By Sabina Mollot
Recently, a couple of City Council members proposed ideas on ways to combat “high rent blight” and promote retail diversity, or at least, keep the city from completely getting overtaken by chains.
This was at a hearing where the council members’ ideas, such as putting legislative restrictions on chain stores and imposing penalties on landlords who warehouse storefronts, were shot down by city planners.
According to the planners, as Town & Village previously reported, many stores that appear to be chains are actually individually owned franchises and as for lengthy retail vacancies, sometimes, the planners argued, they are not necessarily intentional on the part of property owners.
Meanwhile, a few legislators, including Council Member Robert Cornegy, the small business committee chair who’d chaired the aforementioned hearing on September 30, have come up with some legislative ideas to deal with the problem already.
Though none have been passed into law, there are currently a few bills pending as well as in early stages of development that aim to give a break to the city’s remaining mom-and-pops.
One was discussed by Manhattan Borough President Gale Brewer at the hearing.
The legislation, which she said is in the works with Council Member Corey Johnson, would eliminate property taxes small business owners must pay in much of Manhattan, from Chambers to 96th Street.
“It would make businesses more competitive in the battle to remain in their space,” she said, adding, “We also like to have something to look at. Looking at a bank streetscape cannot continue.”
A call to Brewer’s office later requesting more details was not returned. Meanwhile, a rep for Johnson declined to discuss the bill beyond saying it “aims to address the huge tax burden businesses face.”
Absent from the discussion at the hearing, however, were two other retail related bills. One was the Small Business Jobs and Survival Act (SBJSA), prompting those in favor of the legislation aimed at giving businesses automatic ten-year lease extensions, to hold a rally before the hearing.
“It’s important to pass the SBJSA… The ten-year lease extension is definitely a game changer for small businesses,” said Harry Bubbins of the Greenwich Village Historic Preservation Society, as he stood outside City Hall.
Full disclosure: Town & Village has endorsed this legislation in an editorial.
At this time 27 members of the council support the bill, though it’s yet to have a hearing. The goal of the SBJSA is to give existing commercial businesses an automatic ten-year lease extension.
Its prime sponsor is Annabel Palma, who this week blamed the delay on the real estate industry.
In an email, she said, “There’s a constellation of forces that have stalled the bill; advocacy groups for the real estate industry have been effective in lobbying council leadership to remain apathetic on accelerating the legislative process in rendering a definitive vote for, or against it.”
Asked why she thought the mayor has distanced himself from it — a mayoral spokesperson has previously told Town & Village he was looking into other ways to help small businesses — Palma said she didn’t know.
“I can’t speak for the mayor’s administration,” Palma said, “but I can say that if there was more transparency from the council and the mayor on this issue, there would be an impetus to move forward with this legislation.”
As for what, if anything, she could do about the bill’s lack of movement, Palma admitted there wasn’t much she could do within the council.
“At this point, I’m attempting to galvanize public interest in this bill to compel my colleagues, and the mayor’s office to act,” she said.
Meanwhile, the bill’s supporters are a vocal bunch; at the hearing, they held up fliers in the Council chambers as Brewer spoke about her tax break legislation, since she is not an SBJSA supporter. Brewer has previously said she doesn’t believe the bill, which critics say has legal issues, will ever be passed.
As an alternative, in 2015, she and Cornegy introduced a bill which was also not mentioned at the September 30 hearing.
That bill would make it mandatory for a landlord and a retailer who can’t come to a lease renewal agreement go through mediation and if necessary arbitration though the arbitration wouldn’t be binding. If the two parties still can’t reach a deal, the retail tenant would then be allowed to stay on another year with a 15 percent rent increase.
Asked later if this bill was no longer being pushed, a spokesperson for Cornegy, Damon Lipscomb, insisted there is still an effort to pass it.
Lipscomb said that bill has yet to be formally introduced due to “legislative hurdles,” due to its being too similar to another piece of legislation by another council member. However, he said that other bill is not the SBJSA, and that Cornegy is trying to work with his colleague.
“It is not because of a lack of trying,” Lipscomb said.
Meanwhile, Council Member Dan Garodnick has also proposed a tax break bill, which is separate from the Brewer/Johnson one. He’s expecting to have a hearing held on the bill, drafted last year, in the next couple of months.
The bill would exempt commercial tenants paying less than $500,000 per year in rent from having to pay commercial rent tax. Those paying between $500,000 and $550,000 per year in rent would receive a sliding scale credit against the tax owed. Lastly, the bill would require all commercial tenants who pay $400,000 or more per year in rent or receive $400,000 or more from a subtenant to file a return with the Department of Finance.