Borough President, Advocacy Groups at Odds Over Commercial Lease Proposals

clinton street for rent

These storefronts, once home to Culturefix on Clinton Street, have been vacant for many months.

The fate of small business in New York has been an especially hot topic this year. Most everyone agrees that spiraling commercial rents are making it almost impossible for many “mom-and-pops” to survive.  But the disagreements about the best solution to the problem seem to be growing sharper by the day.

This week we’ve received a flurry of emails from groups such as the Small Business Congress, #SaveNYC and the Artist Studio Affordability Project. They are all stepping up opposition to a proposal from Manhattan Borough President Gale Brewer that, if approved by the City Council, would set up a mediation system for rent renewals between commercial tenants and landlords. The groups have been pushing an alternative plan (the Small Business Jobs Survival Act) that also includes mediation but adds mandatory arbitration when necessary.

In a press release, #SaveNYC spoke out against a series of roundtable discussions Brewer’s office began hosting on the topic of small business survival this week:

#SaveNYC lends its support to the argument against the May 6 “fact-finding” roundtable on small business, sponsored by Manhattan Borough President Gale Brewer. A grassroots movement dedicated to protecting and preserving the diversity and uniqueness of the urban fabric in New York City, #SaveNYC officially endorses the Small Business Jobs Survival Act and rejects all other plans currently on the table. No proposed legislation currently offered by city or state politicians will save or protect a single small business in New York City, with the exception of the SBJSA. The status quo proposals being offered only provide non-binding negotiation and mediation, with one-year extensions before the tenant will be forced to move or close. They leave business owners powerless without the basic commercial rights they need to negotiate fair lease terms and remain in business. These are not solutions to the city’s small business crisis, but only ways of maintaining business as usual.

The Small Business Jobs Survival Act (SBJSA) has been knocking around the City Council in various forms since the mid 1980s. It’s always been vigorously opposed by the real estate industry. Brewer, a former Council member who backed earlier versions of the bill, believes it’s time for a new strategy. This week, we asked her office to elaborate.  Here’s the response:

The fact is that SBJSA relies on arbitration that’s binding for one side but not the other – an unbalanced and unworkable system. And by creating a right of first refusal for existing tenants, SBJSA could even make it tougher for new small businesses to find space of their own. I agree with the supporters of SBJSA that small businesses, new and old, need a fairer lease renewal process. I’m pushing a workable plan that will make a difference for both existing and new small business owners, rather than rallying around a bill that’s spent decades collecting dust. We’re proposing to institute a mediation period, require landlords to notify small business tenants of their intentions six months before a long-term commercial lease ends, and provide a one-year lease extension option as a safety valve. These are commonsense solutions that can pass, and would protect small businesses that right now live in a world where they can find out that their rent is tripling without enough time to find an alternative in a red-hot market.

#SaveNYC, of course, disagrees with the Borough President’s characterization of the bill. Arbitration, they say, applies to both parties and is a time-tested process successfully used in sports, government, labor negotiations, etc.  The Small Business Jobs Survival Act is meant to give commercial tenants rights that they now lack. Brewer’s plan, #SaveNYC argues,”does the opposite, giving no rights to the business owners except for one year to find a place to move.”

As for the observation that SBJSA has “spent decades collecting dust,” the group points out that the bill attracted 32 Council sponsors in 2009. “Only a false ‘legal roadblock’ claim that the bill had legal issues, stopped a vote on the bill certain to pass unanimously,” said #SaveNYC’s Kirsten Theodos.

19 Council members have signed on to SBJSA. 26 votes are required for passage. About 3500 people have signed an online petition in support of the legislation.

 

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5 comments to Borough President, Advocacy Groups at Odds Over Commercial Lease Proposals

  • Anon resident

    What really needs to be addressed is how awful and useless the NYC Small Business Services staff are? What the heck is Director of Capacity Building?

  • JEng

    NYCTV covered Carroll Gardens for their Neighborhood Slice series and it was positive coverage on Italian New Yorkers and included an old timey Orchard Street-style clothing store on Court Street.

  • I______m

    -> JEng
    FYI – the time has come for you to STOP LEAVING comments that have ABSOLUTELY NO RELEVANCE TO THE STORY.
    this is a point of information as perhaps you do not understand the purpose of the comments section…….

  • JEng

    Well my followup post to you did not seem to have posted.

    I will try one more time but otherwise I will just be left to seem to have no defense to your accusation that I am off topic justifying removal of my comments (it’s fine I won’t repost):

    http://www.neighborhoodslice.com/2015/04/21/carroll-gardens-brooklyn/

    This was a lovely episode (the only one I watched) but Marieta’s is a time sensitive type of retail that is much lamented on boweryboogie but if you look at that retail, it may not be appropriate for eternal protection.

    Furthermore, the City Council is way too broad in their proposed protection – without addressing income-based, merit based appropriate protection and the issue of lucrative subleasing and collection of key money by tenants (I have the pdfs of the ads).

    And here’s the problem with that for the retailers – if this govt is so antibusiness now starting with property owners – just remember that other American cities have implemented networked cash registers to assure proper reporting of revenue – it does not make sense that this city government and recent press coverage on nail salons is NOT going to end up in some kind of legislation. The Public Advocate started mentioning nail salons early on because of safety issues but I think that customers must have observed something about the lucrativeness of nail salons and it ended up on the govt’s radar somehow.

    I did notice on realdeal.com’s Deal Sheet section that for many years, nail salons had no problem paying very high rents in some parts of Manhattan and they were notable for doing so but because of the agit prop in NYC against landlords, I have personally heard from Chinatown brokers what this article (translated by Google Chrome browser) propagates that retailers are the slaves of the building owner and this comment was made by someone who looks forward to owning their own nail salon:

    http://www.worldjournal.com/3235437/article-%E6%A5%AD%E4%B8%BB%E5%A3%93%E5%8A%9B%E5%A4%A7-%E5%B0%8F%E5%93%A1%E5%B7%A5%E7%9B%BC%E5%8F%97%E4%BF%9D%E9%9A%9C/?ref=%E7%B4%90%E7%B4%84

    I don’t know how Margaret Chen is going to write the law when key money is being mentioned now in litigation for 68a Mott Street which means true market rents are much higher than reported (and that my mother is really charging a very low rent for an ongoing vacancy) but the fake rent is going to be used to claim so many things about owners. Everything is used to blame owners who CANNOT afford their real estate taxes and have to raise rents where they can to pay those city imposed taxes.

    It’s a scandal. I think the govt and press are refusing to read between the lines when it comes to both residential and commercial tenants as long as the landlord is depicted as awful – who laid those real estate charges on us in the first place?

    “But now Amy has begun to try to rent a small piece of space at other stores open my own business, her words turned into “work to the landlord.” Because of high rents, fierce competition, she felt the pressure of the boss. “But the Chinese restaurant too hard to do, manicure or better.”

  • JEng

    Look the govt does not need to keep up appearances with us by creating these faux pro-business services. We understand how it works – and small owners have no power but it is not going to stop with small property owners – they just needed to effectively neutralize us through impoverishment and unpopularity first – but the retailers are going to catch it and frankly, having these small business service things just waste money – it’s not going to be a proper defense if there is a lawsuit and there will never be a federal prosecution of what this city does. NEVER.

    So why bother spending money on this fake kevlar? Business owners are not articulate – the small property owners will not say boo and be afraid to get on the city’s radar (my family is already in the govt’s sights because our taxes are way overassessed and the press went after my dad’s reputation and those reporters went on to positions with the city or in Hong Kong so….) and the big owners won’t say anything because things actually work out for them. That’s life. This is a taking of private property and a deletion of actual governance and discipline in society packaged as the opposite.