Tensions are mounting between the pawn business and city police.
Marc Kaye had to do something drastic when his children’s tuition bills at Columbia and Harvard came due just as his consulting business hit a dry spell.
So he pawned his Picasso.
An art collector, Mr. Kaye brought a sketch by Pablo Picasso with the title Three Nude Women Near a Window, to a firm called Borro, a pawnbroker whose sophisticated digs 18 floors above Third Avenue resemble a bank or law office with Andy Warhol drawings of John Lennon and Freddie Mercury hanging on the walls. A mere 12 hours after Borro appraised the sketch, recently valued at $65,500, money hit Mr. Kaye’s bank account and he paid the tuition bills. A few months later, his business recovered and he bought back the Picasso.
“I was in just a little pinch, and this was an elegant and discreet way to get cash,” Mr. Kaye recalled.
Borro is one of several pawnshops sprouting around Manhattan that cater to the wealthy. Earlier this year, a London-based pawnbroker called Suttons & Robertson opened a shop here, and last year New York Loan Co. opened an office in the diamond district. New York Loan is owned by a Beverly Hills outfit that calls itself Pawnshop to the Stars.
The growth in high-end pawnshops is part of a boom underway in a business that historically has catered to folks forced to part with possessions for rent money. There are 493 pawnshops in the city, according to the Department of Consumer Affairs, and since 2010 the number of pawnbrokers or secondhand dealers has grown by 50%, according to the New York Police Department. (Pawnbrokers make loans against merchandise; dealers just buy and resell stuff.) The action is attracting Wall Street, with Borro earlier this month landing a $112 million credit line from private-equity firm Victory Park Capital, whose executive board chairman is former Connecticut Sen. Joe Lieberman.