Pols pushing mayor to sign Commercial Rent Tax reform bill

Council Member Dan Garodnick, standing next to the bill’s co-sponsor Council Member Helen Rosenthal (Photo by Sabina Mollot)

By Sabina Mollot

On Monday, Manhattan politicians and small business advocates gathered on the steps of City Hall to push the Commercial Rent Tax reform bill sponsored by Council Members Dan Garodnick and Helen Rosenthal.

This was the third public announcement in recent months about the bill, which so far the mayor hasn’t committed to supporting.

Garodnick said at this point, the Council has had a hearing on the CRT bill and although there’s been no vote yet, 38 of his colleagues have signed on as co-sponsors. Asked why there hasn’t been a vote, Garodnick said Council members usually first want to know if the mayor “will support it rather than veto it.”

Rosenthal later said, “We are optimistic that he will embrace it.”

The bill would raise the threshold that Manhattan retailers who pay the tax are paying in rent from $250,000 to $500,000 a year. Business owners located in the borough north of Chambers Street and south of 96th are currently made to pay the tax if they pay more than $250,000 in rent and the threshold hasn’t been changed since 2001.

Garodnick said it’s typical for Council members to have to fight for bills that impact the city’s bottom line. However, he’s argued that the reform would help 40 percent of the businesses paying the tax or roughly 3,400 businesses while only reducing the amount of revenue the city collects from the tax by six percent, or $52 million.

On average, Garodnick said the tax amounts to half of a store’s rent for one month, and at City Hall, he noted the mayor hadn’t included the reform in his executive budget.

“We’re urging Mayor de Blasio to give relief to small businesses in our borough and reform the Commercial Rent Tax this year,” the Council member said. “If you happen to be on 98th Street you don’t have to pay this tax but if you’re on 95th Street you do. Mayor, you cannot, must not forget about our city’s small businesses.”

Other elected officials also blasted the inequity of the tax for only applying to one part of one borough and spoke about how in their districts, mom-and-pops are suffering because of it.

“They could use that money to pay workers more or advertise,” said Council Member Margaret Chin. “This is about fairness.”

Town & Village reached out to the mayor’s office, but a spokesperson, Freddi Goldstein, skirted the question of hizzoner’s thoughts on the bill, only discussing relief for small businesses in general terms.

“We’re committed to helping small businesses thrive and continue to look for ways that we can help,” Goldstein said. “This administration has a strong track record of helping small business, including the reduction of fees and fines, expanding free legal consultation programs, and providing marketing support through our new initiative, ‘Love Your Local.’  We will continue evaluating this need in the course of the budget process.”

The bill has gotten plenty of support from other politicians, though. This week’s press conference came on the heels of 25 elected officials signing onto a letter to Mayor Bill de Blasio, urging him to support the CRT bill. Those signing included Comptroller Scott Stringer, Public Advocate Tish James, Manhattan Borough President Gale Brewer and Council, State Senate, Assembly and Congress members who represent the part of Manhattan where business owners are getting socked with the tax.

“The New York City we all know and love is disappearing before our very eyes,” the letter, dated Monday, May 22, said. The letter also went on to say that as rents have risen “dramatically” in the past 16 years, hundreds of small businesses became forced to pay the tax.

“These businesses were not intended to be subject to this tax, and for many of them, this tax can be crippling. A small store paying $360,000 in rent owes $14,000 just from the CRT alone — a cost that can make the difference between staying open or shutting the doors.”

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12 thoughts on “Pols pushing mayor to sign Commercial Rent Tax reform bill

  1. Here we go again. How many times do we have to hear Dan’s REBNY pitch to deflect from the real issue at hand, and that is small businesses disappearing every day because of non-renewal of leases or astronomical rent increases. This tax does absolutely nothing to help that.

    Seriously Dan, get lost and take your damn sham of a tax with you. I’m sure Mr Falzone and the Associated employees will be glad to show you the door on your way out. As I’ve said, I will support no candidate that follows in your footsteps on this issue.

  2. This is bill a non-starter and won’t do much to save small businesses anywhere in this city. For truly effective legislation, only the Small Business Jobs Survival Act (SBJSA) provides any realistic hope toward not losing what remains of the rapidly ever-dwindling number of Mom & Pops that are still managing to hang on. Until and unless Dan Garodnick and the other REBNY-owned Councilpeople (Chin, Cornegys, etc.) specifically answer what parts of that legislation they take issue with, as well as suggestions or remedies for same, I see them as nothing but the bought and paid for shills for Big Real E$tate they’ve always been. $ame REBNY talking points, different day. FWIW, REBNY supports this CRT reform bill— that standalone fact speaks volumes about who’s doing the representing and for whom in this one company town.

  3. Forget Taxes .. it’s the RENT and ONLY the RENT that matters for these businesses!!! #SBJSA NOW!

  4. REBNY owns the city council. Empty storefronts everywhere in the city. Chain stores that sell poorly made expensive garbage that even tourist are complaining about. Stop lining your own pockets city council and represent the people who live here, work here, and have small businesses here. PASS the SBJSA!!!! Otherwise your jobs are in jeopardy because we will vote you out!

  5. Empty stores all over Rosenthal’s district and what’s popping up banks and chain stores. NYC SBS has been a failure for years when it comes to helping small business find affordable retail space because they answer to REBNY. The local business improvement districts are a joke when you look at their boards and they consist of REBNY board members like Extell, L&M Development, Forest Ratner and other big high roller members. Dan’s little profile in the NY Times failed to mention that he loves Essa Bagel, but they were thrown out of their original retail space by Ron Moelis of L&M Development.

    • Exactly. In theory I am totally for the tax, but the tax reform bill does absolutely nothing to PROTECT SMALL BUSINESSES. This bill does not guarantee a lease renewal or fair rental rates, so the fact of the matter is that once a small business has an upcoming lease renewal we will see one of two things:

      1) Landlord does not renew. Small business moves out and space remains vacant until a large bank or pharmacy moves in.
      2) Landlord is “nice” and offers a renewal at a 400% increase. Small business moves out and remains vacant until a large bank or pharmacy moves in.

      My one simple question for Dan is this:
      Where is the protection for small businesses in situations like this, where the landlord gives no renewal option or jacks the rent by 400%?

      The tax does nothing if there are no small businesses left…

      • @Steve, Dan will remain deafeningly silent on this as he’s blinded by REBNY’s bucks, convinced they hold his key to higher office (see his East Midtown legacy monstrosity as but one example; his refusal to address, or make any suggestions or amendments to, the current SBJSA as another). Until this bill (SBJSA) is permitted to come to a vote, we’ll not see the true colors of the Councilpeople nor on what side their bread is truly buttered. It seems their donors are far more important to them than their constituents. Remember this when they run for office, touting all they’ve done for their communities. Sadly, these communities will be comprised of nothing but soulless, glass-sheathed ghost towns- strip malls populated with only chain pharmacies and chain stores, banks, CityMDs, nail salons, bars, and the occasional Shake Shake. No personality, no charm, no Mom and Pops, no reason to leave the suburbs to spend their money here since New York City will be reduced to nothing more than a suburban wasteland writ large. Tragic.

  6. The city needs to adopt formula business zoning that would limit the number of chain businesses (Chase Bank, Duane Reade, the GAP, fast food, etc.) in a particular zoning tract.

    Small, owner-operated, and entrepreneurial retail space keep up their property better, have more at stake than employee managers, and are generally more vested in the community’s well-being than their multiple outlet competitors.

    • I agree. This is something San Francisco figured out many years ago when they implemented zoning like you’re suggesting. In their case, a citizen’s board has the most substantial voice on these community decisions, keeping it more honestly representative of the electorate’s wishes (not those of bought and paid for pols). Sadly, the majority of the NYCity Council, and our mayor, are progressive in name only. They wouldn’t know how to veer from the Real Estate Board’s teet if their lives depended on it.

  7. I’m glad folks are seeing through this tax deal. It’s the rent, not taxes making the difference. Everything always seems to happen a day late and a dollar short. With so many of our neighborhood favorites already closed or closing, even with SBJSA passed, by the time it’s passed, how many of the small businesses we favored will be saved? Everything done just so late, late, late.

    • Very true Barry, and thank you, it’s good to see someone vying for political office that isn’t afraid of big RE when talking about SBJSA.

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