Volume 74, Number 37 | January 19 -25, 2005

Villager photo by Elisabeth Robert

Ernie and Margaret Rossi at their gift shop at Grand and Mulberry Sts. Because of a rent increase, the store is moving to another spot on the block.

In Little Italy, high rents replace handshake deals

By Amanda Kludt

In what many residents and business owners see as a great loss to the community, some of Little Italy’s oldest restaurants and shops on Mulberry St. are closing their doors or changing owners. Paolucci’s restaurant, established in 1947, went out of business last Friday, and E. Rossi & Co., an Italian gift shop located on the corner of Mulberry and Grand Sts. since 1936, will be relocating on Jan. 31. Two other businesses, The Big Cigar Company and Little Italy Gift Shop, will be closing, and the restaurant Luna is rumored to be changing owners.

Paolucci’s, E. Rossi & Co., and the cigar and gift shops had to close or leave their current locations because of rising rent costs. A real estate group, John Anthony Group Inc., recently bought five buildings on Mulberry St., including those housing the four above establishments. “The building that I’m in has been sold,” said Ernest Rossi, co-owner of E. Rossi & Co. with his father, Luigi. Now he says he is paying six times what he was paying before in rent. “What I’m paying now, they could get more, but I don’t think it should be this high,” Rossi said.

According to Robert Ianniello, president of the Little Italy Merchants’ Association and owner of one of Little Italy’s landmark restaurants, Umberto’s Clam House, the businesses were paying relatively low rents before the buildings were purchased. “They weren’t being charged market rates before, and now they are.”

Danny Paolucci, owner of Paolucci’s, wasn’t as forgiving. He said his rent went from $3,500 a month to $20,000. He said he was hoping to buy the building from his old landlord when she sold, but she sold it to “three strangers” instead.

Two years ago, when the new landlords came in, Paolucci received a 30-day notice to vacate the premises. According to Paolucci, he started planning for a new restaurant in Staten Island and brought the new landlords to court over a disputed lease. Now that the new restaurant is ready to open, he decided it was time to end the court proceedings and finally close the restaurant on Mulberry St.

Paolucci said the final closing on Friday ended emotionally. “It was rough when we took our sign down. My father was with me. He told me to think of my family. He’s dying inside and he’s trying to keep me calm,” he said.

As Paolucci’s moves to Staten Island, E. Rossi & Co. will move right next door into the two spots left open by the departing cigar shop and gift shop. “I hate to give up this corner,” commented Rossi, whose family has been in business since 1910. However Rossi did note that he’s happy he could work out a deal with the new landlords to relocate.

Issues with new landlords coupled with the loss of old-time establishments appear to be a growing concern in Little Italy. Sal Cangelosi, owner of Sal’s Barber Shop on Grand St., said that as the older landlords sell their properties or give them to their children, business practices change. According to Cangelosi, a lot of businesses, his shop included, have never had to sign a lease and would make rent agreements with a handshake. Now the landlords are more business minded.

Lillian Tozzi, a lifetime Little Italy resident, said that landlords are charging more now because Little Italy has become a tourist attraction. “The new landlords have come in and realized that these businesses are popular and not paying much rent. Now that Little Italy is a tourist attraction they’ve found a gimmick, a way of making fast money,” she said.

However, Tozzi noted, it is not just landlords raising rents that force the businesses to close. “In reality, the new businesses have pushed the old mom-and-pop businesses out. The new Little Italy is geared more toward tourism and a carnival atmosphere,” she said. According to Tozzi, the whole neighborhood has changed from quaint and close-knit to commercial, and this change has made new businesses very successful and forced older ones out.

In other changes, Luna restaurant, currently closed for renovations, may soon be switching hands. The family owns the building, so the change has nothing to do with rising rent. The restaurant has been in the family for over 100 years and, according to Ianniello, the family was just getting tired of running it. “They are looking to get out,” he said. Everything will remain the same, including the menu, name and location. The family could not be reached to comment.

As far as the vacancies are concerned, Ianniello said he knew for certain that an Italian restaurant would be replacing one of the departing businesses. As the president of the merchants’ association, he places a great deal of importance on keeping the culture of the neighborhood intact. Ianniello said he already had sent a letter to the landlords urging them to keep “the flavor of the neighborhood.”

However, the fact that the new businesses are Italian will not assuage the concerns of many locals. For residents like Tozzi, keeping the old businesses is the priority. “To lose businesses that are close to 100 years old is a travesty,” she remarked.

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