Deputy Mayor: City Supports Small Business But Not Commercial Rent Control

The topic of small business survival got some attention yesterday at the Municipal Art Society’s “Summit for New York City.”

Last spring, Deputy Mayor Alicia Glen told WNYC Radio she was interested in figuring out how to save New York’s “cool, funky” mom-and-pop shops. At the time, she said the administration was working on some proposals to address the problem of skyrocketing commercial rents. Glen said they would be unveiled within a couple of months. At the summit yesterday, she was asked about commercial rent control as a possible solution. Let’s turn to Politico New York for a recap:

“It is a very complicated issue, like most issues,” said Glen. “And I’m not sure that necessarily adopting commercial rent control would lead to solve the problem that people think the problem is.” In April, Glen said she’s committed to preserving “cool, funky New York,” even as she warned against over-romanticizing the past. On Thursday, she again warned of the dangers of wearing rose-colored glasses, while also arguing, “there are some small businesses that are probably going to just fail because they’re not very good businesses,” and therefore shouldn’t necessarily be protected… Glen said said the city has taken measures to create more transparency in the retail market for small businesses, and to prioritize local businesses in the developments the city helps underwrite. She also argued that in some real estate developments, smaller tenants quite simply won’t work. “I do think that there are neighborhoods that are changing rapidly and real estate prices are at a place where commercial landlords in particular and landlords of large residential buildings are needing to get more traditional credit tenants in the bases of their building in order to make the math pencil,” said Glen.

At the moment, there’s no concrete proposal for rent control on the table. But real estate interests say a bill being pushed by small business advocates in the City Council would have the same effect. The Small Business Jobs Survival Act would set up a mediation and arbitration system for commercial rent renewals. Its proponents, including the advocacy group Take Back New York, say the legislation simply aims to give mom-and-pop retailers a fighting chance.

This week, Sunset Park Council member Carlos Menchaca became the 25th sponsor. He’s chair of the immigration committee. It takes 26 members to pass legislation in the New York City Council, but Speaker Melissa Mark-Viverito has so shown no signs of bringing the measure up for a vote. While intimating four months ago that there could be a hearing on the issue, one has not been scheduled. The Real Estate Board of New York is strongly opposed to the bill, which it calls an illegal violation of property rights.

Manhattan Borough President Gale Brewer also attended the Municipal Art Society Summit. She’s proposing alternative City Council legislation that would require mediation for tenants and landlords, but not binding arbitration. Another idea that has been raised is a property tax credit for landlords who agree to keep independent businesses in place. Asked about the idea, Brewer noted that it would require the approval of the New York State Senate, which is heavily influenced by the real estate industry. “How would that go down?,” Brewer asked. “I don’t think that would happen.” State Sen. Daniel Squadron expressed similar sentiments in our most recent Small Business Survival report.

The de Blasio Administration has not weighed in on any of the small business proposals currently languishing in the City Council, nor has it announced substantive plans for dealing with the issue of commercial rent escalation.

The Lo-Down has launched a year-long reporting project on Small Business Survival. To read our full coverage, click below.