On Fifth Avenue, Retail Ritz Battles a Peddlers' Bazaar

FASHIONABLE Fifth Avenue, perhaps America's most famous shopping street, is undergoing changes that threaten to tarnish its elegant image. Several of the shifts relate directly to the worsening economy. Both B. Altman and Co. and Bonwit Teller closed their avenue stores within the last 14 months. ``Lost our lease'' discount jewelry and electronic stores, as well as fast food eateries, have proliferated.

So has the number of daily peddlers, legal and illegal, who often sell counterfeit wares.

Applications for newsstands along Fifth Avenue also are up. Two of the nine pending call for places in front of Cartier jewelers and the Empire State Building.

But retailers and government officials are fighting back. The issue is in part one of atmosphere and public safety. Retailers say it is also a question, ultimately, of survival. Goods sold on the sidewalk seldom compete directly with store merchandise, but dollars spent in one place are not spent in another.

If present trends are not reversed, says Tom Cusick, executive director of the Fifth Avenue Association, more financial shocks of the kind that have already led to Wall Street and banking industry layoffs are likely.

``There's no doubt of it in my mind,'' he says, ``because the customers who go to Fifth Avenue for quality purchases and service are, slowly but surely, no longer going.'' Mr. Cusick says many say the avenue has become a street carnival or bazaar.

``It's creating a terrible atmosphere that doesn't exist to this extent anywhere else in the world that I know of,'' comments Democrat Carol Greitzer, a member of the New York City Council. ``We should be able to keep a certain ambiance on streets maintained as attractive tourist areas.''

A few gains have been made. Most of the large illegal signs and banners put up last year by fast-food operators, who viewed the resulting fines as a cost of business, are now gone. Avenue retailers successfully argued in court that fines should be raised and extended to officials of parent firms.

Though the number of newsstand applications for sites on Fifth Avenue is up, none over the years has yet occupied sidewalk space along the mid-town stretch. Each case is considered individually in accord with loose city guidelines.

Ms. Greitzer has drafted legislation to shift the job of site selection to city planners rather than leave the choice to applicants. Considerations such as the number of existing newsstands in any area would figure in the decision.

In many ways the most troubling and sensitive issue for Fifth Avenue retailers is the rise in street peddlers. The avenue is part of a restricted area, open to licensed vendors only on Sunday.

However, an appeals court ruling last April held that an 1894 state law giving special consideration to disabled veterans takes precedence over such local limits. Since then disabled veterans who have peddler's licenses have been free to sell their wares anywhere anytime.

As a result, licensed and unlicensed peddlers, three-card monte players, and pickpockets now abound. Tales are many of exploited disabled veterans who are hired by unlicensed peddlers to make sales legitimate but are given only a fraction of the day's take.

``The disabled veterans are like magnets for the others - there's a whole connection there,'' says New York City Police Lt. Robert Louttit. His 25-member peddler task force made 3,500 arrests in Manhattan last year.

Lieutenant Louttit says the April ruling has made the enforcement job much tougher. Indeed, as an interim measure, the city's department of consumer affairs wants to add 12 of its inspectors to the enforcement effort.

Cusick says 50 vendors operating along the prime stretch of Fifth Avenue can take into the underground economy as much as $1.4 million a month: ``It's not a question of competition - it's a question of legitimate business.''

Though unlikely to sail through the New York Legislature while a war is on, a bill sponsored by state Sen. Roy Goodman, a Manhattan Republican, would repeal the 1894 exemption for disabled veterans and restore to cities the power to regulate all vendor activities.

Disabled veterans say they deserve special protection and that vending is better than welfare. Most supporters of the Goodman bill counter that disabled veterans have been more exploited than aided last April's court ruling.

The Fifth Avenue Association just this week hired two disabled veterans from a Queens shelter as sanitation workers. Other Fifth Avenue businesses may hire more as security guards.

Councilwoman Greitzer also proposes to help disabled veterans acquire newsstands by getting architectural pro bono design help and financial aid for the initial investment.

``Once you build a newsstand, you've got a going little retail business with virtually no overhead,'' she says. ``That's a much more meaningful thing to do for a veteran than just giving him a license to peddle somebody else's junk.''