Coffee Rules in Manhattan: Despite COVID-19 and a changing city landscape, bean-centric businesses thrive
By Akane Ka
In 2012, when James Jung decided to open a coffee shop, he looked at different possible neighborhoods in Manhattan – Midtown, the Upper East Side – before settling on Morningside Heights, with its deeply-rooted coffee culture and affordable rent. The neighborhood offered diverse customers among university-goers, residents in the International House, and locals.
James and his business partner, Alex, gave his coffee shop a Japanese name, Kuro Kuma, meaning black bear, in the spirit of the local cherry blossom park, Sakura. Business was good, but that was before COVID-19 hammered New York City in March of 2020, designating it the global epicenter of the virus.
In its wake, the pandemic devastated New York City's restaurant and café industry, and more than 1,000 such shops have permanently closed, Eater reported. Across the city, from March 2020 to January 2021, more than 122,000 staffers, baristas, and bartenders lost their jobs. In its most devastating months, from March to November 2020, $10.3 billion of restaurant revenue was lost, and 88% of restaurants could not pay the rent in October 2020, according to Restaurant Dive.
In March 2020, former Gov. Andrew Cuomo shut indoor dining, and New York state allowed restaurants and bars in the city to deliver to customers. An emergency eviction moratorium was put in place, which provided commercial tenants extensions on rent without payment. Then, former President Trump signed the first Coronavirus Aid, Relief, and Economic Security Act, aka CARES Act, worth $2.2 trillion. The loan system helped small business owners in the industry, as National Restaurant Association assisted owners in applying for a Paycheck Protection Program loan and an SBA Economic Disaster Loan.
To lessen the crisis, 40% of landlords in the eating and drinking industry reduced rent, 35% allowed tenants to postpone payment, according to the NYC Hospitality Alliance, and 14% allowed renegotiation of leases. Twenty-four percent even renegotiated rent with business owners.
Kuro Kuma also faced the risk of closure due to the lockdown, so Jung negotiated with the landlord about rent and took advantage of the state loan offer, the NYC Small Business Loan Fund and Small Business Grant Program, which assists local business owners in avoiding financial crises. Over $155 million would be allotted to small business recovery and job training in emerging markets in New York City’s 2002 the Fiscal Year 2022, according to an April 2021 press release from the office of Mayor Bill de Blasio.
At the pandemic’s peak, following the first confirmed case of COVID-19 in New York City in February 2020, many office workers escaped from the city and started working remotely, so the business districts, such as the Financial District and Midtown, became ghost towns. Morningside Heights, famous for its warm, eclectic community, was thrown into a similarly daunting situation as people evacuated from the area. Jung was alarmed by the sudden loss of customers and feared for the survival of his business.
Back in Morningside Heights, an Academic Acropolis encompassing Teachers College, Barnard College, and Columbia University, which has more than 33,000 students and 3,400 instructors, and decided to hold all classes remotely through the end of the spring semester of 2021. Suddenly, Jung lost his central customer base.
“Alex and I decided to open our shop in Morningside Heights because of the diverse neighborhood,” recalled Jung, who moved to the US from Korea at 18 to attend NYU. “And it’s near a college with lots of hip and open-minded students.”
After graduating in 2001 and pursuing different jobs, Jung realized coffee gave him a sense of warmth, unlike the stern and stubborn office work he was used to. In 2009, he pursued his master’s degree and worked a part-time job at a coffee shop in New Jersey. By 2012, Jung and his college classmate, Alex, resolved to co-own a café, Kuro Kuma. Jung and Alex chose the largest unit on La Salle Street and Broadway, with wooden floors and exposed brick that suited their taste. The other two units were narrow but eventually leased to an appointment-only Pilates studio and a one-seat barbershop.
By June 15, 2020, there were 2,335 COVID-19 cases and 262 deaths in Morningside Heights and West Harlem, according to the New York Times COVID tracker and database. In addition to the high rates of COVID-19 and the temporary shutdown, expensive rent on the west side of Manhattan accelerated the decision for many students to leave campus. The pandemic halted Jung’s business, and he and his partner needed to find another way to survive.
Jung closed the shop from March 2020 to May 2020, following New York state regulations, and was forced to dismiss seven employees. He was terrified to see the situation before his eyes because his loyal customers, mainly students and faculty members, seemed like they had left the city forever.
“I closed the shop for 60 days at once, but I was not sure what would happen next,” Jung recalled. “I could not keep my employees. They were very cheerful and friendly people, but I didn’t have many choices. You cannot imagine how empty Morningside Heights was. Students were all gone. It was a scary moment for me.”
In June 2020, New York City launched its Open Restaurants program, which provided guidelines to help restaurants expand their outdoor seating. Jung followed the safety protocols, removed four small tables inside the shop, provided to-go orders after the reopening, and set up two round tables outside the shop. He decided to manage the shop alone and wait for students to come back.
They did, for in-person instruction for the fall semester of 2021. Morningside Heights seemed to be returning to its past glory. One recent morning, there was a long line of people waiting in front of Kuro Kuma for a fresh cup of coffee and pastries. The coffee shop, against great odds, had survived.
David Vakili, a 27-year-old man, works for a start-up health tech company living in the Upper West Side. He has been working remotely due to the pandemic, and he spends money generously on his coffee.
“During the lockdowns, many coffee chains closed their doors in the downtown areas, where most offices were located. However, cafes and coffee shops in Morningside Heights and the Upper West Side remain open because residents started working from home and needed enough cups of coffee a day,” Vakili said. "I work hard to earn money, and I am happy to pay for having delicious coffee, and I cannot live without drinking coffee as other New Yorkers say.”
Although Jung maintains infinite hope in running a Manhattan coffee shop, owning a café is an unprofitable job, he said. There are competitive, big-name coffee chains catering to the dynamic working people and students in Morningside Heights and the Upper West Side, where people can have seats to study and work for hours.
But Kuro Kuma does not offer working space, as Jung needed to keep the shop small to afford the rent (a local barista said a 200 sq. ft. shop rents for about $5000 a month). Instead, Jung creatively employs other approaches to distinguish his cafe from chains, such as cutting the cost of having a kitchen by ordering freshly baked pastries from local French restaurants.
“Rent is expensive in Manhattan, of course. I am also worried about two things,” Jung said, citing two other central concerns that are less predictable: mask hesitancy and the increasing price of plastics as global shipping delays worsen.
“Young people care about the environment, and many students visit here and say they prefer to have iced coffee in paper cups. It is a rapid shift. I was forced to change the tradition, but it has turned out to be great,” said Jung, acknowledging the global and local need to adapt quickly as a business owner. “I try to be flexible and let myself sink in the cultural change.”
He recalled the subtle changes in the neighborhood after Hurricane Sandy in 2012 but said the primary driver is real estate development. Landlords seem to be less and less benevolent when property changes hands. Despite losses to the community aspects of the neighborhood, Jung acknowledges that not all change is bad.
“Columbia appears to be in a sort of empire-building mode that may persist for generations, and it is optimal for the city’s long-term health,” he said.
Though Kuro Kuma is a snug, 100 sq. ft. coffee shop, where people can enjoy strong espresso, it’s the interpersonal warmth of the ownership that sets it apart from the more transactional competition.
Jung remembers the customers' names and enjoys small talk with them. Kuro Kuma’s clientele seems to be layered between a very transient group of students, a slightly less transient group of university faculty, and a more static layer of long-time locals. It feels like a significant percentage of regulars turn over each school year.
“Life is short. Mistakes can be learned from. There are second and third, and fourth chances in business, but life moves fast,” Jung said, recalling how in the cafe’s first year he introduced himself to each customer until he realized that many people did not have time for anything beyond superficial interactions. So now he waits for customers to introduce themselves to him, and is always happy to reciprocate.
“Learning from mistakes will yield success. Making mistakes and not adapting to the resultant situations will sink you. I’m still learning all of this myself every day.”