Can the Auto-Repair Sector Survive the Jerome Ave. Rezoning?

Surrounded by stacks of black, dusty tires, 56-year-old Bronx resident Francisco Moran has about two months to leave the property where his tire and auto repair shop America Tires has been located for the last 18 years on Jerome Avenue in the Bronx—a move he feels was precipitated by a city rezoning plan.

The rezoning on Jerome Avenue, approved by the City Council in March, is part of the de Blasio administration’s effort to create and preserve an estimated 300,000 units of affordable housing by 2026. The city has rezoned three other neighborhoods, has proposed a rezoning in Inwood and is considering seeking zoning changes in five other areas.

The Jerome rezoning covers a two-mile long stretch along Jerome Avenue and its east-west commercial corridors in Bronx Community Districts 4, 5 and 7. The plan is expected to create an estimated 3,250 affordable homes in the 92-block area, with an emphasis on permanently affordable housing under the city’s Mandatory Inclusionary Housing program (MIH).

The plan also includes $189 million for improving parkland, enhancing pedestrian safety under the elevated subway tracks, creating two 458-seat elementary schools and launching a pilot program under an anti-harassment bill, to prevent landlords from pushing out tenants.

Also in the mix: A $1.5 million grant for retraining and relocating displaced businesses including the auto repair shops.

In New York City, the auto-repair industry exists in clusters such as Atlantic Avenue in Brooklyn and Jerome Avenue, where businesses rely on each other to draw a client base and offer price competition, creating jobs and increasing traffic for other neighboring business.

Along Jerome, property owners who currently have auto businesses on their land are expected to capitalize on new zoning to develop residential property instead, displacing the auto firms.

Jerome Avenue houses an estimated 200 auto-repair related businesses that employ hundreds of local residents and almost 89 percent of those business have a one year commercial lease or no lease at all, according to Pedro Estevez, the president and founder of the United Auto Merchants Association. City Planning documents estimate that 43 auto shops and 45 non-auto-related businesses would be displaced but Estevez said those projections are low.

Attention is now focused on how effective the city’s proposals for protecting that industry—namely, the creation of “retention zones” within the rezoning area where zoning rules friendly to auto uses have been retained, and the $1.5 million relocation grant—will be.

According to Moran, two years ago—when the Jerome Avenue rezoning was being considered—his then-landlord refused to renew his lease and asked for payments to be made in cash. When the property was sold to Manhattan-based developer Atlantic Development Group (in May, according to the city’s database), Moran said the new property owners gave him two months to move out.

Despite Moran knowing the move would eventually happen once his former landlord did not renew the lease — he did not realize or prepare for it be so soon.

“I thought it was going to take five or seven years,” he said. “I don’t know what I will do now.”

“We are terrified,” he added. “Where are we are gonna go? ”

Moran said he reached out to the city for legal help but was told that his options were limited since he did not have a lease. City Limits contacted both the current and former property owners several times but did not receive a reply by press time.

Estevez, president of United Auto Merchants Association, says that other shops were a similar predicament, “The city can expect more situations like this,” he says. “It’s like a tsunami and all the families that will be affected by the this.”

The challenges facing the auto-repair sector are not confined to Jerome Avenue. A 2017 Pratt Center for Community Development report said some of the obstacles faced by the industry included competition from higher-paying uses in commercial and manufacturing zones such as restaurants and self-storage, the existence of few options for accommodating a relocation of one business and even fewer for a group of businesses, and landlords who do not possess the proper Certificate of Occupancy, which essentially put the auto repair shop at risk for city fines.

Adam Friedman, the Executive Director at the Pratt Center for Community Development, says the space constraints facing the industry are compounded each time a market shift, rezoning or city development project forces auto businesses out of one area. “It gets harder each time because the total amount of land keeps shrinking,” he says. “The amount of space is almost always significantly reduced.”

“Zoning is seen as a win-lose situation,” Friedman says. “We should be trying to figure out a win-win situation and work to mitigate the negative impacts.”

In Queens section of Willets Point, the city used eminent domain under the Bloomberg administration to move the business for a shopping mall project that never came to fruition. Currently, the De Blasio administration plans on using the area to develop affordable housing and retail business. Forty-five of the auto body shops in Willets Point were relocated to a communal warehouse, known as the Sunrise Cooperative, in Hunts Point after receiving over $7 million in relocation funds from the city. Last year, the cooperative filed for bankruptcy saying that the move from Willets Point hurt their businesses.

Estevez recalls the fate of the Willet Points shops as a nightmare. He is worried of a repeat on Jerome Avenue, where he credits the industry with helping to stabilize a neighborhood. “When this was nothing, just charcoal – these businesses helped this area flourish.”

Employment in the auto repair industry does provide decent wages, according to the state’s Department of Labor. The average annual wage for auto occupations across the city is an estimated $44,000 which is twice as much as an employee in the restaurant or retail business would earn.

However, some Jerome Avenue community members supported elements of the rezoning that would encourage the auto industry to move, citing poor environmental compliance by the auto firms and threats to health and safety created by the presence of repair shops in a residential area.

Other community members and business owners in the Jerome Avenue area voiced their concerns about the auto-shops’ survival to city officials during a forum last year. The concerns prompted City Council Members Vanessa Gibson and Fernando Cabrera to push for additional services for the auto repair shops that included grants for training and certification for current employees, relocating expenses and expanding retention zones carved out in the rezoning footprint to preserve some of the auto repair shops.

The city did accommodate many of the requests made through the community and businesses to help preserve and/or relocate the auto repair industry except for additional funding for relocation and expanding of the retention zone. The current retention zones, between 180th and 168th streets, will preserve up to 40 businesses which will save an estimated 27 percent of the industry, according to the Estevez.

In the past, the city has worked with small businesses and cluster industries through different programs. One such program that aged out under Bloomberg administration, the Industrial Retention Relocation, program had developers pay a fee towards a city fund that helped to relocate a business. One program that carried over into the current administration is the Relocation and Employment Assistance Program (REAP) through the Department of Finance which allows business income tax credits for relocating jobs from outside of New York City or below 96th Street in Manhattan to designated locations above 96th Street in Manhattan or in one of the other four boroughs, according to its website. But that wouldn’t apply to the Jerome Avenue firms.

For Jerome Avenue, the city’s Department of Small Business Services has made efforts to compensate the auto body shops that will relocate to another area. At a recent budget hearing at City Hall, SBS Commissioner Gregg Bishop said $1.5 million will be allocated for the Jerome Avenue Business Grant program for businesses operating in the neighborhood at the time of the rezoning. Qualifying firms will have a business use that is non-compliant as a direct result of the rezoning and evidence of eligible relocation expenses incurred for reimbursement, according to the City Council’s approved proposal. Additionally, SBS will work with other city agencies to provide an array of services including language and immigration services; lease negotiations and legal clinics; access to capital for business and compliance needs; and training in technical skills through local academic institutions.

Estevez said the funds to relocate were much less when compared to the monies allocated during the relocation of the auto body repair shops in Willets Point. He said there are dozens of more auto body shops like Moran’s that do not have leases and will have to move from Jerome Avenue.

Tom Angotti, professor for Hunter College in Urban Policy and Planning, said the threat to auto-repair shops mirrors a larger risk to small businesses. “This is going on all over the city,” he says.

“Commercial tenants have no protection and it results in displacement of mom and pop shops. These shops are replaced with chain stores that sell the same thing.” After all, Angotti notes, “There is no commercial rent control.”

Gibson is working on legislation known as the Commercial and Auto Repair Stability Act (CARS) which originally required landlords to disclose the certificate of occupancy, tax liens and fines on the property before entering a lease. This would help a business to avoid shutting down due to issues of fines or inappropriate certificates of occupancy. However, a spokesperson for Gibson says, “There is some concern the [proposal] is overly broad and we’re looking at refining it.”

In the meantime, Moran must decide to either shut down his business that employs three people or find another space within two months.