Haggling on his cell phone with Citibank over exorbitant fees, straddling a pile of bills, and helping customers all at the same time, David Ramnauth holds court outside his parents’ hardware store He constantly nods hello, and gets patted on the shoulder by men walking past. Ramnauth seems to know everyone on Bedford-Stuyvesant’s Fulton Street.

With good reason: he’s been working in the area since 1979. His parents now own the building and store e stands in front of, and his brother owns Rose, a beauty supply business down the street, right next door to a health food store that a Ramnauth cousin runs.

Ramnauth’s family didn’t always have so much real estate. When they started out, they were licensed street vendors, selling fragrances and costume jewelry. (“It was the disco era, so we sold big pearls and medallions,” he recalls.) By juggling street sales, college and his mother’s office cleaning job for over two decades–one Ramnauth would watch the tables while the others were occupied–they built three small businesses and began investing time, money and love into the neighborhood. Now, they are vendors, residents, customers, shopkeepers, building owners and small business operators, all in one family. “We were in the right place at the right time,” says Ramnauth.

Yet the Ramnauths aren’t reaping many benefits these days. Rents are up on Fulton Street, but business is down–way down. And according to Ramnauth and scores of other small merchants o Fulton’s main commercial strip, it’s plummeting because of a measure that was intended to help local merchants: getting street vendors off the sidewalks of Fulton Street.

In May of 2001, the city, using police on horseback and in helicopters, and with metal barricades and special task force teams, removed all street vendors–whether they were licensed or not–from Fulton Street. As with most vendor crackdowns, the city was responding to complaints from residents, commuters and real estate groups to Brooklyn’s Community Board 3. According to District Manager Lewis Watkins, local business owners wanted the vendors out too, but were too afraid to come forward. “Store owners complained under their breath–we were getting a lot of complaints from people who never had a face,” says Watkins. Then-City Councilmember Annette Robinson lobbied hard for the vendors’ removal, which was implemented as part of a $3 million Brooklyn Chamber of Commerce and city Department of Business Services revitalization project called Fulton First.

But on Fulton Street, it’s difficult to find a single retailer who will acknowledge supporting the campaign for the vendors’ eviction. Shop owners satisfied with the outcome are just as scarce. When the crush of vendors along Fulton Street’ sidewalks was swept away, Ramnauth estimates, “all businesses out here lost 20 percent” of their sales. The street vendors, it turns out, were one strand in the web of relationships that snared customers and sustained Fulton Street.

In interviews up and down the strip–from Bedford to New York avenues–almost all small merchants say the same thing. While a few shop owners report that removal of the vendors did not affect their profits one way or another–“I’m not waiting for vendors to bring us business, says record store owner Charlie Rawlston–even they have to admit that business did not improve. And it’s not just the crashing economy, they say. The majority date the local slump to the vendors’ removal, after which business “instantly dropped,” contends Roberto Mader, who has worked on Fulton Street for seven years. Then, he adds, “9/11 finished it off.” Over and over, vendors and merchants alike mutter phrases like “Just look,” gesturing with a wave of the hand to point out the obvious: deserted streets, abandoned storefronts, empty marketplaces.

Inside the narrow Rose beauty store, Ramnauth’s niece Tina, a cherubic 17-year old, lists benefits that vendors brought to the area, and, in turn, to her parents’ corner store: variety, crowds, liveliness, an music that “made you feel wanted, like you belong. Caribbean people like to have some music to bop their heads to,” she explains, herself of Guyanese and Indian descent. Without the vendors, says Tina, “it’s just dead.”

Outside, Tina’s mother Rose notes that “zero visibility” restrictions have also limited their ability to pay their $6,000 rent every month. Enforced at the same time as vending crackdowns, these city regulations, which prohibit shops from cluttering street sightlines by displaying their wares outside, have the same goal: pristine, merchandise-free sidewalks.

Yet most stores along Fulton Street put inventory outside–in a way, becoming vendors themselves–even though they risk fines of up to $1,000. Sitting in the midst of her T-shirts and handkerchiefs, Rose explains: “If you have high rent and no foot traffic, $800 feels like $8,000. If I didn’t do this, I couldn’t pay the rent.” Visible goods–whether a vendor’s or the store’s–equal sales.

While some merchants still think vendors constitute unfair competition, others see them as threads of the same commercial web. Mader has worked for seven years in a store that sells everything you would expect to see at vendors’ tables: hats, scarves, beaded sandals, trinkets, bags, and more. But business didn’t improve with vendors out of the way. In fact, when they were out on the sidewalks en masse, “I wouldn’t be sitting down on a Saturday,” says 27-year-old Mader from his tiny chair. A few doors away, his mother, Pamela, a Trinidadian vendor of incense, had drawn up petitions in support of vendors remaining on the street, giving them to then-Councilmember Robinson. Now, her son’s store is losing out.

“They made a big mistake for everyone,” says Cobra, an aspiring photographer who works in a small photo and gift shop on Fulton Street, close to Nostrand, the epicenter of the Bedford-Stuyvesant shopping strip. “Fulton Street is not what it used to be,” sighs the 23-year-old philosophically. “Ask anyone.”

Across the street from Cobra, in a housewares tore literally stuffed to the rafters with towels, sheets, curtains, and other home goods, an attractive, quiet man estimates that without the vendors in front of the shop, they’re losing $400 per day, $700 a day on Saturdays. They had to lay off one staff member, and those who remain work fewer shifts. (Because most of them were violating vending or zero visibility laws, vendors and many merchants were afraid to give City Limits full or even first names.)

It wasn’t just sales that deteriorated, either. Two weeks after vendors were removed, says Pamela, an old lady was mugged of $200 at the bus stop across the street. While some people say crime was worse with the crowds and the vendors, Tina says, “If somebody was in trouble, they’d be the first ones there–even before the cops.”

“Before, you couldn’t have stolen something and gotten more than two feet,” before being caught, says Cobra. “Everyone looked out for each other. Now, everyone looks out for themselves.”

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While the vitality street vendors offer might seem as obvious as the desolation their absence brings, other merchants and businesses often fail to see it until the vendors are gone. Many storefront retailers believe the vendors, with their proximity to customers, have an unfair competitive advantage–especially if they’re selling the same product.

“Why should somebody be allowed to peddle on the street when my merchants can’t even put out their own stuff?” demands Jack Katz, president of the Flatbush Business Improvement District, which succeeded in getting vendors off Flatbush Avenue. “They were breaking the law being in the street. It was not kosher.”

Fred Hooke, head of the city Department of Business Services’ Vendor Micro Enterprise Initiative, which coordinates enforcement of vending laws and helps set up alternative vending sites, also finds illegal street vending hard to defend. While the city caps the number of vending permits, issuing 3,000 food licenses and 83 general vending licenses, Hooke’s agency estimates that about 17,000 people are vending without permits or licenses. Hooke and others cite a range of egregious behavior, from leaving garbage and causing congestion to hawking stolen or bootlegged goods. It’s a false notion that these streets need vendors, that stores will suffer” without them, he says. “Study after study has shown that vendors constitute a public hazard. There’s no doubt about that.”

Yet serious market analysis, studies, or surveys are conducted before sweeping vendors off the streets. (Asked to cite particular studies, Hooke could not name one.) Rather, city officials usually make the decision after meetings with local business and community groups. “When it’s done, there’s no market analysis that supports it,” says Mark Winston Griffith, executive director of the Central Brooklyn Partnership (and a City Limits board member), which is a partner in Fulton First. “It’s just based on sensibility and aesthetic and class-based resentment toward a certain kind of people.”

Steve Balkin did one of the few studies on the topic. An economist at Roosevelt University in Chicago, Balkin studied the destruction of that city’s famed vendor market on Maxwell Street. Since 1912, pushcarts crammed he sidewalks and lanes of Maxwell Street, especially on Sundays, when over 1,000 vendors congregated. Known the world over, the market served low-income residents, mostly African-American, as well as a multi-ethnic mix of people from throughout the city. well-known hangout for blues musicians, Maxwell Street is often called the birthplace of the electric blues, since musicians had to amp up their sound to be heard over the commercial din.

Over the years, the vendors thrived, even as the neighborhood fell into disrepair. Then, in the early 1990s, the nearby University of Illinois at Chicago decided to expand student housing to Maxwell Street. Balkin and others initially welcomed the idea, believing it would revitalize the area. But in 1994, the university decided the Maxwell Street vendors had to go, prompting outrage from Chicagoans and from urbanists the world round. As the university closed the market with the city’s help, Balkin and two fellow researchers tried to estimate the impact.

What they found as intriguing. As soon as the peddlers and street vendors moved out–even before the university began to demolish surrounding buildings–the local merchants’ business dropped. “People were coming there for the vibrancy of the street life,” explains Balkin “not to buy hats and suits.”

In a cost-benefit analysis, they calculated that monetary loss to users of the market–including lost income to vendors and their relocation expenses, and lost shoppers’ savings–would be $35.2 million over a projected seven year period.

When they factored in indirect losses–from vendors no longer spending their money in their area; by local wholesalers from whom vendors had bought goods; and from money not being spent at other neighborhood businesses, because even regular hoppers went elsewhere once the vendors were gone–the removal of the vendors represented a loss of almost $50 million (about equal to the subsidy the university received to move into the space).

Balkin’s study put a dollar value on what the Fulton Street merchants learned on the job: Street vending, even if it’s illegal, obeys basic economic laws. A competitive market that benefits some or all participants and harms none has reached a state called Pareto optima–in short, a win-win situation. And whether or not well-meaning officials and community representatives realize it, it’s often what you find on streets where vendors thrive.

“What the store doesn’t have, the vendors will,” notes an employee at the housewares store on Fulton Street. Often pedestrians would stop to browse a vendor’s goods, she says, and “turn around and see something they like in the store”–a statement echoed almost verbatim by Cobra and other shopkeepers. Ramnauth agrees. “Any time you have choices,” he says, “you get more business”

As businesses cluster together in the same geographic space, their profits tend to rise–even if they’re selling the same product. Economists call it the agglomeration principle, and it’s why several competing department stores will all be located at the same mall.

That street vending helps local merchants is “almost textbook” economics, agrees Margaret Crawford, a professor of urban design and planning at Harvard University’s Graduate School of Design. Like Balkin, she believes that street vendors crate “natural markets,” identifying consumer demand and filling it. (Crawford jokingly adds that when city planners regulate vendors, it’s usually because they “have to make work for themselves.”)

Another scholar who has studied street vendors’ relationship to the surrounding formal economy is University of Nebraska-Lincoln urban anthropologist John Gaber. After nine months of field research, Gaber found that illegal vendors on Manhattan’s 14th Street provide a “positive synergistic contribution” to local merchants by selling complementary goods and creating a distinctive environment for shopping.

It’s not just academics who think vendors uplift neighborhoods. “There is strong anecdotal evidence to suggest that a vibrant vending community is particularly important in low-income neighborhoods, where any means of entering the formal economy can make the difference between a life of hope and one of desperation,” says Chip Mellor, president of the conservative, anti-regulatory Institute for Justice think tank i Washington, D.C.

In Chicago, the vendors on Maxwell Street attracted defenders from the opposite extreme of the ideological spectrum: “It’s a sad day in America,” chuckles Balkin, “when the Maoist Revolutionary Communist Party has to defend free enterprise.”

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As freshman council member for Lower Manhattan, Alan Gerson’s fiery baptism into city politics includes deciding what to do about the growing souks in Soho, Chinatown and especially around Ground Zero. Yawning at the end of a long day, Gerson suggests a three-pronged approach to vending: Identify the appropriate time, place and density for sidewalk vending; work with vendors on-site to address sanitation or noise complaints; and develop something he calls a “vendor benevolent society.” And if that fails, consider putting them in a marketplace.

When law enforcement crackdowns promoting “quality of life” targeted street vendors in the mid-1990s, the city’s Department of Business Services (DBS) came up with a plan to incubate the entrepreneurial dreams of vendors who were swept off the sidewalks. In consultation with several other city agencies, DBS set up “alternative markets” in previously vacant, usually city-owned lots in Harlem, Bed-Stuy, Flatbush and Washington Heights. As Chinatown’s business suffers in the wake of September 11, Manhattan’s Community Board 3 is proposing to move some vendors into an alternative lot, and DBS has signed on to help.

To business groups, the markets are an ideal solution. “I think the city’s done something practical and intelligent in its approach to vending,” says Kenneth Adams, the amiable president of the Brooklyn Chamber of Commerce. “If there’s a lot of illegal vending on a commercial street, ad you want to enforce legislation, you’ve got to give them somewhere to go!”

The markets are set up by a unit of DBS called the Vendor Micro Enterprise Division, which gets most of its $515,000-a year-budget from federal block grants for community economic development. Once the markets are established, local nonprofits take over day-to-day management and offer vendors classes in business, accounting, English and computer skills.

But for many vendors, the markets are not a popular option. While they fare better in some than in others–some vendors praise Flatbush’s well-managed market, but others have gone belly-up in Harlem’s–they all make less money than they would on the sidewalk.

Even those who manage them agree that the markets are more successful at assuaging community complaints than at generating revenue. “We were in support of vendors remaining on the street,” says Griffith, whose Central Brooklyn Partnership oversees the Bed-Stuy market. “I thought it added a flavor and a vibrancy. It made me feel at home. But we were offered lemons, and so we had to make lemonade.”

For Crawford, “the marketplace thing is a problem. It appears to be a way of legitimating vending but is actually a way of eliminating it, because they make such stringent rules.” Having studied vending extensively in Los Angeles and currently in Florence, Italy, she concludes, “I’m personally against the marketplaces.”

But perhaps there are other options. Vendors and their advocates, politicos, planners, and academics suggest a vast unexplored middle ground for resolving the vendor conundrum. Marketing guru Paco Underhill lauds urban markets, but says planners should take design lessons from “festival marketplaces” like Boston’s Faneuil Hall, designed by James Rouse to resemble urban streetscapes–complete with vendors, of course. Kenneth Adams proposes revamping vending regulations, which are so confusing they’re hard to enforce (some vendors, for example, are allowed to set up over street grates, while others aren’t). Balkin suggests a day tax on a sliding scale to combat what he calls “a big freaker-outer”–the fact that illegal vendors don’t pay taxes. Sean Basinski, coordinator of the Urban Justice Center’s Street Vendor Project, which organizes and provides free legal services t vendors, thinks the city should simply issue more licenses.

Jaya, who goes by just her first name, hawks handcrafted jewelry in Soho, where local merchants and residents are pushing aggressively for more enforcement against vendors–even legal ones. (Recently, many Soho vendors have started carrying video cameras and tape recorders to ward off illegal seizure of goods by police.)

Cute, calm and extremely diplomatic, Jaya’s got alternatives in mind. Vendors could “roll with it,” she says, in reference to pushcarts allowed in other cities. And she finds Cleveland’s day licenses and New Jersey’s assigned spots interesting alternatives worth looking into in New York. Most importantly, though, Jaya believes vendors need to go to community board meetings and tell their side of the story to residents and merchants.

And small shops, says Jaya, need to rethink their relationships to vendors. Having peddled in all five boroughs, she cautions that retailers and residents who want vendors removed should be careful what they ask for. “I worked in each one of those areas where [vendors] were taken away, and watched those businesses lose money,” she says. “We bring them business. They’re not thinking about that.”