Octagon, Manhattan Park, or Northtown resident, you're already in the store, why travel to D-R to save a couple quarters?).  Thus, there is no business rationale to reduce the price of Guiness or, said differently, there is no reason for Gristede's to "leave the money on the table".

Overall, I'm not sure how prices that you feel are unjustified get pushed down.  Even when the WIRE did comparison shopping at Gristede's and other local supermarkets, it didn't really bring down prices regardless of their losing customers.  I think it took a significant erosion of their customer base over several years to recognize they needed to address their problems.  <-- That's hard to motivate/enforce via a Master Lease or even the prior arrangements with RIOC.

The truth is, like all bedroom communities, we are a captive audience and (really) the marketplace incorporates that knowledge and adapts to it (e.g., higher prices, less selection, lesser quality, etc.).  Right?

I think location has an effect, too.  So the most efficiency (competition, information) would be at the place where convenience cost is low (Southtown over subway, next to tram) and get the market would get progressively worse has one got further away (e.g., Gristede's across from Manhattan Park).

Adding more stores (as many people intuitively feel) will reduce convenience cost, but that only works if the marketplace is able to support the additional business (I've already expressed my doubts).

Anyway, thanks for responding, I enjoyed reading your comment.

and so did 455 Resident:

yes, because we are a captive audience, competition amongst retailers can not exist except in the case of eateries.  The retail space will have to be comprised of boutique style or specialty shops to fill specific desires and wants of the community.

If places like Gristedes are forced to uphold their lease agreements, the quality of their merchandise and service will improve.  It has to.  Otherwise their business will deteriorate and they will close.

Prior to H-R, the existing retailers could get away with sub-standard service because their rents were so low or not enforced, so there was no real impact on the wallet.  M & D was supposed to renovate and upgrade their store when they signed a new lease with RIOC a couple of years ago.  Not surprisingly, this never happened.

H-R is on the right track.  The biggest challenge they face is picking the right mix of stores.

Here's Mr. Kramer at the Retail Town Hall Meeting talking about Main Street retail market rents and the dissatisfaction he shares with many residents concerning the Roosevelt Island Gristedes store.

You Tube Video of Main Street Retail Town Hall Meeting