Oct. 26, 2015 By Christian Murray
With mom and pop stores throughout Manhattan and Brooklyn disappearing at a rapid pace, local advocates are backing a City Council bill that they believe will prevent similar hemorrhaging here, before hefty rent hikes take their toll.
The bill, called the Small Business Jobs Survival Act, aims to provide commercial tenants –including artists with studios – with more clout at the bargaining table when their lease comes up for renewal. Furthermore, it requires landlords to provide greater notification if they don’t intend to renew a lease due to the potential for development.
The bill is being pushed by a group called #SaveNYC that claims that New York’s small businesses continue to close at unprecedented levels and are being replaced by big-box stores such as banks and retail chains. Other groups such as TakeBackNYC and the Artist Studio Affordability Project have also taken it up.
On Friday, Councilman Jimmy Van Bramer said that he had signed on to the bill.
He said that the bill would help protect small businesses and artists in good standing.
“We know that there are a lot of successful businesses that have improved properties,” Van Bramer said, adding that it would be unfair if they were then thrown out at the end of their lease with little notice due to a hefty rent increase.
Sunnyside Chamber of Commerce president Rigo Cardoso said, “we are grateful to the Councilman for supporting our members when we need it most.”
The Chamber began backing the bill earlier this year after it started to gain momentum in other parts of the city.
Jeremiah Moss, who leads the SaveNYC campaign and who has been an outspoken advocate for the bill, told the Sunnyside Post in June, “I’m sick of New York turning into a suburban shopping mall.”
Moss, who goes by a pseudonym, claims that many family-run businesses that have been in operation for decades are being forced to close when their leases come to an end.
“They’re not closing because business is bad,” Moss said. “They’re closing because the landlords are doubling, tripling, even octupling the rents — or simply denying lease renewals,” he added, citing Manhattan examples.
“With no penalties to stop them, landlords leave the spaces vacant for months or years, waiting for a national chain, a bank or a high-end business to pay the asking price of $40,000, $60,000, $80,000 a month,” Moss said.
The bill, which currently has 27 Council sponsors, is a form of commercial rent control. The bill only applies to commercial tenants in good standing, such as those that have paid rent on time and have met the terms of their lease.
The significant provisions include (click here for bill):
1) The tenant has the right to renew the lease
2) The bill requires new leases to be a minimum of 10 years
3) If the landlord and tenant are unable to negotiate terms (such as the rent) a “mediator” will be brought in to render a “non-binding” opinion
4) If the parties are still unable to agree, the matter goes to arbitration
5) The arbitrator’s decision is final and is “binding”
6) If the tenant fails to pay the amount required by the arbitrator, he or she is able to stay until a landlord finds another tenant
7) The landlord must provide the existing tenant with the opportunity to match the terms of the prospective tenant
8) If the landlord wants to demolish a building or rebuild the premises when a lease ends, the landlord must notify a tenant one year prior to the termination of the lease so the business owner can make preparations to leave
9) If the landlord wants to operate his or her own business out of the location after a lease ends, he or she must notify a tenant 180 days before termination of the lease that it won’t be renewed.
The argument put forward by advocates of the bill is that it will help protect the owners of mom and pop stores, many of whom have put their life savings into their businesses.
Van Bramer said that the bill’s provisions are reasonable. “None of them are extreme,” he said, adding that “this is about fairness.”
“I agree with giving business owners better notification and working out fair renewals for people who have paid their rent on time for years and years.”
He said the bill is also about protecting communities.
“You get to know these men and woman who own these cafes, pubs and wine bars and they can be your friends and neighbors…places where good memories are made.”
He said that real estate owners can still make a good profit, which they are entitled to make.
The Bill’s Detractors
The real estate industry and several public officials oppose the bill.
Some commercial property owners say they face difficulties too. Many landlords — particularly the smaller ones – have put their life savings on the line to buy a building and they argue that it is not fair to block their ability to maximize the value of their property.
Furthermore, the real estate industry argues that the bill could distort the rental market which would damage commercial property values.
The bill could also put many landlords in a jam if a tenant fails to abide by an arbitrator’s binding decision and does not leave the premises.
They claim that it would be hard to lure prospective tenants to a space currently occupied by an existing tenant — since they would know that they would miss out on getting the space if the existing tenant matches the terms of the lease.
Furthermore, some — such as Manhattan Borough President Gale Brewer – question whether the bill is even constitutional since it deals with property rights.
The supporters of the bill claim that it is constitutional based on the legal opinions they have sought.
Councilman Costa Constantinidies, who represents Astoria, has not signed onto the bill, citing these legal issues.
“I’m committed to helping small businesses in Astoria,” he said. However, he added, he is looking for solutions that won’t be challenged in court and overturned.
“I will look at any bill that has a realistic chance of protecting small businesses,” he said, adding that Astoria is a neighborhood built on such businesses.
He said that he has been helping small businesses through the creation of the Doe Fund, which brings street cleaners to commercial corridors, as well as adding funds to the Central Astoria Local Development Coalition, to be used to advertise and help retain businesses.
Meanwhile, Alicia Glen, the deputy mayor, said last week that the Small Business Survival Act is no quick fix, Capital New York reported.
“It is a very complicated issue, like most issues,” Glen reportedly said. “And I’m not sure that necessarily adopting commercial rent control would lead to solve the problem that people think the problem is.”
She argued that “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.
Sunnyside Calls For Protection
In the past year, a number of small businesses in Sunnyside have closed. They are expected to be replaced by ground floor retail space and apartments.
King Boulevard, SSS Video and Azteca Restaurant all closed last year to make way for a development on the corner of 48th Street and Greenpoint Avenue.
Meanwhile, Center Cinemas and dentist Dr. Arthur Kubikian were notified that their leases would not be renewed in order for the 43rd Street/Queens Blvd development to rise.
Rudy Prashad, the former owner of Center Cinemas, said that while he was aware that the movie theater’s future looked bleak, he said that he was only notified five weeks before the lease ended that it would not be renewed. He said he would have liked to have known in advance so he could have planned better for his departure.
Pat Dorfman, director of the Sunnyside Chamber of Commerce, said that “Jimmy as Majority Leader signing on to support the SBJSA is a shot in the arm.”
Dorfman said, “we need this bill passed, before we are paved over and have only chain drug stores and restaurants able to afford the rents. Current law leaves small business and professionals on the street in the real estate boom.”
Meanwhile, Van Bramer said, “I support the overarching goal of supporting mom and pop businesses and artists…and we want to do everything to help them.”
LT06 the bill if it passes will be watered down. Real Estate interests have not even begun their atttack.
My business was struggling for two years against the buildings department approving a paper required for our liquor license. We could barely hang on and lost almost $100,000 in revenue. When I met Jimmy Van Bramer he came into my restaurant and said he would act on helping us immediately and we couldn’t even get a call back from his office for three months.
Now all of a sudden after so many business have closed in the area he’s concerned. Thanks for opening your eyes Jimmy.
These businesses are too small to fail.
Now that a large number of small businesses have closed and the Landlords have no desire to lease to anyone without an excessive monthly fee, let me be the first to say to yo Mr. Van Bremer “You’re a day late and a dollar short”. Except in your political war chest that is now brimming with Developers money.
There is a big difference between protecting small business and deferring to them on this scale.
While the current situation is heavily slanted in the favor of owners, these requirements simply tip the balance in the opposite direction instead of creating an equitable system.
A right to renew? A guaranteed decade? Forced arbitration? Now the tenant is the landlord.
That’s all fine and good for the crowd that complains every time something changes – in one of the planet’s most dynamic cities – but not good for everyone else.
Things changed organically in NYC for decades and no one put up any protest. It was normal, natural change. This change was engineered by the financial debacle, the Giuliani and Bloomberg administrations, the REBNY and corrupt public servants. That is why we complain about the changes taking place now.
I wonder if the fact that Councilman Constantinidies received $200k from “Jobs for New York” (Real Estate Board of NY’s Superpac) last election, has anything to do with the fact he won’t sponsor this bill.
Constantinides saying he is looking for a solution to save his merchants is and insult to all his merchants and their employees. He signed a resolution to have Albany pass a law that would give landlords tax credits for not raising commercial rents sky high. But it is useless because it is voluntary for the landlords and everyone knows except him that the commercial tenants pay the landlords property taxes.
What a disgrace to pass off the future of our community , jobs, small businesses to corrupt Albany who is controlled by real estate.
LT06 I agree with you 100%. A guaranteed decade and guaranteed right to renew is absurd! Look at rent stabilized residential buildings………Tenants can verbally abuse landlords and staff, disrupt other neighbors with noise, etc yet every year or 2 they are guaranteed a lease renewal at a rate some bleeding heart liberal says is fair??? The whole system stinks, that is why there are so many slumlords out there. There is no other way to be given the rent stabilization circumstance.
Before the haters chime in, I AM NOT A RENT STABILIZED LANDLORD. I would take some of these building for free!! I do however believe in free market which is the basis for what this country was founded on. There are some groups that need help and assistance but that is for the government to cover, not private landlords.
excuse my typo I would NOT take some the these buildings even for FREE!
If you think the market is free, come to a seminar I’m having on the sale of some beautiful bridges over the East River. You can have income for life with even part ownership!
Read “What They Don’t Tell You About Capitalism,” or some title like that. It is an eye-opener.
The SBJSA is hardly “deferring” to commercial tenants! After all, landlords will still get their rent increases; they just won’t get to summarily kick out tenants in good standing, or be able to hit them with rent increases that double or triple their rent burden. It’s amazing to me how distorted the rental market in this city has become, when such a mild bill, which simply seeks to restore some equity to commercial tenants, is painted as so unfair to landlords.
You need to read the bill to understand that it is fair and equal to both parties.
Firstly, the present lease renewal process is not ” heavily slanted in favor of owners”, its 100% in favor of landlords and this bill just levels the playing field to give enough leverage so negotiations are in good faith. Without the right to renew , there is no negotiation. 10 years is not long for commercial or for a business that invested 100’s thousands to start, the longer the lease the more opportunity to grow and create jobs. This is not forced arbitration unless the parties can’t agree on terms , otherwise its the same dispute resolution as used around the world in all contracts today.
Kudos to CM Van Bramer for taking a strong stand for mom & pops and working artists in his district. The crisis for small business, arts and manufacturing in our city is mostly a HIGH RENT crisis. Simply giving commercial renters basic renewal rights, a decent rental term so they’re not hit with huge rent hikes every year or two, and the ability to negotiate rent increases via mediation and arbitration is a matter of fair play. Right now the market is hugely distorted in favor of landlords, and it’s destroying our city.
I can’t tell you how much I miss Step-By-Step Hardware, which built itself into a neighborhood essential step-by-step over many years. Those people were devastated when they had to leave. Thank goodness Sunny Homebasics on 39th Avenue is helping to fill the void. But, Step-by-Step was a jewel crushed by the real estate bubble.
This would’ve been nice to have for Sunnyside Center Cinemas and now PJ Horgan’s.
Well done Council Member for standing up and actually doing something about our neighborhoods getting destroyed.
@anono “Property ownership” is not realistic for many of these Mom & Pops who are scraping by. Do you think plopping down north of $5M for a building is realistic? Come back to Earth and join us, please.
The mark of leadership is how an elected official deals with a crisis. CM Van Bramer showed both leadership and courage to stand up for the business owners as well as the arts community and NYer’s who love their neighborhoods as see the destruction high rents are causing. With REBNY having controlled the city’s economic policy for decades and gained enormous wealth which they shared at campaign time thru their many Pacs, it is not easy for elected to stand up against them. CM Van Bramer showed his progressive values and did the right thing to save countless businesses and jobs. On the other hand CM Constantinides showed he is on the side of the landlords and wants to keep the status quo even if it means every business in his district is rent gouged out. He claims to be looking for a solution , but what he is doing is repeating REBNY’s only talking point, legal issues, as an excuse to “do nothing” in the face of the crisis his merchants face. Since when does the threat of court action stop legislatures from doing their jobs? CM Constantinides merchants should demand to see the legal case law given him to prove the bill has legal problems . If he fails to produce anything they should demand his resignation from office.
As Legal Counsel for the the Small Business Congress, I have done the research. The bill is completely constitutional because it serves a public purpose and uses the reasonable means of arbitration.
DeputyMayor Alicia Glen saying ‘businesses fail because not good businesses’ thrown out with no notice like blaming Hurricane Sandy victims for the storm .
To say nothing of the real estate bubble created by the market crash of 08, which these sharks are taking advantage of before it collapses.
It’s nice to see the JVB is standing up to real estate interests…HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA….
JVB is on the up and up.
They have these protections available already! Its called Property Ownership!!
The Politicians have totally screwed up the Residential rental market. Don’t let them do the same to the Commercial marker
If you want all the benefits of owning in NYC, such as a huge market, you have to take some of what you think is down side, too.
add to it they are taking away parking spaces like crazy on the south side, what a mess where the old masiss was at 39th st and greenpoint, who designed that crapppp?
A lot of these stores are too small as is. Sometimes I can’t even fit past other people in the aisles.
That is part of the charm of NYC. Small stores allow small business. Built to a human scale, not an industrial scale.
But the city shouldn’t force stores to be smaller.