GUILIANI PLAN: ROOM FOR BOTH SMALL AND SUPER-SIZED STORES

Byline: Don Kaplan

NEW YORK — If his rezoning plan gets passed, Mayor Rudolph W. Giuliani said up to 50 new superstores could eventually operate in the city and that small stores won’t get crushed by the competition.
Last month, the mayor unveiled a plan allowing retailers up to 200,000 square feet in size to move into areas now zoned for manufacturing. The plan would also eliminate commercial real estate and other taxes affecting small businesses, and the mayor is proposing to dispose of the tax on apparel under $100.
Small retailers and some politicians oppose the rezoning, but the mayor maintained during an interview last week that superstores would bring more traffic to their areas.
“The net effect would actually help the development of more small stores in the city,” he said. “There’s a certain amount of fear and worry on the part of some small businesses. But I met with some and I think they understand that first of all, we’re very flexible and we’re willing to look at their concerns and try to add things to the program that would specifically help small businesses.
“We’re removing the commercial rent tax from almost all of the small retailers in the city,” Giuliani said, “so [small retailers] are not going to have the burden of paying the commercial rent tax, which should help their margin of profit. We’re also going to be reducing the unincorporated business tax as well as a whole group of things that are being done to try to first stabilize, and then expand small business.
“Although there is a certain amount of doubt about this among small businesses, when they look at the studies that have been done and actually see that small businesses have been helped by the development of the larger stores, they begin to understand how this would help. “Small businesses really don’t have much to fear here.”
The mayor said city residents spend about $3 billion annually shopping in suburban stores and that his plan could recapture much of that volume. “We lose so much business to surrounding areas that if we can recapture a billion or a billion and a half dollars, not only would the large stores profit from it, but a lot of that business would go to the smaller stores just by the nature of things.”
The action could speed the arrival of such stores as Wal-Mart and Price Club/Costco, which could open mammoth units in such areas as SoHo, west Harlem, Long Island City in Queens and Sunset Park in Brooklyn. Sears, Roebuck, Caldor, Bradlees and Kmart have also expressed interest in expanding in the city.
Monroe Milstein, chairman and chief executive officer of Burlington Coat Factory, which has one store in Manhattan, said he would welcome the competition from superstores.
However, Milstein said, “If [Giuliani] really believed that apparel is a basic commodity that people need, then the tax should be lifted on all apparel sales, not just those for under $100.”
Sy Syms, chairman of Syms Corp. said a tax cut on all apparel would make it “a little bit of a hassle to go to New Jersey.”
The mayor said it could be at least a year before any part of the plan could go into effect. Even before it goes before the City Council and the City Planning Commission, the administration must conduct an environmental impact study mandated by the state.