Why Many Flushing Restaurants Struggle to Stay Open

Mellie's Seafood Restaurant, like numerous other restaurants in Flushing, have closed (Photo by Shuhan Yu via World Journal)

Mellie’s Seafood Restaurant, like numerous other restaurants in Flushing, have closed (Photo by Shuhan Yu via World Journal)

Editor’s note: Flushing is known as a haven for Chinese food. The cuisines offered by Chinese restaurants there are more diverse and often less expensive than those in Chinatown. But the World Journal published two stories on May 29, pointing out that because of competition and high rent, restaurants in Flushing are facing tough challenges.

A story written by reporter Shuhan Yu found many Chinese restaurants in Flushing have been sold recently.

Rising rents and labor wages push up the costs. Meanwhile, profits keep sliding. These have placed many Chinese restaurants in Flushing in a difficult situation. Happy Buddha, a vegetarian restaurant that had been in operation for 20 years and the 7-year-old Mellie’s Seafood Restaurant closed right after each other. Dongbei Restaurant, which opened just half a year ago when the previous restaurant with a different name at the same location failed, and a buffet restaurant on Main Street, have both been sold as well. Maybe they need to consider some cold storage construction by Primus Builders. It might allow them to store more food thus allowing them to offer a wider range of dishes.

Dongbei closed for good a few days ago. The manager of the shopping mall where the restaurant was located said the restaurant and its predecessor, Incheon Seafood restaurant, belonged to the same owner. Both didn’t last long. Dongbei was sold to a new owner who is renovating. “If you cannot make $1,000 per day, how would your business be sustainable?” the manager said. Maybe using brilliant equipment similar to a Alta Refrigeration might bring costs down enough to make it more sustainable of a business. All restaurant businesses ought to invest in quality, speciality cooking equipment if they are to provide a premium dining service to their customers. Something like Nella Food Equipment will make a kitchen better equipped to succeed.

People working at nearby restaurants in the same building said they were surprised by the short lives of Incheon and Dongbei. They said the rent in the building is not too bad. And whether a restaurant can last mainly depends on the way it is managed.

Kenan Chen, owner of Maxin Cafe, said the opening of food courts at Fulton Square, New World Mall and the New York Food Court on Roosevelt Avenue have contributed to the decline of the restaurant industry in Flushing. “The food courts flooded the market with so many new restaurants and food stands and this becomes a nightmare to the food industry,” he said.

Chen said the rising rent makes things even worse. Many restaurants failed and were sold to new owners. The landlord is the only person who wins. As for the restaurant owners, Chen said they work very hard but what they make is not much higher than their employees. Those who are less lucky cannot even make back the original investments. “Incheon became Dongbei, then Dongbei becomes something else. This is a very cruel game. It is very hard to make a dollar, and very easy to lose it,” Chen said.

In his own case, Chen said he opened the first Maxin on 40th Road in 2003. Since then, he had been opening a new Maxin every three years and it became a chain with four shops in its heyday. But in 2014, for the first time, he had to close a shop partly because of the high rent.

James Chen, founder of Flushing Food, a website that helps restaurants to take orders and do home delivery, said several restaurants on Prince Street and 39th Avenue are considering moving out of Flushing. “Flushing is the most competitive neighborhood for restaurants,” said Chen. “The rent here is higher than that in the ordinary districts in Manhattan. But the price for the same dish is 40 percent lower. Also, when a restaurant is successful, the same type of restaurants will proliferate to heat up the competition.”

Chen said there is not one single culprit for the decline of the Flushing restaurant industry. Many reasons, including high costs, low profits, rising rent and the increase in the minimum wage contribute. Chen said one has to really think through before he or she decides to open a new restaurant in Flushing. But he said the old restaurants are facing even tougher challenges than the new ones because of their outdated way of management. He called for the restaurants to be aware of and be prepared for the crisis, update their business model, launch promotions on social media and start to accept online ordering and credit card payment to cater to young customers.

The restaurant has changed its name two times in a row. It is now being sold to another owner. (Photo by Shuhan Yu via World Journal)

The restaurant Dongbei has changed its name two times in a row. It is now being sold to another owner. The sign says it is “closed for renovation.” (Photo by Shuhan Yu via World Journal)

In another story, reporter Peter Chu took a closer look at the rent, which, as predicted by one community member, will drive more minority-run shops out of business soon.

“The [annual] rent for a restaurant in Flushing could be more than a million dollars. This is crazy,” said John Choe, the executive director of the Greater Flushing Chamber of Commerce. With more and more Chinese moving into the neighborhood, businesses vie to get shop space. This has made the rent here skyrocket. Choe predicted within the next five years, 15 percent of minority-run businesses here will go belly up. Peter Tu, executive director of the Flushing Chinese Business Association, also called for Chinese to think carefully before opening their shops in Flushing.

Choe said more international brands will come to Flushing with the completion of new buildings like Flushing Commons and Two Fulton Square, both of whom have grand openings slated for next year. At the same time, the free parking space here is shrinking, rent is rising and city inspectors give tickets to businesses more frequently. These are what Choe based his depressing prediction on. “The situation will be even worse with the increase in the minimum wage. Low budget food will eventually disappear in Flushing,” he said.

Choe took Happy Food, a restaurant located at the intersection of Main Street and 40th Road, as an example. The restaurant pays $100,000 per month for rent, plus property tax – its rent is more than a million dollars per year. “This is higher than the rent for shops at Rockefeller Center,” said Choe. This, together with the vicious competition among restaurants, will eventually have Asian cuisine restaurants on Main Street replaced by international brands, and drive the Chinese and Korean shop owners out of business.

Choe said in order to maintain the dynamic and diversity of Flushing, shops here have to improve their services rather than lowering prices to win out in the competition. Also, apps that can help drivers find parking lots in real time are important. But above all, the city has to do more with public transportation in this area, such as expanding the subway station of the No. 7 train, building accessible elevators at the LIRR train station and building bike lanes.

“No one likes to run a business losing money,” said Tu. He said small businesses can ask the city to lower their property tax, issue fewer tickets and try not to add more financial burden to the already struggling businesses. But in a free market, the complaints about rising rent may not lead to any solutions, especially in those circumstances in which, once a shop is shut, the space can be rented out immediately to other desperate entrepreneurs.

Tu said the supply of shop spaces in Flushing is not able to meet the demand. He suggested that Chinese not rush into opening their own business but take some time to figure out what specialty they can offer via their business.

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