By Sabina Mollot
Last month, members of the City Council introduced a package of bills aimed at helping small businesses. They ranged from creating a registry of vacant retail spaces to having landlords sign a “certificate of no harassment” before getting construction permits to providing training to help small business owners digitally market themselves.
Since then, Town & Village reached out to operators of three local storefront businesses to ask if they thought the bills would help them — and if not, what would.
In response, Carole Husiak, who owns the Ibiza Kidz clothing shop in Stuyvesant Town, said she liked all the bills.
That said, Husiak doesn’t feel the bills address what she considers to have been her biggest problem as a business owner for the past 30 years — real estate taxes.
“That’s what put me out of business on Broadway,” said Husiak, of the original Ibiza Kids store near Union Square. “We don’t even own the space and yet I’m paying real estate taxes. I’ve never understood that.”
Husiak ended up leaving the Broadway store before her lease ended, costing her two months’ rent she’d paid as a security deposit.
“The rent was high, but that’s what we agreed to in the lease,” said Husiak, “but the real estate taxes were astronomical.” In Stuy Town, she said, they are lower, but still high. Her old space meanwhile remained vacant for over a year after she moved out.
The other problem she faces is competition from online retail, in particular Amazon. For this reason, she was in favor of a proposal, that, while not included in the City Council package, has been proposed by Manhattan Borough President Gale Brewer. At the hearing on the bills on March 18, Brewer suggested some sort of “legacy rent regulation” for businesses that are over 20 years old.
Husiak said that sounded good to her. “I’ve been in business over 20 years in different locations, paying into the city,” she said.
Brewer had also suggested reducing sales taxes for transactions made at brick-and-mortar stores and increasing taxes for those conducted through e-commerce.
“I can’t even tell you how many times a day I have to tell my customers I have it at the same price as online,” said Husiak. “And they say, ‘Oh I’m on Prime, so I don’t have to pay shipping,’ and I’m thinking, ‘It’s in front of your face. Just buy it from me.’ They’re all going to e-commerce.”
Natasha Amott, owner of the kitchen supply shop Whisk, which has a storefront on Broadway in Flatiron and two locations in Brooklyn, was at the City Council hearing. Later, she told Town & Village she thought that some important issues were just touched on or not discussed at all.
“I was glad to hear (Council Small Business Committee Chair Mark) Gjonaj acknowledge the rent crisis,” said Amott. “But of the specific proposals coming out of the Small Business Committee last Monday, the majority are aimed at the small wins. What we are ultimately facing is a rent crisis and that requires achieving much bigger wins.”
One of the bills, proposed by Gjonaj, is aimed at having the city’s regulatory agencies evaluate current codes and laws to see where provisions or rules can be repealed and whether businesses can be given a period to cure the violations rather than pay fines.
Amott thought this one should be passed right away and also supported two bills surrounding vacant storefronts. One would create a registry (and issue fines to landlords who fail to register after 90 days). The other would create a publicly searchable database.
“I gather that the two bills are laying the groundwork for a bigger potential win which would be a vacancy tax from Albany,” said Amott. “A land use tax like this tries to get at making land use more efficient while generating more revenue for the city. Cities are experimenting with it; New York City should be too. I don’t think we would need these bills were it not for the fact that commercial rents have become so distorted. It is a need borne out of a dire reality at this point.”
As for the vacancy registry bill, Amott said it should include a chance for a property owner who fails to register by the required deadline to cure the problem before being hit with a $1,000 fine.
“Obviously, there will be some landlords who only rent out one commercial space and may not know of the rules,” she said. “They may be immigrants; they may be elderly. The city’s intentions should be to focus on the landlords who follow the ‘extend and pretend’ notion.”
Like Husiak, Amott called real estate taxes a major problem and appreciated that Gjonaj brought up the subject and suggested a cap on property tax assessments.
“So in short, it is great to see that the Small Business Committee has so many bills on the table,” said Amott. “There is energy right now to make change and we need to do all we can to capitalize on that energy.”
The Flatiron location of Whisk currently has a for-rent sign in the window, which Amott said she couldn’t comment on.
Meanwhile, Cathryn Duhigg, the executive director of Cauz for Pauz, a nonprofit thrift shop on First Avenue, said she liked all the bills, in particular the one that would offer digital marketing training and another bill aimed at providing affordable retail at properties where the landlords are receiving $1 million or more in city subsidies. She also thought the vacancy registry would be helpful.
“I’m all for letting you know what’s available,” said Duhigg, who, three years ago had to move the store from its original location on East 23rd Street when the owner decided to rent to an urgent care center instead. “It would make it much easier if there was a big database,” she added. “I wouldn’t have to deal with brokers. I could go directly to the owner and say, ‘The place has been there six months. Could you give me a break?’”
Nonprofits, she noted, are supposed to eventually get back their real estate taxes, but overall she agreed that taxes in general are the bane of retailers. “The taxes are tough for people; they should lower it,” she said.