Holding her ground: they huffed and puffed, but developers could not blow down Edith Younger-Huff's business.
Younger-Huff was stunned, "I was preparing to sit there on that corner for the long haul," she says. But that was before the city decided that the block, which housed her salon and several other businesses, was a good candidate for redevelopment because of its prime location in the retail corridor.
When a city secures a developer to revitalize a neighborhood, widen a street, or build a park, there's often not much renters or landowners can do. They can take a buyout package and get out of the way of the bulldozers, or wait for the city to condemn their properly and force them out. But 59-year-old Younger-Huff wasn't going to give up easily. She had invested too much--sweat, tears, and money--to grow A Cut Above into a $240,000-a-year salon. She wasn't simply going to walk away from it. So the entrepreneur and former public affairs executive launched a marketing campaign to save her business. She relied heavily on networking and local publicity. And she held her ground.
READY TO RUMBLE?
Only six months earlier, she had spent nearly $50,000 to completely remodel her salon. "Hair salons are not real high-profit businesses and I had just gone into debt to refurnish my place, improve electrical wiring, and make other upgrades," explains Younger-Huff. According to Terri Winston, publisher of Salon Sense magazine, a beauty trade publication, the average salon generates $250,000 a year and makes about a 7% profit.
"The worst part was not knowing what was going to happen, or where we were going to move to, or what was even available to us in terms of resources the developers had to offer," recounts Younger-Huff. "That was the year my daughter was coming out of high school and I had to plan for her to go to college. I couldn't be out of work."
Along with all the responsibilities and pressures that come with running a business, Younger-Huff now had to contend with another challenge: developers. Starting in the 1970s, many urban areas nationwide began redevelopment projects, also called revitalization or gentrification (depending on which side of the debate you fall). Working-class neighborhoods were transformed into meccas for young urban professionals, and small businesses and low-income residents either left or were driven out by high rents and property taxes. New Brunswick city records show that since 1970, 50% of all businesses entitled to relocation assistance because of redevelopment have opted for a "going-out-of-business" payment. Younger-Huff had been renting the prime corner space--329 George Street--in downtown New Brunswick since 1986.
Because Younger-Huff rented, rather than owned, she had limited negotiating power, says Christopher Paladino, president of the New Brunswick Development Corp., the company in charge of the redevelopment project.
Just one month after the reporter told Younger-Huff that her salon would be demolished, revenues plummeted. "In November 1996, monthly revenues were down by about 6% ($1,200) compared with November 1995," says Younger Huff. "Employees started to leave because they thought we were going to be closed down. The lack of confidence really hurt."
Feeling betrayed and financially unstable, the entrepreneur started a campaign to save her business. She wrote state and local legislators and then-governor Christine Todd Whitman; and she called everyone from the local media to her pastor.
According to Younger-Huff, the local newspaper constantly quoted her on the issue. And the salon's 10th anniversary celebration even got front-page coverage in the town's major daily newspaper, the Home News Tribune. Yet the press coverage seemed to have little or no effect. Redevelopment, it seemed, would progress. But Younger-Huff resolved not to leave until she had a fair deal or was physically forced out, "They can't just move you and put you out of business. The city has to come to a settlement with you first," explains Younger-Huff, who says she ignored letters about the planned demolition.
By January 1997, however, she and the remaining business owners on the block seemed to be losing the fight. Four property owners had already sold their buildings to developers and relocated for what she considered to be a fraction of their businesses' worth. Younger-Huff said she witnessed one store owner get a relocation check for $25,000, just half of what she had spent to update her shop.
TURNING UP THE HEAT
So Younger-Huff went into action. She haunted city council meetings and kept writing letters throughout February and March 1997. She personally delivered a message to the prospective new tenant, University of Medicine and Dentistry of New Jersey. "I left a note for a member of the UMDNJ board and said 'I'm going to fight you all the way. You are trying to take my livelihood; I can't let you do that.'" UMDNJ didn't respond.
This might seem like an extreme measure, but to Younger-Huff, the shop and its location were her lifeline. A single parent raising a daughter, she had left corporate life behind in 1986, heeding the entrepreneurial call. Without a cosmetology license or a stitch of hair care experience. Younger-Huff mortgaged her home, paid $50,000 for the purchase of A Cut Above, and signed a lease with the building's owner. "I wouldn't advise anyone to buy a beauty parlor unless they were buying the building," advises Younger-Huff in retrospect. "I ended up buying nothing--old furniture and one little customer who got his hair colored and cut once a month."
But she did get one valuable thing with the purchase: the corner location. "I got a lot of walk-ins and by the end of the first year, we had built [a clientele]," she says. In one year, A Cut Above had four stylists on staff and Younger-Huff had started studying to get her cosmetology license in order to generate additional revenue. "By the third year, the shop reached profitability, and the 1990s were really booming," she says. The shop had grown from four stylists to eight, and monthly revenues were as high as $25,000.
But by the spring of 1997, Younger-Huff was uncertain of her future on that same corner. Demolition had begun on neighboring buildings, and Younger-Huff knew the developers were becoming less patient as the July construction date drew nearer. The area around her salon was beginning to look like a war zone: Dust lingered in the air, bulldozers droned constantly, and metal fences and yellow tape marked off "danger" zones. Most of the street was blocked off to pedestrians, and customers were becoming scarce.
To retain her shrinking clientele, Younger-Huff reluctantly began scouting new locations. She had resigned herself to accepting a check that she'd negotiated with the developer for the deposit on a new place. Then her luck changed--for the better.
It turns out that an out-of-town client, Marilyn Ward Ford, was also an attorney. "I couldn't afford an attorney and Marilyn was not licensed to practice in New Jersey, so she helped me negotiate, but she wasn't technically practicing."
She offered Younger-Huff invaluable advice and support. "While [I was] sitting at the shampoo bowl, Edith would casually tell me things that were going on," recalls Ford, a law professor at Quinnipiac University School of Law in Connecticut. Ford decided to get involved and advise Younger-Huff in her negotiations.
Younger-Huffs public relations and marketing efforts had also started to pay off. "I got phone calls from people all over New Jersey telling me to make sure Ms. Huff was treated fairly," remembers developer Paladino.
Granted, some of the callers had only been to A Cut Above once or twice for a trim, but when your business is on the line, every hair counts. Rev. DeForest "Buster" Soaries' hairs may have counted twice. Rev. Soaries is the pastor of the 6,000-member First Baptist Church of Lincoln Gardens. Did his calls to Paladino make a difference? "Well, he was on my board of directors," says the developer.
Christy Davis also gave Paladino a buzz. A former colleague of Paladino's, Davis was state chief of staff for Sen. Frank Lautenberg (D-N.J.). "Knowing that I had some connections with public officials, Edith had reached out to me for advice," says Davis, an attorney who now heads a consulting firm in Newark, New Jersey.
The fact that many of the customers who called Paladino lived at least 30 miles away was also important, says Paladino: It emphasized A Cut Above's value to the community. "Here is someone who is running a hair salon that caters to the city like a theater would; people actually traveled there to get their hair done, and perhaps afterward might stay for dinner or lunch," explains Paladino.
A SWEET DEAL
With only two months to construction, the city and the developers suddenly had a change of heart and began to negotiate with the entrepreneur. Rather than move Younger-Huffs salon to another location (an old carpet store that had no bathroom or heat and would require about $200,000 in reconstruction), they eventually decided it made better business sense to rebuild A Cut Above at its original location.
Things were finally moving in Younger Huffs favor, but she still needed to work during the year while the new building was being built. "Within two weeks, we had a nice settlement," says Younger-Huff. The agreement (she cannot disclose the amount) included storage for A Cut Above's new furniture and equipment, and temporary relocation to an old salon near the local train station. The temporary salon was completely outfitted with curling stations, mirrors, and the rest of the hair salon--at the developer's expense. The agreement also arranged for Younger-Huff to continue paying the same rent she paid at the original location, which was about 10% less a month than the market rent at the new, temporary space.
The developer absorbed all moving expenses, and Younger-Huff didn't miss a beat. Despite this victory, business was not the same. "We moved the end of July, and in August 1997, our revenues for the month were $13,500," says Younger-Huff, whose August 1996 revenues were $20,000.
To retain customers, Younger-Huff mailed postcards to the 10,000 clients in her computerized database, notifying them of the move. She also paid the phone company $40 each month to maintain her old phone number and forward calls to the new location.
BACK ON THE BLOCK
In 1998, A Cut Above moved into tire corporate plaza, but revenues have not bounced back to the glory days of $20,000 per month, says Younger-Huff "When we moved back, it was still the pits," she says. "We are now on the back of the building, but the selling point to that is that we have a parking lot." By the time Younger-Huff was offered a space in the new plaza, there were no spaces available in the front.
A total of 17 businesses were relocated to make way for the corporate plaza, which, in addition to UMDNJ, houses three restaurants, a GNC store, and, because of smart dealing, A Cut Above salon. Younger-Huff is the only one of the original businesses to return to the now-upscale corner.
Fast forward to 2004. It has been nearly six years and the shop's revenues are still sluggish (averaging $15,000 per month), but Younger-Huff embraces the experience. "It wasn't a bad thing. I learned a lot about negotiating, about business, and about looking after myself. And at the end of the day, I'm still in business."
Edith Younger-Huff learned her lessons about redevelopment firsthand, and to some extent, she learned those lessons the hard way. Because she was a renter rather than a property owner, some of her options were limited in her fight to keep her business. But whether you rent or own your business' location, you still have some leeway in relocation Negotiations
Before developers can condemn a property, they must have consent from a governing body, such as the city council or a city redevelopment agency, says attorney Elnardo Webster II, a partner at Booker, Rabinowitz, Trenk, Lubetkin, Tully, DiPasquale & Webster in West Orange, New Jersey. "It is public information," says Webster, whose concentration is government affairs, land use and zoning, and real estate and leasing issues.
To prevent the shock that Younger-Huff experienced, Webster advises small-business owners to visit their planning board office and ask to see the city's master plan for their neighborhood. He also points out that had Younger-Huff been the property owner, she would not have been surprised.
According to Webster, under New Jersey law, "Renters are not entitled to business loss and they usually get only moving expenses paid." To safeguard against this, Webster advises small-business owners to make sure that the language in their lease is clear "about how much condemnation money you are entitled to from the landlord in the event the property is condemned for redevelopment."
As a renter, Younger-Huff felt adequately compensated, but Webster warns, "That was a deal she got because [she had] local community leverage, not because of legal leverage." Christopher Paladino, president of New Brunswick Development Corp., echoes this sentiment: "In a standard commercial lease, the lease is voided in the event of condemnation, so renters have no rights except state-mandated relocation expenses. But we often go far beyond what the statute requires."
WEBSTER ADVISES TAKING THESE STEPS IF YOU ARE FACED WITH THE PROSPECT OF LOSING YOUR BUSINESS LOCATION BECAUSE OF REDEVELOPMENT:
* Gather a group of other businesses being affected and sign petitions or make objections known at city council meetings.
* Write letters and call your local politicians to gain their support.
* Hire your own appraiser and make an economic argument based on the value of the property.
* Reflect your business' true value on tax returns. If you don't count tips, or your real sales are not reflected in taxes, it will be hard to prove your business' worth.
* Understand the soft possibilities or the elasticity of the discretionary pool. The legalities offer hard, cut-and-dry options--i.e. a renter is only entitled to moving expenses. However, Webster explains that a developer will often bend on items other than the actual cash settlement check. These may include rent subsidy at another property owned by the developer or a lease at the new building once it's built, similar to Younger-Huff's settlement.
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|Title Annotation:||A Year In The Life|
|Author:||Spruell, Sakina P.|
|Date:||Mar 1, 2004|
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