Low-Income Housing Association Plans Major Rent Hikes, La Sirena May Close

IMG_2995Stephen Rex Brown Dina Leor’s Mexican memorabilia store, La Sirena, may have to move due to a 30-percent rent increase.

A low-income housing association in the East Village is planning substantial rent hikes for its commercial tenants — a move that has already forced the Mexican trinket shop La Sirena to notify its customers that it will close.

Cooper Square Mutual Housing Association’s executive director Val Orselli explained that the rent increases will pay for $400,000-worth of renovations to some of its 25 buildings over the next couple of years. The Association’s tenants include familiar names like the 4th Street Food Co-op, East Village Music Store, Rivington Guitars, Bond Street Chocolate, and FAB Café. As many as 24 will face rent hikes once their leases expire.

“We tried as much as possible to use our reserve funds, instead of increasing the rents of the tenants through big increases that tenants cannot afford,” said Mr. Orselli. “So either the cost has to be borne by residential tenants, who are very low-income, or the commercial tenants.”

“We don’t have a choice,” he added.

The owner of La Sirena, Dina Leor, faces a rent increase of around 30 percent, according to Tower Brokerage president Bob Perl, who will be negotiating the new lease. “Their mission is to have affordable housing,” he said of the Association. “The board has decided to make good use of the retail values in the area.”

But that was little comfort to Ms. Leor, who was floored by the substantial increase in rent. Previously, she had discussed an increase of 10 percent of her current lease, which is around $1,600 a month. A 30-percent hike would put her over $2,000 a month — still well below market-rate. “In that regard, they’re being very fair,” Mr. Perl said.

IMG_2998Stephen Rex Brown An image of the Virgin of Guadalupe for sale in
La Sirena.

For Mr. Orselli, the choice came down to which of his tenants have the most money to spare.

Residential tenants have an average income of just $12,000, meaning even a substantial increase in rent would not yield significant revenue, he said. The Association has not renovated any of its buildings since 2005, and a June report from the Association’s maintenance manager made it clear that boilers needed to be replaced and roofs needed repair.

Mr. Orselli said that repairs to the buildings are urgently needed, meaning that the Association can’t accept rents as low as it once did. “The buildings were younger then,” he said.

For tenants who negotiated their leases recently, like Aromatherapy Bath and Body Oils, the increases are unlikely to make an impact for years.

None of that matters to Ms. Leor, who said her landlord was “pulling a fast one,” in an e-mail to customers. In the letter, she floated the possibility of moving to start up her long dreamed-of Mexican cultural center. During conversations, however, she backtracked several times regarding whether she will actually close.

For now she’s unloading discounted merchandise in preparation for a departure from the East Third Street store where she sells everything from colorful Mexican wrestling masks to sculptures of La Virgen de Guadalupe.

Mr. Perl, who was one of the now-closed Life Cafe’s landlords, said that he would try to convince her to stay, and would help her a find a new home if necessary.

But Ms. Leor said she was disturbed that she didn’t find out about the rent increase until, frustrated by weeks of silence from the Association, she walked into Tower Brokerage’s office to inquire about available storefronts (she was unaware at the time that the firm was representing her own space). Only then did Mr. Perl tell her what the housing association would be asking for her store. Earlier this week, he notified Ms. Leor in a letter that he would be negotiating her new lease, as he will with other commercial tenants in the Association’s buildings.

On Monday, Ms. Leor submitted a request to The Local’s Virtual Assignment Desk asking us to write about her plight. The tone of her proposed headline – “Local East Village shop has to move, rent increase over the top” – was dire, but Ms. Leor admitted that her fate hinges on official word about the severity of the rent hike.

“I’m just trying to be positive,” she said. “If this happens, and they say, ‘This is what they’re charging you,’ I can’t stay here,” she said. “My dream is to move on at this point.”