September 10, 2013--The $289,500 Hot Dog

One of my favorite big city guilty pleasures is slipping out once in awhile for a hot dog and Coke. A Sabrett's dog from a street-corner vendor. They come piping hot on a roll smothered in ballpark mustard and sauerkraut. Though they may not have any nutritional value, and are likely take years off one's life, once or twice a year it doesn't get any better than to sit out on a park bench and munch away on two or three.

And you can't beat the price. Depending on the where, Sabrett's cost about $2.00 each with the soda just a buck. In a neighborhood luncheonette, by contrast, a tuna on whole wheat and a fountain Coke is at least $12.00.

Down in my neighborhood--the West Village, at carts surrounding Washington Square Park--they go for a bargain dollar-fify each while up at Central Park they cost $2.00 or more.

Now I know why there is this price difference.

According to the New York Times, city authorities charge vendors an annual fee to set up in a specific location because about 10 years ago they needed to step in to regulate the situation as vendors were at war with each other. Literally.

Pushing their carts, they would show up before daybreak to stake out a favored loaction and then squat there, fending off others who had been set up there the day or week before. There was much pushing, shoving, and cursing; occasional serious fisticuffs; sometimes stabbings and even gunshots. No surprise, there were also allegations that the Mafia was involved.

Now, every five years, the best spots are auctioned off. There are 20 locations around Central Park and licenses there go for anything from $125,170 a year at the Harlem end of the park to a staggering $289,500 by the entrance to the zoo.

That means, to break even, with dogs at $2.00 each, a vendor who paid this fortune to be set up near the sea lions and monkey house has to sell nearly 150,000 to just break even. If one adds the costs of ingredients, that number is much higher.

With this annual cost of doing business how can any of these guys turn a profit? Some vendors report that they can gross $2,000 on a summer Sunday but take in virtually nothing when it rains or during the winter.  Maybe all the profit comes from selling bottled water at $2.00 a pop

Somehow it must pay.

Or is this yet another example of Big Apple real estate, where everything is inflated beyond normal reality? Where apartments that sold 10 years ago for $400,000 are now worth $2.0 million. Or more.

Location, location, location is the name of the game in Manhattan real estate and it must also be true when it comes to Sabrett's carts. A lot of people after all do come to the Central Park zoo to see the polar bears.