Korean Businesses Urge NYS Financial Support

At a March 17 press briefing joined by leaders of Korean-American small business groups, Sang Suk Park (second from left), president of the Korean American Dry Cleaners Association of New York, speaks about struggles that dry cleaners are facing due to the latest regulations. (Photo via Korea Daily)

Feeling overburdened by the latest state and federal regulations, Korean nail salon owners and dry cleaners in New York are heading to Albany to seek relief from the state government.

As the April 1 deadline nears for a new state budget, Korean owners of nail salons and dry cleaners will hold a “lobby day” rally on March 21 at the state capitol to urge the state legislators to include $3 million in financial assistance to those businesses in the final 2017 state budget. Nearly 50 leaders of Korean and Chinese small business groups are expected to join the rally, led by Queens Assemblymember Ron Kim.

The new funding to assist dry cleaners and nail salons to comply with the latest environmental regulations was added to the state Assembly budget resolution last week, and the business owners are asking the Senate to include it in the final state budget. Korean American Civic Empowerment, or KACE, which holds annual grassroots lobbying activities at the federal and state level, will participate in the event, knocking on doors of the state legislative offices and distributing petition letters to protect Korean small business owners. Leaders of other Korean organizations such as a gourmet business group and Korean Community Services will join the outreach as well.

Earlier on March 15, the state Assembly added a $3 million budget to assist dry cleaners and nail salons as a part of the Environmental Protection Fund. This funding allocation through the Environmental Facilities Corporation’s Financial Assistance to Business Program, or FAB, will provide funds for dry cleaners and nail salons to upgrade ventilation equipment at nail salons and introduce non-perchloroethylene (also known as perc) facilities at dry cleaners to meet air quality regulations. (The state government created the FAB program as part of the Clean Water/Clean Air Bond Act of 1996 to help businesses comply with the latest environmental standards.)

[Translator’s note: Last year, Gov. Andrew Cuomo signed an executive order to require the installation of ventilation systems at nail salons, and as the U.S. Environmental Protection Agency deemed perc a likely carcinogen chemical, dry cleaners are required to eliminate perc in stores in apartment buildings nationwide by 2020. But Gov. Cuomo announced last year that the state health and environmental officials should be tasked with developing regulations to ban the use of perc in the dry cleaning industry, regardless of the type of building they are located in. He also called for more research to be done about perc’s potential harm, and the state may move the 2020 deadline even earlier, depending on the result of the new search. These two announcements angered Korean nail salon owners and dry cleaners as they believe the cost to comply with the new regulations is too high.]

But the $3 million funding may not be adequate to comply with the latest environmental mandates. There are nearly 27,000 dry cleaners and 6,000 nail salons in New York, and more than 50 percent are owned by Koreans. Among those businesses, about 5,000 need to install new non-perc facilities and ventilation systems. Even if the $3 million funding is provided, that would give each business $600 on average, well below the average cost. Installing non-perc facilities and ventilation systems costs at least $97,500 and $24,000 per machine, respectively.

“Nearly 25 percent of Korean-owned dry cleaners in New York closed down over the past four years due to the financial burdens of complying with the latest requirements – which cost up to $120,000 per business – skyrocketing rent, and growing labor costs,” said Sang Suk Park, president of the Korean American Dry Cleaners Association of New York. “The average expense per (dry cleaning) business exceeds $7,000 monthly. If we have to pay an additional cost of installing new equipment, more businesses will have to shut down. But, if the state government can assist us with at least 10 percent financial funding of the total cost, we may be able to survive.”

“Including nail salon businesses, aging of small business owners and difficulty in securing successors are becoming a serious problem for Koreans,” said Sang Ho Lee, president of the Korean American Nail Salon Association of New York. “In this difficult social condition, they are overburdened with the new regulations which have created a repressive environment where they have been forced to close or move to the suburbs.”

However, they believed that the $3 million funding inclusion in the state’s final 2017 budget may bring hope. Kim said that the annual amount of funding could be expanded over time and he is seeking a total of $50 million in funding by 2020 to help struggling small businesses.

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