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Is a 400% Rent Increase the Future of Coney Island?

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Dianna Carlin should be finishing the book she is writing about the joys of owning the Lola Star boutique, a “really tiny, magical little shop” on the Coney Island boardwalk, for the past 19 years.

Instead, Ms. Carlin has been anxious and fearful since her landlord weeks ago offered her a new lease — with a 400 percent rent increase. “I’m wondering if I should start ordering ‘going out of business’ signs,” she said.

In the summer, Brooklyn’s Coney Island swells with sunbathers and amusement seekers, but it tends to be much quieter in the winter.

Over a decade ago, New York City promised a year-round destination with a water park, an arena, an ice-skating rink, and millions of dollars in residential and commercial investment.

At the same time, then-Mayor Michael Bloomberg said, the cheap eats and mom-and-pop shops would be protected. The then-Brooklyn borough president, Marty Markowitz, said in 2005 that the plan would preserve “Coney’s famed freakishness and fun-loving spirit.”

But like many grand plans for New York, the full vision has not materialized. Coney Island stood ceremoniously desolate on a recent January afternoon, a far cry from the year-round bustling attraction it was promised to be. Roaring winds gusted by famed roller coasters like the Cyclone and Luna Park’s Steeplechase, but not by an ice-skating rink or a water park. Those wonders were never built.

And now, facing the steamroller of gentrification, even Coney Island’s quirky circus sideshow could be forced to confront an uncertain future.

“They’re trying to turn the People’s Playground into the playground for the wealthy,” Ms. Carlin said.

Ms. Carlin and the owners of five other small businesses in Coney Island — Nathan’s Famous, Ruby’s Bar & Grill, Paul’s Daughter, Tom’s Restaurant and the Coney Island Beach Shop — have been negotiating new 10-year lease agreements with Zamperla, the Italian amusement park manufacturer that was contracted by the city a decade ago to build and manage Coney Island’s Luna Park amusement zone, of which the businesses are a part.

Zamperla’s new terms: a 50 to 400 percent increase in rent for each of the businesses.

“I love Coney Island,” Ms. Carlin said. “Having this store on the boardwalk is one of the most beloved things in my life. But there is no way I could afford that.”

In a statement to The New York Times, Alessandro Zamperla, the president of Zamperla, said: “We care about Coney Island and its future, and we are dedicated to making it as strong a community as possible. This is why we’ve been working with our tenants to ensure their success and preserve the character of Coney Island.”

Mr. Zamperla, who was on a trip in Italy, declined to answer specific questions from The Times, but added that at least three of the six businesses had agreed and signed their new leases, and others were making “significant progress.”

The proposed rent increases on the six small businesses have reignited a yearslong tug of war for the soul of Coney Island.

In 2009, after a four-year standoff over the best plan for a revival, the Bloomberg administration bought seven acres in the downtrodden amusement district from the developer Joseph J. Sitt for $95.6 million.

Mr. Bloomberg wanted to restore the district, which began to decline in the 1960s, to its heyday by promoting the development of stores and apartments along Surf Avenue. Businesses that were open only in the summer would move to a year-round schedule, helping to bolster what Mr. Bloomberg envisioned as the nation’s largest urban amusement park.

The city leased the land to Zamperla, allowing it to open Luna Park in 2010, dictate its own lease agreements with small businesses owners, and even require those businesses to hand over some of their profits.

Beloved boardwalk businesses that did not fit Zamperla’s vision were shuttered. Others, like Ms. Carlin’s boutique, which had been evicted under Mr. Sitt, returned.

By 2012, the revival was underway, and crowds and revenue were growing. Ms. Carlin said her profits rose nearly 50 percent after Zamperla assumed control.

“Most people believe that it has been developed in a manner consistent with Coney Island’s history,” Seth W. Pinsky, the former president of the Economic Development Corporation, said about the area.

Still, the amusement district is not operational year-round. Mark Treyger, the city councilman who represents the part of Brooklyn that includes Coney Island, said he believed this stemmed from a dearth of investment by the city and Mayor Bill de Blasio in the 2009 goals.

“Businesses just don’t know where the de Blasio administration is taking Coney Island,” Mr. Treyger said. “There’s a lack of vision or holistic plan to improve the area.”

The unfulfilled promises, he said, gave Zamperla leverage to place the burden on tenants to help recoup squandered profits. These tenants were “invested with the thought this would be a yearlong destination, with foot traffic year-round, as opposed to three or four months out of the year,” Mr. Treyger added. “You cannot allow public land to be weaponized in the name of greed to hurt small businesses.”

Ms. Carlin and dozens of other Coney Island workers protested the rent increases on the steps of City Hall in early December.

In an interview with The Times, a civil rights lawyer, Norman Siegel, called Zamperla’s rent decision “unconscionable.” He said Mr. de Blasio should intervene.

The de Blasio administration, Mr. Siegel said, should ask Zamperla to come up with more reasonable terms. “If that doesn’t happen,” he said, the city “should give serious thought to pulling the lease.”

Mr. Zamperla said that in an attempt at good faith, he had extended the deadline for Ms. Carlin to sign her lease to Wednesday.

“Alessandro is vacationing in Italy while I’m working desperately to save my store and my livelihood,” Ms. Carlin said.

Neither Mr. Zamperla nor the owners of the other five businesses would comment on their lease agreements, though multiple people with knowledge of the terms confirmed that the increases ranged from 50 percent for the larger shops to 400 percent for Ms. Carlin’s smaller store.

Ms. Carlin said she believed the other businesses were not speaking out for fear of retribution. “They’re afraid of getting kicked out,” she said.

To handle the increases, Ms. Carlin said, owners have mentioned raising the prices of goods. One eatery, she said, was making changes to transition from a sit-down restaurant to a fast-food counter, to curb costs.

Ms. Carlin said that she has tried to beseech City Hall multiple times — with calls, emails and last month’s protest — but that it appeared that little has changed.

“The city keeps telling me they’re not able to help and there’s not much they can do, but I don’t agree with that,” she said. “They’re Zamperla’s landlord.”

Mr. Siegel, the lawyer, said the increases were so egregious that they might be grounds for litigation. “There is some case law where if the court decides that what they’re doing is unconscionable, that can be a claim in and of itself,” he said.

At City Hall, there have been no public indications of plans to pull back the lease from Zamperla, or to intervene; the rent increases do not violate the agreement between the city and Zamperla.

Jane Meyer, a spokeswoman for Mr. de Blasio, denied the claims that the administration had no vision or plan for Coney Island. She said the city spent $180 million upgrading Coney Island’s infrastructure in the last decade and planned to expand New York City’s ferry system to Coney Island by 2021.

“This administration is committed to maintaining Coney Island’s character while ensuring it’s equitable and prepared for the future,” Ms. Meyer said.

Mr. Siegel said he wondered just whom that future is for.

A Brooklyn native who grew up spending summers on the boardwalk, he fondly recalls spending a dollar to ride the Cyclone and coming home with no appetite for dinner after gorging on Nathan’s Famous hot dogs and fries.

“We’ve got to fight to save Coney Island,” he said.