Where Money Was Flaunted, Now It’s Budgeted  

May 01, 2009

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Michele Kleier Discusses Economic Changes on the Upper East Side

New York City’s neighborhoods are a patchwork of tribes, each with its own standards about manners and the flaunting of wealth. Chatting openly about an inheritance in a Williamsburg cafe or bantering loudly with buddies in a Park Slope pizzeria about “making seven figures” would be immediate grounds for social exile. But the Upper East Side is a different story.

This is a neighborhood where, until recently, it was commonplace for bankers to boast into their cellphones about their bonuses. Spike-heeled ladies clacked along avenues and noisily swung designer shopping bags. Developers could sell speculative shells of unfinished five-bedroom condos. Its residents boldly prided themselves that they were surrounded by the trappings of wealth: AmEx black cards, dexterous plastic surgeons and preened pooches.

But the Upper East Side has been served a dose of humility in recent months as its residents have watched their wealth slip away. Their chatter about bonuses has been replaced with gripes about severance agreements. Their investments have been wiped out by collapsed hedge funds and Ponzi schemes, often run by their neighbors.

Even the neighborhood’s coveted co-ops and town homes have lost their luster. The number of homes sold there dropped by 45 percent in the first three months of this year compared with the same period in 2008, according to the brokerage firm Halstead Property. And the shopping spree has ended; residents cannot stroll down Madison Avenue without discovering another boutique that has been shuttered.

“People have been sadder on the Upper East Side. Life in general is much quieter. Everything is more subdued,” said Michele Kleier, a resident who owns a real estate brokerage firm. Since her beloved cafe Petak’s closed, she has been trying to help keep other restaurants open by eating in the neighborhood rather than venturing downtown.

“I walk past my favorite restaurants and look into them and make sure they don’t close,” Ms. Kleier said. “We want things to survive.”

Local businesses are noticing in small ways that their customers are trimming budgets. Louis Balducci, a partner in the specialty food market Agata & Valentina, says customers are buying fewer high-end items like pâté, caviar, foie gras and smoked salmon. They now fill their shopping baskets with chicken rather than steak. And while they still buy candy, they have cut their pastry budgets and pick up “one cupcake instead of two,” Mr. Balducci said. At the same time, he is hearing more customers snap at his workers, and fielding more complaints from customers about matters he calls “insignificant.”

“Patience is running thin,” he said.

Residents have eliminated much of the splurging that many local shop owners depended on for business. Leslie Edelman, owner of the Tiny Doll House shop, has noticed that when parents come in to buy brownstone and Victorian-style dollhouses, they now want to spend $500 to $600, not the $1,800 to $2,400 they spent before the recession. Instead of hearing parents openly disregard costs when decorating the dollhouses, he hears more customers share their fears of losing their jobs. Many regular customers who stopped in weekly to brighten up their daughters’ dollhouses with wicker lawn furniture and $6 miniature Hermès shopping bags have disappeared entirely.

“Sometimes you ask, ‘Where did everybody go?’ ” Mr. Edelman said. “The impulse buying has disappeared.”

Some residents are becoming more confrontational about money itself. Tanya Zuckerbrot, a registered dietitian and founder of skinnyandthecity.com, used to be flooded with patients paying about $2,500 for five sessions of her advice. But demand for her services suddenly dried up this year; she joked that her office was quiet enough to hear crickets. Her patients trickled back in March. But then they brought their friends and tried to bargain down her prices by asking for two-for-one deals.

“I’m not used to talking about money to patients,” she said. “People are just worried.”

Yoga, however, seems to be on the rise. Michelle Demus, program director for Pure Yoga, says the studio’s membership has doubled in the past 10 months — there are more “Type A athletic types” and people who have cut private yoga instructors from their budgets. They are “leading very stressful lives, and they need to find some peace,” she said.

But many of these new members are still in the early phases of adapting. Ms. Demus has been battling a growing number of people trying to check their BlackBerrys and take cellphone calls in the middle of yoga sessions. Her instructors “gently” tell them to switch them off and perhaps take a break from their worries.

“It’s great for them to realize that the world will continue spinning,” Ms. Demus said, “if they let go for an hour.”


Hot Property Book

The stars of HGTV's “Selling New York” let fans step inside the high-profile world of Manhattan real estate in a wild and one-of-a-kind novel of stormy egos, sumptuous homes, and staggering fame and fortune. Written by Michele, Samantha & Sabrina Kleier.