Opinion: Rethink the approach to help small businesses

By Carlina Rivera and Jennifer Sun

When Tamika Gabaroum decided she finally wanted to open her restaurant, Green Garden in the East Village, she understood it wouldn’t be an easy task. But Tamika, a former public health advocate with the Peace Corps who served in UN Peacekeeping Missions in the Democratic Republic of Congo, was used to a challenge. What she couldn’t expect was her landlord, Raphael Toledano, disappearing months after signing her lease, and a new landlord arriving with demands of higher rent. And she could have never guessed that Toledano had harassed the previous long-time tenants out of their stores as well.

The challenges facing Tamika and other small business owners in New York City are well known. Rising commercial rents, competition from corporate franchises, and the growth of online shopping have forced an alarming number of mom and pop stores to close their doors.

In many community districts, vacant storefronts have become a common sight, turning once-thriving retail corridors into ghost towns. When a small business closes, it is not only a loss for their neighborhood’s local economy, but also for its vibrancy and character.

If we want to create an environment in which small businesses can thrive, we need to provide owners and entrepreneurs with a suite of tools that give them an equal footing in our economy.

Information, data, and education are all a part of the equation. The city’s Department of Small Business Services (SBS) must continually move beyond its role as an outreach-based agency and work in partnership with local CBO’s to provide small businesses with more tangible services. That is why we pushed for the passage and enactment of a City Council package of legislation that finally requires SBS to complete an assessment of each neighborhood’s small business economy, determine how many vacant storefronts exist citywide, and provide small businesses with training programs that include a comprehensive web platform that provides clear direction on best operating practices and regulatory compliance.

But knowledge can only take an entrepreneur so far. The City Council has made progress by making resources more readily available to small business owners, and in District 2 we have taken this a step forward by assembling a unique partnership between government and community advocates to create a pioneering loan program called the East Village Small Business Revitalization Fund.

Announced in August and run by Renaissance EDC, an affiliate of Asian Americans for Equality, the loan will provide East Village business owners with the opportunity to borrow up to $50,000 with fixed interest rates dramatically lower than most business owners could secure through traditional lenders.

These loans can go towards restocking inventory, purchasing new equipment or furniture, marketing, storefront improvements or renovations, payroll, and many other typical high cost capital needs. And most importantly, Renaissance will work with owners to analyze business plans, strategize on goals, and obtain in-house training on the latest retail tools.

This model of protecting and cultivating local companies is what our city and state Economic Development Corporations should be pursuing, instead of chasing large corporations that will only starve out mom-and-pops further.

And in the fight against these multinational corporations, we are developing our own homegrown apps to connect local shoppers with local enterprises. Village Alliance, a local Business Improvement District, is launching an app that connects residents with exclusive sales and information about local small businesses.

Alone, each of these tools may not save a business. But together, this multi-pronged approach provides a mom-and-pop with the community support they need throughout the life of a business. And we need these stores and restaurants to survive. They are essential parts of the local economy and the lifeblood of our communities. They make New York City neighborhoods unique, like no other in the world. And if we don’t continue fighting to spread these tools citywide, our communities will be left to a dreary future of corporate franchises and vacant storefronts.

Carlina Rivera is a New York City Council Member representing District 2. Jennifer Sun is the Co-Executive Director for Asian Americans For Equality.

20 thoughts on “Opinion: Rethink the approach to help small businesses

  1. this has to be the most shameful comment by an elected official on the small business crisis.
    More real estate lobby talking points to give political cover to lawmakers who have done NOTHING to save a single business. All of these proposals were created by REBNY to do one thing , keep the status quo. If Rivera is so concerned with the future of small businesses why did she remove herself from the Small Business Committee and thus turn the future of all the businesses over to the pro real estate owner Chairman Mark Gjonaj.
    What good is any initiative or law if the business closes? In time of crisis you first priority must be to save the businesses with the best solution to protect them from landlord greed and abuse. Everyone knows it is giving business owners rights when their leases expire and there is only one bill that does that, Small Business Jobs Survival Act. Stop rigging for REBNY and serve the community.

  2. Pieces like this are fairly nettling. No mention of the Small Business Jobs Survival Act. This is what the ‘rethinking’ is about. The message at least for small business: do not look to the Democrats on the City Council to provide any legislative protections.

    Well, why not? Why is it possible that residential protections like rent control & rent stabilization can be deemed ‘constitutional’ but protections for small business can not? (Not a fan of Citizens United, but if businesses are people, why don’t they merit protections? Rent protections.) Am thinking in particular of all the restaurants and other favorite small stores that have been forced out in the last 10 years.

    The article above talks about resources. Fine. Realistically, data resources and the like can’t mean much in these cases. And the loans mentioned seem like a temptation for desperate small business owners to avoid facing reality and just get deeper into debt.

    If commercial landlords are raising the rents beyond as a business’ ability to generate more sales, that business will close. Take Vamos for example. There wasn’t a time when I passed by that this place wasn’t teeming with customers. So far it remains vacant.

    So let’s get back to the real question and try to avoid needless, useless palliations like the above article.

    SBJSA had a hearing. Where is it today? Why is there no follow through? If there is support but some concerns, what’s keeping the Democrats from resolving those concerns making changes and advancing the bill?

  3. In your district, Cucina De Pesce, Neptune Diner, Paquitos restaurant, three of cups .. ALL closed for one reason and one reason only .. the inability to negotiate a fair RENT! All these other things you mention are just NOISE until we assess the real issue .. exhorbitant rents .. SBJSA (Small Business Jobs Surivial Act) would fix that. The Real Estate owned City Council is literally letting our beloved city be erased before our eyes!

  4. Formula business zoning, which limits the number of chain and franchisee businesses that can occupy a given zoning tract, and that has been ruled constitutional in at least two federal circuits, would change the economics of business leasing in the city and shift the demand curve in favor of small businesses to lower rents. It is well-established in many municipalities, including San Francisco, and would preserve small businesses against the kind of “mallification” we see in higher-end retail districts.

    It would help, too, if SBS better promoted its MWOB program (vote “Yes” on 3, BTW), which offers generous credit terms to would-be entrepreneurs.

    • Zoning has nothing to do with commercial lease renewals only new leases and would not save a single business. Yes , maybe 15 years ago it would have helped but today banks and chains are on every corner and in some cases even they are closing. The west side on several streets enacted zoning years ago and was a monumental flop. Empty stores on every block attest to this fact. Why can’t
      people just admit the truth that without giving rights to small business owners when their leases expire all are in jeopardy of closing.

      • I don’t oppose SBJSA, I just think formula business is likely to be more successful. Both could be passed; they’re not mutually exclusive.

    • The only municipality losing more jobs and small businesses than NYC is San Francisco. That doesn’t support your claim.

      • We’re going the way of San Francisco, but that’s not because of their admirable efforts to save Mom & Pop businesses. It’s more like absurdly high taxes and an incoherent policy toward the homeless both cities share.

    • Zoning, LOL, you are two decades too late, AND we would have to re-zone the entire City at once, which can NEVER happen. And finally, the number one reason for the closings is simple; the unfair lease renewal process. Local businesses need fair rents and at least ten years to warrant investing in their businesses. All the rest is REBNY Rigging the city right at REBNY HALL! Corey said, we have a crisis, said the SBJSA>THE JOBS ACT is the solution to review and pass, and COREY has now let over as year pass and done absolutely NOTHING to stop the closings or pass the JOBS ACT!
      If you have nothing better to offer besides useless bills that do not save one business or one job all together, then PASS THE JOBS ACT NOW!

      • There’s no reason not to pass both. But SBJSA has been around at LEAST 20 years and has never passed (although countless pols have won office spouting their support for it.)

        It has also never had to withstand a court challenge citing the takings and due process clauses, though several scholars have opined it would. Still, opinions of legal scholars aren’t precedent. Formula business zoning is supported in at least two federal judicial circuits.

        Finally, formula business zoning shift the supply curve to lower rents and provides the additional intangible of small businesses no longer having to compete with chains who often have lease “keep well” agreements that are far more appealing to landlords than the credit of a small business.

        • You need to get your facts straight and not repeat the false narrative of REBNY. First it has not been around 20 years. In 2009 the entire Small Business Committee were sponsors of the bill and ready with 32 sponsors to vote it into law. Only a bogus legal roadblock by Speaker Quinn stopped a vote. Second NY had a commercial rent control law for 18 years that was challenged every year by real estate and lost every court case , several in the highest NYS Appeals court. It is the most legally vetted bill in council history and always found to be fully legal. Where are the legal scholars at the hearing on the bill? Lets use common sense, if the Jobs Act had even one legal issue the powerful real estate lobby with countless lawyers would have challenged the bill at the hearing, and they did not raise the legal issue once. Why even talk about any substitute bill to
          the Jobs Act when the bill is the best and only solution to give rights to small business owners needed to negotiate fair lease terms.

        • @savenycjobs

          You are the one with your facts wrong. The central elements of SBJPA -commercial rent control – have been kicking around for AT LEAST 20 years, going back to when C. Virginia Fields was Manhattan BP.

          Second, although the scholars have weighed in on the law, and said it would survive judicial scrutiny, it has not actually been upheld by any court because the law does not yet exist.

          As I said, I have no objection to an SBJSA, per se, and and acting it and formula business zoning are not mutually exclusive. However, the latter has been upheld in the courts in two federal districts.

  5. One might wonder how there’s no mention of the #SBJSA, despite its sitting (still unchallenged, and still unvoted upon) in the City Council the entirety of Carlina Rivera’s tenure. REBNY talking points only get you so far, Carlina, why no mention of the rent-jacking that’s resulted in the retail ghost town which is your district? Until small businesses have the opportunity to negotiate terms regarding lease renewals, there will be no improvement, only more loss of businesses, jobs, tax revenue, and of character. You know this and yet still spew this crap? Shame on you! #SoDisappointed #RememberTheTechHubSellOut

  6. With all due respect to the authors of this opinion piece…these er-empresses wear no clothes.

    Important when reading it to understand where they’re coming from and connecting their ‘apparatchik’ written script and its remarkably disingenuous model of ’helping’ shuttering stores and small businesses. ‘Dressed’ in embarrassing formulaic and shopworn (pun intentional) remedies, it honestly insults the intelligence.

    Council Member Rivera-no slouch at opportunism has obviously had help in crafting convenient words-as she parrots her peer at the City Council…Speaker Corey Johnson. Both Rivera and Johnson are evading the real issue of predatory landlord-take-all usurious rents. It ain’t hard…and it ain’t complicated…but they‘ve chosen to make it opaque and sidestep real mitigation…namely passing the Small Business Jobs Survival Act Bill which they’ve buried under a whole lot of phony sanctimony.

    REBNY-aka the lobbying group Real Estate Board of NY, along with self-interested developer ‘stakeholders’ on the Boards of so-called Business Improvement District BIDs , and their pay-to-play manipulation of this Administration, their appropriation of power via the quasi-governmental “non-profit” gangster organization known as the NYC Economic Development Corporation, continue to call the shots and have manipulated willing politicians whose financial campaign survival relies on their deference-no matter how immoral nor consequential.

    But-I don’t want to leave out collaborator Ms Sun who co-wrote this piece in my comments. Suffice it to say, when her CV includes a stint with the aforementioned NYCEDC –readers need to connect the dots.

    “From 2008 to 2014, Jennifer served as Senior Vice President at the New York City Economic Development Corporation (EDC), spearheading planning and development projects in East Harlem, Northwest Bronx, and the Hunts Point Food Distribution Center.” https://www.aafe.org/jennifer-sun

    After decades of delay, circa 2019 Council Members are again stalling to legislate- refusing to require equitable commercial leases even as thousands of stores are closing and hundreds of thousands of jobs are lost…that’s the bottom line.

    So, when you see your local small favorite store shuttered…think twice as you go to vote for these pols –remember, it’s on all of us to own it.

  7. The city’s immigrant owners are the forgotten victims of the small business crisis. Why does Councilwoman Rivera keep saying her bills will help small businesses when the small businesses need rights to survive. None of the immigrant owners want or need help from a government that favors big landlords. Immigrant owners are treated like second class citizens and that is ok with Rivera. Why is it acceptable to Councilwoman Rivera that immigrant owners are targeted to be extorted for their life’s saving by unscrupulous landlords, or giving month to month/one year leases or forced to pay their landlords property taxes? These are the real problems destroying the American Dream. Immigrant owners are not buying the lie, “that doing a little is doing enough for immigrant owners facing a crisis to survive.”

    Luis Tejada, Exective Director of Mirabal Sisters Cultural and Community Center.

  8. Not everyone can have an illegal rent stabilized apartment for decades Carlina. Some people have to work for a living.

  9. How shameful can you get CM Rivera? Really now. You acknowledge that the useless stall tactics of the five sham bills may not save a business, but you put shade on your rigging mates at REBNY Hall as if “together” they provide support? Who are you kidding, certainly not NYC’s mostly immigrant small business owners who are the largest job providers in our city. Let me say it for you, not one business without a fair long term lease renewal will be saved by all your programs “together” as you imply. NOT ONE! No one is fooled by your cover story for the truth, the RIGGING by REBNY at REBNY(City) Hall! Main street businesses don’t need more delaying studies, or loans, or apps, or marketing, or regulatory guidance, if they can’t get rights to at the very least, a fair lease renewal process and for at least ten years which every business owner knows is necessary in order to have enough time to make a return on their investment. That is: renovation, upgrading their business, modernizing, promotion and more which takes usually 5-7 years to pay off and then actually earn a living. Stop telling business owners what REBNY says they need and give them what they are crying out for, rights! Fairness, basic reasonableness on both sides. THIS IS A CRISIS, losing 1,200 and more businesses EACH month, and losing 10,000 to over 11,000 jobs every month! Stop the distraction and PASS THE JOBS ACT NOW! Every JOB lost is on Speaker Corey Johnson and every council member not screaming and fighting every day to PASS THE JOBS ACT!

  10. City Council Speaker Corey Johnson owes an apology to every small business owner for allowing the real estate lobby, REBNY, to hand pick Council Member Mark Gjonaj to chair the Small Business Committee. Johnson appointed Gjonaj to fulfill the dictates of REBNY Chair Bill Rudin and former President John Banks that the Small Business Jobs Survival Act providing commercial tenants rights will never be passed.

    Appointing Mr. Gjonaj to guard the interests of small businesses is tantamount to placing foxes to guard the hen houses.

    Sung Soo Kim, the Godfather of immigrant businesses and author of the Jobs Act, called on Johnson to restore democracy to City Hall and rise above the corrupt control of REBNY.

    Johnson ironically stated in The Villager, “Sadly, our mom-and-pop stores are in crisis…Many landlords are opting to let their storefronts sit vacant, holding out for exorbitant rents…We cannot allow this trend to continue. Government has a responsibility to take action before it’s too late…”

    Selecting Gjonaj as Small Business Committee chair is indefensible and an insult to every desperate small business owner and every citizen who believes in good government. Johnson claims he “is a proud sponsor of the SBJSA,” but chose a staunch opponent of the Jobs Act or any laws regulating commercial landlords. Mark Gjonaj, who owns his own real estate company, is the most pro landlord legislator in NYC government. His choice is a brazen conflict of interest.

    In his 2017 race, Gjonaj raised $1,295,000 mostly from big real estate and the most of any City Council candidate.

    Gjonaj organized two rallies on City Hall steps under the disguise of saving small businesses. I attended both. They were a charade promoting only REBNY’s false narrative that small businesses’ problems were fines and government over regulation. There was no mention of the main cause of businesses closing, which is commercial tenants have no rights in the unfair commercial lease renewal process producing sky high rents and price gouging them out of business.

    My op ed in the Daily News exposed John Banks’ lies about the bill being commercial rent control, and pointed out why the bill is what’s best for NYC’s economy and the 99%.

    Why is REBNY and the big landlords it represents so terrified of this bill, and why has REBNY prevented a vote on it ever since 1986 when Ruth Messinger first introduced it?

    Making this legislation the law in New York City will mean the transfer of billions of dollars, and the power that goes with it, from super-wealthy property speculators, developers and landlords to small businesses, their employees and the local economy. REBNY’s billionaire bullies and racketeers are afraid of that possibility. The rest of us should welcome it.

    Ray Rogers, stopREBNYbullies.org 718-852-2808

  11. The City Council seems to have no capacity to do the right thing and move the SBJSA to a vote. Why noodle around the edges of a problem when you could actually do something substantive?

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