NYPD’s Privately Funded Fashion Squad Closes Down Canal Street

New York Press
Canal Change”
January 20, 2010
A personal favorite about ever-gentrifying downtown.

What’s left of Canal Street’s hawkers and small merchants—Hispanic stereo salesmen, Chinese dry-goods merchants, Lebanese gold sellers and Jewish landlords—all agree on one thing: “The fix is in.” Everyone knows the clock is ticking.

Two new hotels, including a 361-room Sheraton, are due to open on Canal in the next six months. Very soon, locals say, Canal Street will join Times Square, Astor Place, the Lower East Side, the Garment District and all the other former centers of down-and-dirty capitalist grit that have been safely gentrified. As Greg “Heavy” Duval, an African-American watch-peddler explains before the Christmas holiday, “Canal is on its last legs. They want to make this a franchise block.”

It was just after Thanksgiving, during the height of the holiday shopping season—when the streets are typically flooded with rapacious bargain-hunters—that the mayor’s special counterfeit goods enforcement unit rushed through the strip’s motley storefronts handing out vacate orders signed by the NYPD, Buildings Department and the New York State Supreme Court. During the operation, 16 stores were ordered shut for periods of up to one year. More forced closures followed. Curious shoppers found a blue and white NYPD “Sky Watch” tower sitting ominously in the middle of the block. It was clear that no one—shoppers or vendors—was welcome. Keeping an eye out for illegal activity, a patrolman stands in the camera-equipped lookout of the watchtower. The stark law-and-order symbol, wheeled out in late October, gave this once-jumping strip the air of a paramilitary occupation.

The latest operation was the culmination of a yearlong campaign against phony goods in the so-called “Counterfeit Triangle,” the area of Canal located between West Broadway and Lafayette Street, and focused on Canal’s longest block, between Broadway and Church Street. A strongly worded summons served on 33 landlords during the Dec. 8 raid used language that sounded like it was concocted during the Inquisition, labeling the block “a witches’ brew of public nuisance.”

Each landlord is facing a $100,000 fine for allegedly abetting the sale of counterfeit merchandise. The total fines for the landlords come to over $3 million. Just two months back, this block pulsated with crowds of tourists haggling in the strip’s lingua franca of blunt dollar amount and few verbs. Sidewalk bins stuffed with wallets, hats, belts, perfume, necklaces, scarves, sunglasses and DVDs mingled with street hawkers selling from suitcases. Tribal dialects mingled with Creole, English and a smattering of Mandarin. Now the area remains eerily quiet save for a couple of electronic stores—with no customers. Red, orange and white eviction notices stuck to the locked grates of the closed stores flap in the wind.

In front of the subway entrance at Broadway and Canal, a shivering Congolese flashes laminated pictures of counterfeit handbags to the few tourists still bargain-hunting the block’s peripheries. At the moment, sidewalk hustlers still vastly outnumber potential buyers. Celebrated as New York City’s go-to destination for cheap merchandise and global flavor, Canal Street has been a fixture of tourist guidebooks for decades. Lonely Planet highlights its boundless “treasures and junk;” Fodor’s trumpets its “gauntlet of knockoff handbags and perfumes.” This was no secret, but a staple of the tourist trade.

The block between Broadway and Church was the neighborhood’s beating heart. A Congolese man sums up the block’s post-holiday blues when he explains, “I’m trying to hustle, and this girl don’t want to buy no bag. And the economy is way down.” Like the other African immigrants clustered on the block on a weekday afternoon, he hasn’t had a sale all day. After one more go with the laminated cards—“I’ve got anything you want, Chanel, Guess, Louis Vuitton”—he retreats back to his wheeled suitcase. Within seconds another vendor steps into his spot.

The push behind the clean-up-Canal-Street campaign was teased out by a Jan. 13, 2010, New York Times piece, which focused on confiscated knockoff clothing that was shredded rather than donated to the poor. It implied that the mayor’s own “special enforcement unit” is subject to financial influence by the fashion industry, stating that fashion and licensing industries are “major financial supporters of the New York City Police Foundation, which has financed investigations of trademark infringement by a squad of police officers.”

Legal documents obtained by New York Press shed some light on the official machinations behind the Dec. 8 raid. Investigators from Counter-Tech Investigations, a private firm hired by the labels, buy goods in stores that are deemed suspicious. After experts employed by the fashion industry confirm that the purchased items breach copyright, a warrant is issued. This kind of corporate-led investigative technique is unique to counterfeit-goods enforcement.

Landlords and merchants engaged in the battle have no doubt that the fashion industry is behind the crackdown. Word on the street is that the ties between fashion labels and the special enforcement unit go even deeper. “They pay the city’s special enforcement attorney fees,” claims one landlord, who’s had multiple motions filed against him. Landlords also say that it is no coincidence that a flurry of building code violations also came down on Dec. 8. For example, a stack of paperwork filed on that date names a realty holding company for multiple code violations on a property it owns on the block. Included in the seven infractions the holding company is charged with are separate violations for “failure to comply with awning permitted projections” and “shelving located on exterior stoop.”

The besieged Canal Street storeowners that I spoke with fall into two categories: Immigrants with only a rudimentary grasp of English—who thought I was a corporate spy—and hard-bitten cynics who fear the city’s wrath. In the words of Al, a middle-aged electronics storeowner, the button-lipped merchants are either “Chinese who are afraid of the police, or old Jews who won’t say nothing.” Al is a second-generation Jewish merchant who is “racked with nerves,” but laid out his troubles with the city in stark detail after I guaranteed not to publish his last name. He leafs through over 300 bound pages—writs, warrants, violations, summonses, maps, deeds, informant’s testimony and police surveillance findings—related to his Dec. 8 case. According to him, an ineffectual lawyer took him for $10,000. But he’s luckier than some: The immigrant merchants who rent space from him can’t afford lawyers.

On numerous occasions through the holidays, the electronics store—which lies in the nexus of the dead zone—was virtually empty. The crackdown and ensuing loss of foot traffic combined with the unyielding deep recession caused a staggering 60 percent dip in revenue since last year. Now Al has to deal with lawyers’ fees, further loss of income—both from tenants forced to vacate their leases because of counterfeit-goods related charges—and the expense of getting his premises up to code. Not to mention the $100,000 in damages sought for his part in creating a “public nuisance.” Echoing a universally held conviction on the strip, Al says the mom-and-pop stores don’t have a chance against the city: “They find something to close you down. They’re playing dirty.”

For 16 years, Abraham Diallo, a slightly built graying Guinean immigrant with seven children, sold items like T-shirts, socks and sneakers from storefront space he rented from Al’s father. Diallo paid $2,500 a month in rent, contributed to the city’s tax base and employed two men. The arrangement—which Diallo remembers fondly as “a beautiful thing”—was ended May 21, 2009, in an early-morning special task force raid that foreshadowed the Dec. 8 crackdown.

“They thought they were going to find a goldmine,” Al remarks bitterly. “But all they found were a couple fake Nikes.” Nevertheless, along with the knock-off sneakers, the fire department cited Diallo for unsafe shelving. The result was thousands in fines and Diallo’s forced eviction. The unimpressive one-story property, built in the late-1980s, was even given landmark status, which gave the city a cover in forcing Al to carry out extensive renovations. This included removing the partitions, which insured there would be no more small-time immigrant tenants.

On a frigid day in January, beside the fenced-in Sheraton construction site, Diallo and his former employees stand silently waiting for some business. With no storefront space, they are left to sell socks and T-shirts from cardboard boxes. Up in the Bronx, Diallo’s large family is worried about the possibility of eviction. Asked if he blames the more recent African arrivals for bringing down heat on Canal, Diallo pauses for a moment. “We blame the city,” he says firmly, rubbing his gloveless hands together to stay warm. “Many of these people who sell in the suitcase outside, they used to have a place. I can only pray that God will listen.”

Although he will only acknowledge the incident with a grave nod, Diallo has more reasons than most to mistrust the city’s machinations. On Feb. 4, 1999, four plainclothes cops fired 41 rounds into his 23-year-old nephew Amadou Diallo, as he tried to enter his Bronx apartment. Much like his uncle has recently, Amadou eked out a living selling socks and videotapes on 14th Street. Diallo’s murder, and the subsequent acquittal of the four officers on the grounds they thought Diallo had a gun, sparked protests from the African immigrant community. “It’s like the city keeps ruining this frigging guy’s life,”
Al says.

Surrounded by blocks of locked grates in both directions, Canal between Broadway and Lafayette looks like its ready for its last stand. A small number of tourists trundle past Chinese mom-and-pop dry-goods shops. The Chinese storefront hawkers are visibly touchy about defending their sidewalk turf from independent African operators. The city, however, doesn’t acknowledge the tug-of-war. In a Dec. 8 summons, the City claimed that the storefronts are selling to peddlers at a steep-discount, which, if true, would undercut the storefront’s own customer base. Such charges against the merchants fall under a catchall statute that can be understood through the thickest Mandarin accent: “Nuisance Abatement Act.”

A 50-year-old Chinese man, calling himself Harry, has rented Canal storefront space marked by a 1920s-era tin white sign that boasts radio tubes parts and equipment for decades. His wife buzzes around him nervously when I approach him asking questions. No stranger to the “Nuisance Abatement Act,” Harry tells me that trademark infringement and building code violations have always been the price of doing business on the strip.

Doing business has just gotten much more expensive for merchants. Harry claims to have recently shelled out $10,000 to the city for charges that fall under Nuisance Abatement. Harry repeats a widespread belief on the strip that the city is disproportionately targeting storefronts because it generates more revenue than busting street hustlers, who are generally slapped with a $50 fine for a similar offense.

Al claims that unlike the street peddlers’ fake-Louis Vuitton bags, most charges of trademark infringement against merchants stem from “soft counterfeiting”—stuff without a popular international logo. Indeed, the Dec. 8th warrants are strewn with obscure brands: Stars and Stripes belt buckles, perfumes like L.A.M.B. and Daisy. Al asks, “Who ever heard of that stuff?”

During the holidays, merchants pointed to hustlers pitching in front of stores with vacate orders as an example of inconsistency in enforcement. While the owners and landlords sweated, the African hustlers—who are used to having nothing—waited coolly to poach recession-weary customers on the prowl for a bargain. Even Duval, a streetwise hustler from way back, has his own troubles with the Africans; they’ve given the cops excuses to make arrests, he sneers. “They didn’t just ‘burn down’ the block. They straight fucked it up,” he says. Duval lovingly recalls making “$150-$200 a day” at the height of the boom—when a $50 knock-off bag was just the thing to make a working-class girl feel like Paris Hilton. He’s lucky if he goes back to Brownsville with $30 in his pocket now. Soon, Duval says, when the franchises and hotels edge out “independent operators,” there will be nothing but empty pockets. “It was a nice hustle while it lasted.”

Everyone working Canal has his own spin on the city’s zeal to crack down and clean up the place. An Orthodox Jewish accountant blames “incompetent big-government liberals” looking to enrich the welfare state by raiding the middle-class. For Al, the Canal Street situation demonstrates the local impact of globalization, in which national and international chains drive down the price of Canal’s real estate by extinguishing its prime appeal to consumers.

“I think it’s a two-step combination,” Al theorizes. “First step, the city gets some cash. In the longer term, bring in the bigger-box stores, bigger franchises, corporate people.” It’s already happening, according to him: Starbucks recently offered $12,000 a month for his father’s newly renovated “landmark” corner storefront. His father was thinking $25,000.

On the corner of Canal and Church, a dreadlocked hustler wearing a large Afro-centric silver-plated medallion around his neck agrees that “it’s [all] global now.” He offers me some friendly advice: “Start learning some more languages.”