Wednesday, April 6, 2011

Hot Dog Vender Bid Tops $175,000 - 40 Vendors In/Around Central Park


Shelling out six figures for a piece of Manhattan real estate should get you a roof and four walls, but not if you're a hot dog vendor vying for prime selling space in and around Central Park, according to DNAinfo.

On Tuesday, vendors offered to pay the city hundreds of thousands of dollars to rent just a few feet of sidewalk space — the same amount some people pay for an entire apartment — for their pushcarts.

Minimum bids for the 10 new pushcart contracts up for grabs range from a low of $7,350 a year for the Central Park side of Fifth Avenue between East 97th and East 98th streets, to an eye-popping $176,925 for the right to hawk snacks and sodas at the northwest corner of East 60th Street and Fifth Avenue.

Bids for the patch of concrete on the southwest corner of Grand Army Plaza, across from the Plaza Hotel, start at a jaw-dropping $155,400.

The Parks Department rented out the pricey park property to about 40 pushcart vendors in and around Central Park last year, though the number of carts changes as contracts renew and expire, a Parks Department spokesman said.

A vendor's winning bid becomes the flat fee the vendor pays annually to the Parks Department for his permit. Vendors pay the fee in monthly installments like rent. They sign five-year contracts and they're expected to increase their annual flat fee by 5 percent each year.

Central Park Vendors Vy For Prime Real EstateThe minimum bid for a pushcart vending contract near the Plaza Hotel is $155,400 a year. (DNAinfo/Leslie Albrecht)

Vendors are required to follow a set pricing list: $2 is the maximum charge for a hot dog, $1.25 for canned soda. They're allowed to charge less, but they can't charge more without written permission from the Parks Department.

The Parks Department also wants to make sure customers get those snacks with a smile. In the instructions for bidding, the Parks Department tells applicants to explain how they'll measure customer satisfaction, and suggests using survey forms to gauge how well customers enjoyed their service.

The Parks Department sets minimum bids based on foot traffic, but ambitious bidders sometimes make over-the-top offers for prime selling spots.

In 2008, a pushcart vendor bid $643,000 for two locations outside the entrance to the Metropolitan Museum of Art, but he ran into trouble when he couldn't sell enough merchandise to make his monthly payments.

Cliff Stanton, co-owner of United Snacks, says that's a common rookie error among people new to the pushcart business. Stanton's company used to bid on vending spots, and now supplies pushcarts to vendors.

"A lot of individuals jump into the game thinking there's a lot of money to be made," said Stanton, who's been in the pushcart business since 1988. "They see only one side of it, the money coming in."

Central Park Vendors Vy For Prime Real EstateThe minimum bid for a vending spot near Central Park West and West 81st Street is $64,050. (DNAinfo/Leslie Albrecht)

Yes, there are profitable days when sales "make your head spin," Stanton said, but after vendors pay overhead costs like insurance, suppliers, taxes, and employees, "there’s nothing left."

"The days where it used to be a lucrative business are long gone," said Stanton. "These guys are generally left with pennies if they're lucky."

Yuri Shutovsky, co-owner of Sigmund Pretzelshop in the East Village, got into pushcart vending in December, after the city suggested he bid for a spot outside the Metropolitan Museum of Art.

Shutovsky said he pays roughly $94,400 per year in rent to the city, and making the monthly payments hasn't been easy so far.

The brutal winter forced him to miss entire days of selling, and even when weather is good, there are only a few hours when his product moves, because most people don't buy pretzels until about 1 p.m. and the museum closes at 5:30 p.m., Shutovsky said.

Shutovsky charges $3 for one of his gourmet pretzels, which are handcrafted with high-end ingredients, but he doesn't want to raise prices, even though that could help him make rent payments.

"We don’t want to sell pretzels for $100, it's a pretzel for crying out loud, we wanted to be democratic," Shutovsky said.

But he's hopeful business will pick up, and feels he pays a fair price for his location on East 81st Street and Fifth Avenue.

"It's one of the better locations in New York, because you have a captive audience," Shutovsky said. "There's nowhere to buy anything affordable. I keep my fingers crossed that we do better and better and at the end of the year, there will be a good profit margin."

Read More:

DNA Info - April 5, 2011 - By Leslie Albrecht
Bidding starts at $176, 925 for a pushcart vendor spot in a prime location near the Plaza Hotel.

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