The Spectrum

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How financial hardship is bringing some New York City families closer together

Darren Cargill works 40 hours a week handing out fliers on a sweltering Manhattan street corner for the Working Families Party.

 It’s his way to help his family survive the recession.

“My mom raised me and my twin brother alone,” Cargill, 19, said. “I have this job so I could help my mom.” His mother raised the two boys on a teacher’s salary and the family barely scraped by. Now that he’s older, Cargill is determined to earn money and share the responsibility.

For many New York City family households, there is an upside to the economic downturn: it’s bringing them closer together. With finances getting tighter in New York City households, many teens, such as Cargill, are appreciating the hard work and sacrifices of their parents. What’s more, as more people lose jobs, families are more reluctant to spend money, which leaves them more free time with each other.

In the last year, things got so bad financially for Cargill’s family, his mother had to choose between paying the rent and feeding their family. That’s when he went out and found a job. “When you don’t have money, family are the only people you can turn to,” he says.

Before the recession, Nzingha Prescod, 16, used to eat out apart from her mother and sister at least once a week.  These days, though, the Brooklyn family is more likely to cook at home. “Instead of going out to dinner with friends and spending like, $30 a night, I stay home and eat what my mom cooks and just have a good time with my family,” Prescod said.

Before the recession, Prescod added, she did not think much about spending her mother’s money. But ever since the real estate downturn, her mother, a real estate broker, has been struggling to make commissions. “I appreciate the money now,” Prescod said. “She works hard for it.”

In some cases, the recession brings older and younger generations together, as it did in Brooklyn teenager Zach Sano’s family.

Sano’s grandfather moved in with him and his mother a year ago because of financial difficulties. His elderly grandfather could no longer afford his rent.

Sano, 16, said having his grandfather around has been a big change. Before that, Sano saw his grandfather about once a year. Nowadays, he is a constant in their lives. “Having him around is cool,” Sano said. “He’s around when I need a guy to talk to.”

However, they do occasionally fight over the bathroom, Sano admitted, laughing. “We clash sometimes, but we wouldn’t be this close if he hadn’t moved in,” he said.

Cargill, for his part, says the financial hardship his family has been through has brought them closer. He feels that the closeness that has developed between him and his family will last. “Personally, my family’s a lot tighter now,” he said. “That’s not going to change.”

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The owner of Pan Latin Café hopes a community focus will help save her business

On a recent Thursday afternoon near the peak of lunch hour, Elizabeth Fernandez of the Battery Park City Ballet School Day Camp and her troupe of seven and eight year-olds walked into Pan Latin Café.

While many restaurateurs would have groaned at the thought of serving a pack of rambunctious children, within a few minutes, Pan Latin owner and chef Sandy Kraehling seated the group, baked some Latin American cookies, pulled some ‘dulce de leche’ ice cream from the freezer and began to teach the children how to make ice-cream sandwiches with a Pan Latin twist. “It requires time, energy, and materials, but this is how we give back to the community,” Kraehling said. “It’s not in our best financial interest, but we do it.”

Pan Latin Café has been a fixture in the Battery Park City community since 2004. Located at the corner of Chambers Street and River Terrace, the café, which offers an assortment of sweet and savory breads and traditional Latin American food, has a cozy feel. An ambience of warm oranges, reds, and yellows color the backdrop as soft rock and the sounds of many conversations set a relaxing mood. But now, in the wake of the recession, the neighborhood oasis is struggling to keep its doors open.

Last year, Pan Latin Café, located close to the financial district in downtown Manhattan, lost many of its loyal financial industry customers, who were no longer able to afford rent in the area and moved out. This summer, unseasonably cool weather, coupled with competition from a nearby Whole Foods, has caused sales at Pan Latin to fall about 35 percent compared to the same period last year, Kraehling said.

To make matters worse, the New York State Department of Taxation and Finance came knocking in July, demanding payment of back taxes. On July 2, the department padlocked the café. “We’re taking from Peter and paying Paul,” Kraehling said, citing mounting bills related to payroll, maintenance, rent and inventory. “New York State didn’t want to hear about that, so they came here and locked us up.”

The closure was especially devastating for Pan Latin since the July 4 weekend is traditionally a very profitable one. This year, the Macy’s Fourth of July Fireworks display was moved to the Hudson River, promising to attract even more customers.

After spending two days working with her husband on the Pan Latin budget and having extensive conversations with the New York State Department of Taxation and Finance, Kraehling put together enough money to gain a temporary reprieve just in time for the Fourth of July. “We had a good weekend. We put our American flags up,” she said. “But it’s only temporary. Pretty much what we’ve got right now is a very small Band-aid on a very big wound.”

Matteo Battistini, a junior at nearby Stuyvesant High School, is a regular at the café. “I can’t believe that the store might close,” he said. “It’s such a big part of the community. I can’t even imagine what it would be like without Pan Latin on the corner.”

Indeed, the café is actively involved in the Stuyvesant community, and has donated platters of food for various school events. Pan Latin also holds bread-making classes for first grade students of neighboring P.S. 89 and sponsors events such as Run for Knowledge and the Silent Auction Raffle.

“The café is really involved with the children’s education,” said Erica Barish, a resident of Battery Park City who has an infant daughter. “That’s one of the reasons why I come here.”

To build loyalty and encourage repeat business, the café allows customers to pay for meals the next day when they are running low on cash. “If people come here, give foot traffic, and support this, we can stay open,” Kraehling said. “But if our community, or part of it, is not coming in, we have less chance of surviving.”

Pan Latin’s personal touch appeals to Battery Park City resident Gina Ma. “I love that it’s independently owned,” she said. “It would be a shame if this place became another Chipotle.”

Building relationships with customers like Ma is the key to Pan Latin’s survival, Kraehling said. “When you run a business without many layers and it’s just you in front of your customers, people take that to heart and you become a fixture,” she said. “I don’t believe that this is the end of the road for Pan Latin.”

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The recession has added a new wrinkle to the college decision process

Most students agonize over which college to attend. But for Kaitlyn O’Hagan, the decision to enroll at Hunter College instead of Boston College or New York University was easy to make.

That’s because O’Hagan’s father recently was laid off, and Hunter College, one of the 23 institutions under the umbrella of the City University of New York, offered her a full scholarship to its Macauley Honors program. “We weren’t sure what kind of situation we were going to be in for the next few years,” the 17-year-old Stuvyesant High School graduate said.

For students like O’Hagan, the recession has added a new wrinkle to the college decision process. With national unemployment rates now at 9.5 percent and the economy continuing to struggle, families have been forced to cut back on spending. As a result, many students this year declined admission to pricey private universities, favoring less expensive state or city schools.

Tuition at private four-year colleges has increased by an average of 6.4 percent in the past year, due, in part, to declining enrollment and endowments, according to the College Board. The change has had a positive effect on city and state universities. For example, the number of applicants to the City University of New York, which costs just $4,600 per semester, has increased by about 13 percent compared to last year, according to Clare Pistey, CUNY’s director of recruitment.  “It’s a good value, and has a very good reputation, an excellent faculty and numerous opportunities,” Pistey said.

CUNY has been working hard to boost its reputation during the past few years. In 2001, it launched the Macaulay Honors program at seven of its four-year colleges to attract top high school students from around the city. The program includes free tuition, a laptop computer, $7,500 study abroad stipend that can also be used for unpaid internships, and a cultural passport, which allows students to attend cultural institutions for free or discounted rates.

Those perks appealed to O’Hagan, whose financial aid offered by NYU and Boston College was based upon her family’s income before her father had been laid off. Even with financial aid, the total annual cost for NYU came to $35,000, and for Boston College, $30,000. “I wasn’t getting enough money to really make my parents feel comfortable with paying so much for college when my dad’s work situation is so uncertain,” O’Hagan said.

Katie Freeman faced a similar situation. The Brooklyn Technical High School graduate was forced to turn down her first choice, Rensselaer Polytechnic Institute, which granted her early admission, because of the economic recession. “I was given several scholarships, but it wasn’t enough,” said Freeman, 18. Instead, she plans on attending the honors program at the State University of New York at Buffalo in the fall. She will pay $12,000 a semester at the state school compared to roughly $26,000 a semester at Rensselear.

In some cases, the calculations used to determine financial aid fail to take an applicants’ full financial picture into account. Amanda Yuan, a graduate of the Bronx High School of Science, ran into that problem this year after the company where her father worked was acquired and he was forced to liquidate his shares in the business. The liquidation gave him a one-time spike in income, drastically reducing Yuan’s financial aid packages.

According to Yuan, who filled out a financial-aid calculator, the amount of grant money she would have received for Williams College and Amherst College—had the corporate takeover not occurred—was more than $30,000. Cornell would have theoretically given her $20,000. But due to the income spike, the aid was insufficient.

Instead of heading north to Amherst or Williams, she decided to attend The Cooper Union for the Advancement of Science and Art, a New York City school that offers free merit scholarships to all of its students. “Those other colleges would’ve been really expensive,” Yuan said. “I didn’t really want to make my parents pay $60,000.”

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Despite the recession, hair salons are enjoying a spike in business

Joann Terrelong has been getting her hair cut at Astor Hair in the East Village for 18 years. The Bronx resident stops by the discount salon, located in the basement of a building near the busy corner of Astor Place and Broadway, every three or four months for a cut and the occasional highlight.

Terrelong patronized fancier salons when she was younger, but now she doesn’t see much point to plunking down a small fortune for a haircut. “You pay more for the name, and they don’t give you a good style,” she said. “Who doesn’t want to save money?”

Although many people are fighting the temptation to buy new clothes or eat out during the recession, one treat they’re less likely to give up is a good haircut. Hair salons, barbershops, nail salons and skin care providers experienced a 4.5 percent increase in sales in the last 12 months, according to Sageworks, a retail consulting and research firm in Raleigh, N.C. Low-price salons, in particular, seem to be reaping the benefits.

Mundo Rivera, 31, of Astoria, Queens, has been going to the same barber at Astor Hair for 15 years and the recession has not kept him away. The main reason is the salon’s prices. A haircut starts at just $14. “The rates keep me coming back,” he said.

Angela Ranieri, the manager of a Supercuts salon in the East Village, said business is on the rise. Business “has gone up for the most part,” she said, adding that the stylists at the salon bring in their own clientele.

Despite a steady stream of customers, the salon has cut back on some unnecessary expenses, said Ranieri, who sports short platinum blonde hair highlighted by a wide patch of pink bangs. “The holiday party is gone,” she said.

Haim Hazan, director of Lifestyle hair salon near Union Square, said that beauty shops are “recession-proof” because New Yorkers like to pamper themselves. “We have clients from Brooklyn, Queens, New Jersey, Uptown, Midtown, and, of course, all of the students around,” he said. 

Hazan is hoping to encourage repeat business by rolling out more specials. His salon is currently offering first-time male clients and walk-in customers a hair wash and cut for $28. For women, the price is $40.

Of course, good customer service is just as important as affordable prices. Hazan’s salon has a warm and friendly vibe. Even first-time customers are welcomed like regulars. “Hello, beautiful. How may I help you?” is a typical greeting from one stylist.

Back at Astor Hair in the East Village, the barber chairs were filled on a recent Saturday afternoon. The buzz of clippers and the hum of blow driers echoed through the shop.

John Vezza, who owns Astor Hair with his father and his brother, said the salon is seeing more foot traffic than last year. “I see a lot of new faces, a lot of new clients lately,” he said. “And once they come in, we make sure we do the best work possible to keep them coming back.”

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Downtown merchants join forces to keep business alive

One Tuesday afternoon in July, merchants and community activists gathered over salad, pizza and lemonade to hash over an issue foremost in their minds: saving the Lower East Side’s mom-and-pop businesses.

 The people at the meeting, hosted by the Lower East Side Business Improvement District, threw out all kinds of ideas to help merchants struggling in the recession. They suggested closing neighborhood streets once a week to cars, extending hours and even selling products online.

 “Foot traffic has always been a problem, even before the recession, and now it’s compounded,” said Roberto Ragone, executive director of the Lower East Side Business Improvement District.

 Indeed, the storefront vacancy rate in Manhattan is now at an estimated 6.5 percent, the highest level since the early 1990s, according to a recent report by Marcus & Millichap Research Services, a real estate investment services firm in Encino, Calif. That has prompted entrepreneurs and community groups to look for ways to attract customers.

 The East Village is home to small, independent entrepreneurs, such as ethnic restaurants, bookstores and bargain clothing shops. The community has mostly kept large retailers out.

 These days, however, more For Sale and For Rent signs are showing up on storefronts. The need is more urgent because the neighborhood is listed as one of America’s Most Endangered Places, according to the National Trust for Historic Preservation.

 The goal now for many owners and workers is to simply stay in business.  Grace Choi, an employee at Fancy Cleaners on 14^th Street, once owned her own dry cleaning business for seven years. But she was forced to close her store last fall when the economy soured.

 Jane Martinez, who runs East Village Grooming and Dog Daycare near Stuyvesant Town, said the recession has had a noticeable effect on her store. “People still come, just not as often,” Martinez said. To supplement her income, she takes in animals from Earth Angels, an animal rescue group that works outside a Petco pet store near her business.

 Soojin Pai, who operates East Village Fruits and Vegetables, survives by using a tried and true business method. “I work hard, sell basic foods and get fresh products. I deal nicely with customers,” Pai said.

 Elvie’s Turo –Turo, a restaurant that specializes in Filipino cuisine, is surviving while many other restaurants in the area closing down. Owner Carla Cinco said the key to her success is appealing to a wide ethnic market by offering traditional Filipino fare, such as salted duck eggs, alongside chicken pattie empanadas and barbecue pork. “Being in the East Village, you have to open your audience,” said Cinco, who operates the business with her mother and sister.

 Other establishments have benefitted from online word of mouth. Jyoti Abdul, who runs Looks Threading Beauty Salon, said her store is seeing more business thanks to good reviews that customers post on Yelp.com.

 Several non-profit organizations, such as Two Bridges and the Lower East Side Business Improvement District, are working with merchants to make the neighborhood more appealing to shoppers. They collect money from the stores to pay for landscaping, eliminating graffiti and picking up trash. “The Lower East Side used to be the best place to be for Sunday shopping and bargain shopping and it’s not that anymore,” Ragone says. “The challenge now is how to bring people here during the day.”