Change Comes to the ‘Un-Hampton’

By the time the owner of Harbor Books, Taylor Rose Berry, posted a Facebook message a few weeks ago announcing that her store on Main Street in Sag Harbor would be closing in February, the news that yet another village business was shutting no longer felt like an isolated incident.

What once looked like just the usual churn in the cyclical commercial life of any town’s business district now has various stakeholders in Sag Harbor — local merchants, residents, and activists alike — voicing the same concerns. Something more overarching — and perhaps damaging, in the grand scheme of things — is going on in Sag Harbor, a village that has long prided itself on being the “un-Hampton,” a place that had long avoided the march of corporate takeovers, seasonal pop-ups, and vacant storefronts that began blighting East Hampton and Southampton years ago.

People are now asking how long Sag Harbor’s Main Street can remain a three-block throwback dominated by individually owned businesses and locals who have a personal stake in the year-round vibrancy of the village. 

If the cost of business becomes too high, the fear is that only businesses backed by corporate muscle will be able to compete. And Sag Harbor’s unique character will be lost. By last week, Ms. Berry was well into her liquidation efforts, and one wall of shelves was already barren of books.

“I think people are very concerned that we are reaching a tipping point here,” said Ms. Berry, who opened her shop in November 2014. “Nobody likes to see stores closing, or stores with the windows covered with brown paper and signs saying ‘See you next spring.’ And the thing is, when you look at the common denominator for why all of these businesses here have closed in the last two years or so, the theme has always been the same: The rent is too high.”

Sag Harbor’s Main Street has long been the heartbeat of the village, but in the past two years alone it’s lost mainstays such as La Superica, Lee Jewelers, and Conca D’Oro, a family-run restaurant that sold its lease to what is now Sag Pizza, ending a four-decade run. Black Swan Antiques recently downsized, and part of its space is now occupied by the Grenning Gallery, which moved from nearby Washington Street. At the northern tip of town, Espresso closed and remains vacant in the same building where La Superica sits empty.

Country Lane and Adornments, two more independently owned stores, shut down in the last two months after Donald Zucker, who already owned the Main Street building where Addo, Grindstone Coffee, and Provisions are housed, bought a key parcel of land via his company, Manhattan Skyline Management. (Addo has been empty since last year, as Mr. Zucker holds fast on his asking rent price.)

Mr. Zucker’s new package of properties was originally listed for $11.995 million and stretches from Main Street to Division Street along Washington. It includes seven retail spaces, two offices, and three apartments on the second floor, a single-family rental property, a building on Division Street that houses the Scarlet Rose Aveda Salon, and a vacant lot where a three-story structure could be legally built.

Some merchants predict the business district’s future could be dramatically redefined by how Mr. Zucker develops that corner of the village.

“We’re very concerned about the changes on Main Street,” said Gwen Waddington, who owns and runs the Wharf Shop with her mother, Nada Barry, who founded the toy store 50 years ago. “Because the real estate moguls who are purchasing these properties because they have extra cash to invest don’t have their heart in the village. They aren’t thinking forward to maintain the character of the village. I feel all they see is it’s an investment opportunity because Sag Harbor is, quote, ‘hot.’ ”

One byproduct, Ms. Waddington added, is “when I go as a Chamber member to some of these businesses that have popped up now and I ask them to get involved in one of our events, they say, ‘Oh. We have to contact corporate. I’m not sure. . . .’ People come to Sag Harbor for a unique experience and the personal nature of the shops.”

Lisa Field, an owner of the Sag Harbor Variety Store and president of the Sag Harbor Chamber of Commerce, stressed that some of the worrying about changes to Sag Harbor is human nature and ignores that “change doesn’t necessarily have to be a bad thing.”

Ms. Field, like Ms. Berry, also acknowledged that landlords have the right to charge whatever they like. “The landlords are not always the bad guys,” Ms. Field said. 

But at some point, she added, the needed synergy that Sag Harbor’s Main Street businesses have traditionally depended upon to survive risks being altered if the village’s businesses and landlords are operating with hugely disparate aims.

“Sag Harbor is a walking village,” Ms. Field said. “When stores are closed, it does hurt everybody. For the most part, our stores are year-round businesses. . . . That’s what you need for a thriving village. The more stores that are here, the more reason different people might come here.”

The community group Save Sag Harbor was started nearly a decade ago in response to precisely the sort of business pressures the town is feeling again now.

“We founded Save Sag Harbor when there were rumors that a major retail store wanted to buy the American Hotel, a bank wanted to take over another space on Main Street, and a major drug store wanted to take over the 7-Eleven,” Barbara Roberts, a village resident, expert on retail businesses, and one of the co-founders of the group, said. “If any of those things happened, it would have been the end of Sag Harbor.”

Save Sag Harbor was instrumental in defeating those attempts, in part by pushing for changes in village zoning laws and enforcement of new ones. Along the way, spinoff groups such as the Sag Harbor Partnership have risen up and found creative solutions to, for example, fund the reimagining and rebuilding of the Sag Harbor Cinema after it burned down.

Canio’s Books and Cultural Cafe, which lies a short walk outside Sag Harbor’s central business district, has survived since becoming an educational 501(c)(3) nonprofit in 2009. Ms. Waddington said the Wharf Shop would no longer be in business if her family and the other tenants hadn’t banded together in 1987 to buy their building and turn it into a condominium to better control their costs.

Numerous merchants have said finding creative solutions like those — and landlords not looking to maximize every dime — will be integral to maintaining what Sag Harbor has.

Maybe complementary businesses will have to co-share spaces on Main Street to cut costs. Maybe folks can explore building the sort of landlord-tenant partnership that has revitalized Bleecker Street in the West Village after even corporate tenants were priced out by sky-high rents. As The New York Times reported in a Dec. 4 story, Brookfield Properties, with the help of the creative strategy firm Skylight, targeted new tenants with online followings, then worked out short-term leases and revenue-share arrangements with them.

For now, though, the unbudging business reality in Sag Harbor is the push-pull over the rent, the rent, the rent.

“In the end, retail is all arithmetic,” said Lynda Sylvester, who has operated her Sylvester & Co. store for 30 years and partially rebranded it as “Modern General” not long ago, adding the web address returntomainstreet.com.

Ms. Sylvester says her businessman father frequently told her as a kid that retail is “double jeopardy” because entrepreneurs gamble that they can sell the merchandise they buy at the price they need to get, and they are also gambling that customers will materialize to buy it. 

“But operating a store in a village like this is triple jeopardy, because here you have only 108 days to pay for your entire year,” Ms. Sylvester said, referring to the Memorial Day to Labor Day crush.

Ms. Sylvester said a general rule of thumb in retail is if you are paying more than 8 percent of your annual gross sales in rent, “You can’t make a living. Anything more than 8 percent, you’re probably working for the man — the landlord that’s charging you the rent.”

Now look at the math for Harbor Books: Ms. Berry said she is paying “in the high teens” — somewhere beyond $15,000 a month — for her 2,200-square-foot space. She’s also responsible for repairs to the building’s heat and air-conditioning systems. There have been incorrect reports that she and her landlord worked out a new lease after he offered to freeze her rent the first three years once she said she was leaving. But, Ms. Berry said, even then her rent still would have been “unsustainable.” 

In year four, she said, the cost would have crept “beyond $20,000 a month, give or take.”

Using Ms. Sylvester’s rent-to-gross-sales formula of 8 percent, that means Harbor Books would have had to gross $200,000 a month to afford its current rent.

That’s a lot of books to sell. Especially when the price of books — unlike a $16 glass of wine or $18 cocktail or $45 rib-eye — can’t be adjusted at will.

And so Ms. Berry will keep looking for a new home. She isn’t willing to concede Harbor Books is done.

“As personally devastating as this has been, I’m very grateful for the abundance of love and support the community has shown me,” she said. “Sag Harbor is a magical place. If there’s a silver lining in any of this for me, it’s that we’ve been part of sparking a discussion about what kind of town and community we want to be.”