What’s Going On With All The Closings In Hoboken? Local Experts Weigh In

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As the summer wears on, it’s becoming more and more heartbreaking {+ concerning} that so many small — and even chain — brick-and-mortar businesses are closing around Hoboken and the surrounding areas. Since so many of our readers {and Team HG} were concerned, we decided to do a little digging and questioning, asking some local leaders about why they think these closings are happening.

To be fair, anyone doing their research will realize these instances aren’t specific to Hoboken. Retailers around the country have been closing store after store due to technology + apps increasing the ability to digitally order and deliver items in all categories. Food delivery apps like Seamless and GrubHub have increased exponentially, with 14.46 million active diners in 2017.

Here are a few chains that have closed stores in the last year, according to Forbes:

Payless ShoeSource – 400 stores
JC Penney – 138 stores
Macy’s – 68 stores
Sears and K Mart – 150 stores
HH Gregg – 88 stores
Abercrombie & Fitch – 60 stores
Guess – 60 stores
The Limited – 250 stores
Wet Seal – 171 stores
American Apparel – 110 stores
BCBG – 120 stores
GameStop – 150 stores
Radio Shack – 550 stores
Staples – 70 stores
CVS – 70 stores

In Hoboken, we’ve had a variety of local closings and closure announcments in the last few months — from Battaglias to Hotel Victor to Turtle Club to Townhouse Shops to Aetheter Game Cafe and more — which although feel like an exponential amount, are not out of the ordinary for the ebbs and flows of businesses, but the nature of the brick-and-mortar retail market across the country.

On the Root Causes of Business Closings

hoboken gourmet company

Locally, there is much discussion regarding the root causes of business closings.

Some residents and business owners cite issues:

1. Paucity of parking
2. Washington Street redesign {and potholes/construction}
3. Lack of diversity in business categories: too many similar competing businesses and chain stores coming in
4. Skyrocketing commercial rents
5. Online/digital purchasing

“It’s happening to retail across the board, and not just in Hoboken,” a NJ rep for real estate company C.B. Richard Ellis shared with HG exclusively. “Commercial real estate rentals are experiencing a decline across the board in both New Jersey and New York, let alone the rest of the country.” In fact, in Wayne, NJ, a suburban town about 30 minutes outside of Hoboken, there’s a similar scenario. The New York Times profiles the area as having a variety of retail vacancies and turnovers in the recent years.

And landlords raising rents have two differing plans of action in gentrified areas, according to the rep for CBRE — with Hoboken being a perfect example, as well as emerging neighborhoods throughout Brooklyn and Queens. “Landlord philosophies and practices generally fall into one of two categories: those who seek the highest rent and thereby take on the most risk —i.e. the greater likelihood of vacancy, tenant turnover, periods of no rent flows, and those who practice a ‘rental restraint’ — charging something less than the maximum market rent in order to keep a reliable paying tenant of good character and thereby reducing the landlord’s risk.”

Taryn Byron, a real estate agent for Nest Seekers in Hoboken, attributes it to several of the above factors. “There are many reasons that businesses are closing around town – construction on Washington Street, increased rent for retail space, stricter business regulations and changes in the way we as consumers have been doing business over the last 3-5 years. Amazon, for example, has changed our buying and ordering habits. When you can get same day delivery, you are less inclined to go to a brick and mortar to shop.”

When asked about the spike in business closings in Hoboken, Mayor Bhalla responded, “I have not seen any empirical data to support the assumption [about a spike in business closings] in this question. Needless to say, however, it’s sad to see businesses close in Hoboken, especially ones that have been around for decades, and there’s not one single factor.” The mayor attributes rising rent prices, online sales, and changes in popular trends hitting businesses hard. “But at the same time, we’re not seeing an abnormally high rate of closures. The market is cyclical. Stores, restaurants, salons, and other businesses are opening all the time in Hoboken, and that’s heartening to see.”

See More: Hoboken Gourmet Company Closes Its Doors After 23 Years

These sentiments were echoed by several others, including Hoboken resident and business owner Mario Fini, of Maridian Properties, who noted that it’s difficult to figure out the root cause of closings. “Business in general has so many factors that you can attribute success or failure to. It’s hard to say any one reason why businesses have closed.”

Gregory Dell’Aquila, President of the JDA Group and Vice Chairperson of Hudson County Chamber of Commerce, articulates a combo of rents and the nature of owning a business in general as the root causes. “Opening a business is not for the faint of heart. You will always have issues that you face as a business opening. Change in the economy, change in trends, etc. I think that the Washington Street Redesign Project and the neglect of paving due to the impending project had a direct and indirect impact to the amount of people going to Washington Street to patron the stores. With higher rents margins are tighter to open a store on Washington street. Add online shopping impact, Washington street construction, Hoboken not having a good brand for attracting outsiders to shop and dine and its a recipe for failure.”

Local boutique owner Jeanna Palumbo, of Alba Boutique {an upscale women’s clothing store that now has three locations in NJ} describes similar sentiments for her colleagues. “There are always different reasons, but the obvious constant construction, road closures and unpaved streets were likely the most major factors for businesses that were already strained. It is also crucial to really identify who your market is, especially in such a diverse town. Without that, in a town that is dependent on local shoppers, you lose the pulse on the market and it is difficult to keep up,” she explains.

Councilman Mike DeFusco worries about local businesses fleeing Hoboken to neighboring Jersey City, citing “dated 1980’s zoning and municipal [Hoboken] bureaucracy which puts undue and often insurmountable costs on small businesses.” He also blamed what he described as the city’s predatory parking enforcement. “[It] scares away visitors and residents, [and now] folks are investing their hard-earned money outside of Hoboken.”

Chris Mazzola, Director of Development at Bijou Properties, notes that Hoboken is experiencing the effects of a wider fundamental shift in the way consumers shop, eat, and play. “The proliferation of immediate delivery services offered by the e-commerce marketplace and food delivery apps has led to a convenience factor that brick-and-mortar businesses have had a difficult time competing with. Retail businesses that can offer an in-person “experience” are bucking this trend.” He cites The Gravity Vault Rock Climbing Gym as proof that the interactive business model is helping some brick-and-mortar shops avoid their demise.

How Hoboken is Supporting Small Business

empire coffee hoboken

The City of Hoboken reports to HG that it is currently developing an overhaul of the business section of the City’s website to make it a “one-stop shop” to open a business — compiling information from several different departments that business owners interact with. “Once complete, it will guide people step by step through the process of opening a business in Hoboken from beginning to end, with information detailing which permits are needed for which type of business, and other pertinent information,” explained Mayor Bhalla. He detailed the Business Leaders Roundtable, convening leaders of multi-million dollar corporations, among others, that have chosen to call Hoboken their home, to identify innovative ways in which these stakeholders can partner with the City.

The mayor also shared his plans for the creation of a Special Improvement District, “which gathers a diverse collection of business owners in Hoboken to form a Steering Committee to develop this concept, which will provide businesses with a greater measure of self-determination in terms of where investments should be made to improve business conditions in Hoboken.” He notes the Hilton Hotel — with its conference capacity — as a positive for Hoboken, “attracting trade conferences, weddings, and other large-scale events that draw visitors” into our Mile Square. He also attests that the City supports events such as Propelify, La Liga International Soccer Tournament, and other Hoboken Pride festivities that bring visitors to town.

Chris Mazzola emphasized creating the SID {Special Improvement District} in Hoboken as an effective way to energize and enhance Hoboken’s business environment “to maximize consumer engagement through collaborative alliances with businesses, government and community and to create a place where small businesses desire to be and thrive. If implemented successfully, we can expect a beautiful, art-filled, safe, accessible and prosperous business district which attracts residents and visitors to shop, eat, play, and stay in Hoboken.”

“I would love to see Hoboken get more involved in supporting all of our local businesses,” Palumbo notes. “They have all of the resources to promote, drive traffic & make our downtown stronger. I also have stores in Ridgewood & Summit, and both towns promote us through social media & “Town Highlights” e-mail campaigns, town wide events such as “Small Business Nights,” semi-annual Sidewalk Sales and free garage parking when you show a local business receipt. All have proven to be very successful and I know Hoboken could benefit from more support as well. I also love the entire HobokenGirl team because their endless support is incredible. They have become such a important resource for Hoboken as they are constantly and genuinely encouraging residents to support local. I find new gems in town through the HG Instagram all the time, and I know other residents do the same.” {Editor’s note: We’re blushing!}

“I would love to see Hoboken get more involved in supporting all of our local businesses. They have all of the resources to promote, drive traffic & make our downtown stronger.” ~ Jeanna Palumbo, Alba Boutique

Councilman DeFusco is moving forward with a plan to update zoning on 1st Street and 14th Street, in an effort, he says, to help small businesses open more easily, “while creating a vibrant and livable corridor connecting mass transportation hubs with the west side of town.” He also outlined a plan to activate Warrington Plaza {by the train station — a hub for 60,000+ daily commuters} creating an outdoor European-style plaza “where kiosks housing small businesses can thrive, steps away from the terminal. Think the green market at Union Square, the holiday market at Bryant Park or even Brooklyn’s Smorgasbord!” DeFusco shared with HG that he is a staunch advocate for a northern redevelopment plan above 14th Street which would effectively invite in tech startups, urban wineries and microbreweries to the area.

How can residents help local businesses?

Frans deli closes hoboken jersey mikes

While we are curating a list of businesses that you can shop locally {and feature small businesses on the regular}, we’ll let these local leaders and business owners share their thoughts on how to help:

“Residents can shop local. Yes, giant corporations have made online or big-box store shopping a convenient one-stop experience. However, instead of going online to buy a new outfit, check out one of Hoboken’s boutiques. Instead of dinner in New York, consider a Hoboken restaurant. If you have to look online, try websites like Jet.com, which is based in Hoboken and employs Hoboken residents. Those residents, in turn, are a customer base for local businesses.” ~ Mayor Bhalla

“Support local businesses. The businesses as well as the residents are what makes a community. Businesses need to give back more.” ~ Mario Fini, Maridian Properties

“When shopping locally, if you spend $100 – $68 stays within our community, while a big box store keeps $43 in the community.” ~ Taryn Byron, Nest Seekers International

“Residents can shop locally whenever possible! When shopping locally, if you spend $100 – $68 stays within our community, while a big box store keeps $43 in the community. Most small business owners are local residents with families and small business is 250% more likely to donate to local charities than big biz.” ~Taryn Byron, Nest Seekers International

“Try to buy one thing a week in Hoboken and not on Amazon; and, push your local elected officials to think outside the box! We all need to get out of our comfort zones if we want to help small businesses succeed in Hoboken.” ~ Councilman Mike DeFusco

“I think continuing to tell residents that supporting the local economy is fundamental is a nice idea, but have the right stores, marketing, and overall environment and the residents don’t need to be ‘told to shop local’.” ~ Greg Dell’Aquila, JDA Group LLC

“Hoboken offers anything you could need right here, so why leave? Hoboken is made is up incredible mom & pop owned businesses like boutiques, doctors, food markets, restaurants, pharmacies, toy stores and more. We always encourage people to keep shopping in town, so take a walk down Washington St. before heading online or to the mall. I thank all of my clients for shopping locally when they’re at register, because I truly appreciate them. Get to know the owners of local stores and you will see our passion for our businesses, making our clients happy and the commitment we put into keep our businesses alive & thriving.” ~ Jeanna Palumbo, Alba Boutique

“The Washington Street revitalization project is almost complete and the end result will be an enhanced, walkable and bikeable main street that encourages shopping.” ~ Chris Mazzola, Bijou Properties

A Positive Outlook

This article and circumstances may appear dire, but there is hope to be found. According to the New York Times4th quarter retail earnings are said to be looking up, and July retail earnings are up 6.4% from last year at this time.

Palumbo talks of the positivity of many local businesses having been here for over a decade being “inspiring and incredible in any market,” and forging ahead. “Small business in Hoboken is still very much alive and I am excited to see what our new neighbors bring into town.  We are working on another local project to fill a void in the market too, so stay tuned,” she excitedly shares.

Mayor Bhalla shares his thoughts for the future as well, noting that it’s always disappointing when a business closes, but he’s been to many ribbon cuttings and new/expanding businesses in the Mile Square this year. “Shaka Bowl recently opened a second location on Washington Street. Whole Fresh Market, a grocery store, opened up in southwest Hoboken. We see salons, coffee shops, Pilates studios open up in Hoboken, but these aren’t happening in a vacuum. These new businesses are able to open their doors because the local community supports them. I’m personally reassured by residents’ enthusiasm and their support of small businesses.”

The Washington Street redesign, although taking forever and a day, appears to be promising, according to Mazzola. “Future development should prioritize pedestrians and bicyclists over cars specifically as it relates to on- and off-street parking requirements, he explains, discussing a street or sidewalk designed to promote social interaction, physical activity, and spontaneity will encourage people to get out, about, and ultimately get shopping locally.

The view of the future can still be seen as centering around Washington Street as the epicenter of Hoboken commerce. “Washington Street will always be the heart of Hoboken,” Byron feels. “New businesses will be coming. There is always a cycle and change can bring fresh ideas and opportunities.”

Our final thoughts:

When you love a restaurant — actually go and support it, regularly! Shop at a local grocery store; buy your meat from the local butcher; work out at a locally-owned gym; stop for coffee at a family-owned shop. Go to Hoboken’s own Mile Square Theatre, and support events and local charities in their quests to support the community. These are all easy ways we can help keep businesses and create a sense of community in our terrific town. While there’s no surefire solution, we’re hopeful that this sheds a bit of light on the current state of affairs: Hoboken versus the national picture of retail, and the ways that we can help. Remember to shop locally as much as possible. Together, we can truly support and maintain a vibrant community.

Please note: We reached out to many more local experts for comments, but some emails went unanswered.

We included all that were received and had helpful information to share.


Stay tuned for a comprehensive list of brick-and-mortar businesses to support in Hoboken, coming to the blog VERY soon. Follow us on Instagram for more!

 


Written by:

Jen is the founder and Editor-in-Chief of Hoboken Girl. She started the site to discover and share the wealth of things happening in Hudson County. Her roots in the area extend to her maternal grandparents, who owned two textile factories in Weehawken and North Bergen. When not planning the next Hoboken Girl event/volunteer project or editing her life away, she can usually be found shopping at local boutiques, eating an Insta-worthy meal, walking her French bulldog + rescue pup, or watching the latest murder doc on Netflix with her husband.