$5 Watches vs. $5 Coffee: Can Manhattan’s Cheap Goods District Hold Off the Yuppies?
As he leaned against a display case filled with gold-plated and sterling-silver jewelry, Shappy Mehta listed his prices (necklaces: $3 and up; watches start at $1, if you don’t need a battery) and detailed the miseries plaguing his business. The store, M.K. Sterling & Watches Inc., takes up half a storefront on 29th Street, just east of Broadway, in the center of Manhattan’s low-cost wholesale district. Within a few blocks, there are dozens of other stores that import low-cost products from Asia (cheap watches, hair extensions, perfumes) and sell them to store owners visiting from all over the Northeast and, to a surprising extent, much of the developing world too. Business has been awful lately, but Mehta doesn’t blame the lousy global economy; instead, he blames the building across the street. “Because of the hotel, things got bad,” he said. “They want everything high end.”
In 2009, the Ace Hotel took over a derelict single-room-occupancy hotel on the southeast corner of 29th and Broadway. In addition to $500 rooms, the Ace also sells a certain kind of lifestyle that’s at odds with its neighbors. I saw it up close when I sat in the lobby with Chris Sacca, a venture capitalist and Twitter investor, who explained that places like the Ace have become central nodes in what he referred to as the global-ideas economy. They cater to a new generation of workers, he told me, “who decamp from home to establish themselves in coffee shops, lobbies and foyers.”
The battle over 29th Street may seem familiar — new wealth pushes aside older, poorer neighbors — but what’s going on here is not just the latest Manhattan gentrification story. The neighborhood is the front line in a conflict between two enormous economic networks: high-end globalization (intellectual property, yuppies, laptops) versus its low-end counterpart (cheap mass production and a complex supply chain). Amazingly, this is a battle in which the small businesses catering to the world’s poor have a real shot.