A lawyer for the struggling St. Mark’s Bookshop tells us “they’re probably not going to be around much longer, we’re talking days.” Since we last reported on the shop’s fight against eviction in the face of $62,000 in back rent, its problems have only mounted in the form of a $34,400 tax lien and a dispute with one of its biggest book distributors involving thousands more dollars in debt. Yesterday, the shop announced a “clearance sale” in a last-ditch effort to raise money before a forthcoming auction.
The beloved East Village bookstore took to Facebook on Thursday to announce a price slash of 50 percent for everything in the store. Cash only. And, according to its website, online sales have been suspended. We asked Bob Contant, co-owner of the shop along with Terry McCoy, if the clearance sale means the store is closing. “Unless there are investors that step up at the last minute, yes,” he said. “Because we don’t have the money to continue.”
James West, the shop’s lawyer, spoke candidly with us in a separate phone call this morning. “They were served with a Marshal’s Notice about a week ago,” West explained. “The people they owe money to are, among others, the State– there are some taxes due– but there are some other creditors, one of them was a book distributor. That was the pressure point.”
“The State doesn’t usually play games,” West added. “That was pretty much it.”
According to New York’s Department of State, a warrant was issued on January 21, 2016 for a $34,408.76 tax lien. The only way out of a tax warrant is to pay the bill in full or file for bankruptcy. Then, as Contant explained, as a result of losing a legal dispute with the book wholesaler Baker & Taylor (which boasts the title of “world’s largest distributor of books and entertainment”) a U.S. Marshal Auction has been scheduled for Wednesday, February 10.
St. Mark’s seems to have weathered the worst of Murphy’s Law as of late: declining sales, a rent raise that forced it out of its home of 21 years, and finally potential eviction by the city at a brand new space. “They ran into too many bad things happening all at once and they could not get out from under it. It started with the move and this new economic environment,” West argued. “I don’t think they ever got the momentum going in the new space.”
West, a concerned neighbor and longtime patron of the store, has been working primarily on behalf of St. Mark’s Bookshop’s defense in the City’s eviction case. West was working out a deal with one of a handful of distributors that are trying to collect, and was “making some progress, although it was slow.” But the State’s claims put a stop to all that. “When the State came in, and they have a larger amount that they’re claiming, they issued a warrant,” West explained. “It’s sad, I don’t even think we’re going to get to the hearing date on our motion which is on March 9– they just don’t have a bank account right now, they can’t really do anything.”
By Contant’s estimate, the bookstore has been doing business with Baker & Taylor “for 25 to 30 years,” and the two had an amicable relationship until recently.
“We’ve probably done about $3 million worth of business for them every year, and that’s a conservative guess because we used to order from them every week,” the co-owner explained. When it came time to move, the shop had accrued “a little over $30,000” in debt, but payed “half” that off relatively quickly. But that period of gains was all too brief. “We let them know that we would have to take a break from making payments because we just didn’t have the money,” Contant said. For a while, Baker & Taylor “didn’t really give us a hard time about that, they said, ‘Well when you’re back on your feet…’” Contant recalled. “Anyway, we never could resume payments.”
According to court records, the distributors filed suit against the bookstore back in August and by December, Baker & Taylor had won the case which “allowed them to put a freeze on our bank account,” Contant explained. “We only have $900-and-some in our bank account, so we’re a long way from $14,000.”
James West explained the Marshal’s auction was part of fulfilling what’s called an “execution notice.” The owners’ “cash only” appeals appear to be a way to get around the bookstore’s frozen bank account. At the auction, the State will sell what’s left of the bookstore’s stock in order to pay off taxes owed. But even that seems like a tentative situation. “The books are not going to be worth very much, maybe in the thousands of dollars,” West admitted. “It may be that the auction itself is going to be more expensive than the books are worth. It’s doubtful to me that they’re even going to go ahead with it.”
Contant also threw shade at the auction, raising doubt as to how much money the creditors would be able to scrape up. “Maybe they’ll get another thousand out of the store, there’s nothing here,” he said. “There are some books, but at an auction books are a nickel apiece. Otherwise there are some old computers and furniture. Anything that’s built in, they can’t take.”
Which raises the question: Why even go forward with the auction? The shop made Baker & Taylor an offer to “forestall” the proceedings, Contant explained. “We offered them $400 a month in payments, plus a $3,000 cash deposit on our debt. They said that wasn’t acceptable, they needed $5,000 and an $800 payment plan. So they basically doubled what we offered. I guess they think we have money. I don’t know what they think. So I don’t know what this is all about.”
The familiar story of bookshops struggling to stay relevant in light of atrocities committed against the printed word like the Kindle hasn’t played out the same way for every likeminded business in the area– just look at the success of The Strand. But St. Mark’s, unfortunately, seems to have met with just the right circumstances for financial disaster.
And yet, despite all the awful news, West still sounded hopeful that St. Mark’s Bookshop could have a new lease on life somewhere down the road. As The Awl reported earlier this week, several investors already have their names on the lease. One of these “secret” partners is Charles FitzGerald, an East Village resident since 1959.
He still wants to help, but doesn’t want to put good money after bad. “It cannot be revived unless there’s a clean slate,” [FitzGerald] said, describing a plan to start a new store under a different name, paying Contant and Terry McCoy, who co-owned the store until very recently, to run things as salaried employees.
Another investor, Rafay Khalid, told the blog that he preferred to think of a new St. Mark’s as a “startup,” and detailed a proposal by which the City would forgive the current debt and the new investors (and new shop, under a new name) would pay an agreed-upon higher rent to compensate.
But West called the press coverage of “investors breathing new life” into St. Mark’s Bookshop “not really true” when you face the facts. “Nobody has really breathed anything,” he said. “There are some ideas floating around, and some conversations.” Still, West echoed the investors in the belief that, if St. Mark’s has a future at all, they’re going to need to start from scratch. “I think they’re going to have to turn out the lights first and start over with a clean slate,” he said.
Contant emphasized the need for more investors. “It’s still going on, it just hasn’t really materialized,” he said of the plan for a St. Mark’s overhaul. “There’s an investor who’s willing to pick up the lease, he’s willing to deal with the back rent, but he wants other people to join in so that he doesn’t inherit an empty store. He doesn’t want just the storefront, he wants the bookstore. So he’s counting on other people putting money up for inventory, in which case he’ll deal with the back rent, which is significant at this point.”
As bleak as this sounds, in taking a longer view, a new St. Mark’s is feasible. “This is only the second day since we started the clearance sale, so it’s still too early for us to tell,” Contant said. “As the word of this spreads and other people know about it, maybe someone else will get involved.”
West reiterated that having the City as a landlord could prove enormously helpful. “The City may be able to justify rewriting a lease, because the bookstore’s already built up, it’s a beautiful store, the architectural treatment is fantastic, any other space it would cost a lot of money to get to that point– it’s there, it’s ready, all it needs is a bunch of books,” West said. “It could happen very quickly, but it’s up to the City, they have to be interested.”
As for the short term– well, you saw the clearance sale. “When you say ‘fight this,’ there’s not a lot left that anybody can do. There’s really no way around this current mess, there are too many creditors banging on the door, and one of them happens to be the State of New York,” West confided. “But I’m still hopeful, and I have to be the person with the bucket of cold water. Even if I were to perform some magic feat and get this judgement vacated, now we’re down to a matter of hours, really.”
St. Mark’s Bookshop is located at 136 East 3rd Street. The clearance sale is ongoing, with 50 percent off everything (cash only).