Council proposes ways to combat ‘high rent blight’

Small Business Committee Chair Council Member Robert Cornegy with a City Council attorney and Council Member Donovan Richards (Photos by Sabina Mollot)

Small Business Committee Chair Council Member Robert Cornegy with a City Council attorney and Council Member Donovan Richards (Photos by Sabina Mollot)

Suggestions include restrictions on chain stores, penalties for long vacancies of storefronts

By Sabina Mollot

The ongoing saga of New York City’s mom-and-pops facing extinction was the topic du jour at the City Council chambers on Friday, when a hearing was devoted to possible solutions. There were suggestions from Council members on ideas like restricting the ability of chains from opening (though this was shot down by city planners) and discussion on how to get businesses to open in neighborhoods that are currently underserved.

At the hearing, which was co-chaired by Small Business Committee Chair Robert Cornegy and Zoning and Franchise Sub-Committee Chair Council Member Donovan Richards, the Council members brought up “high rent blight,” a term coined by Columbia Professor Tim Wu to describe the warehousing of retail spaces by speculative landlords that’s led to many storefronts remaining empty for long periods.

“As Frank Sinatra once said, ‘If you make it here you can make it anywhere,’” said Cornegy, “but it seems that now real estate is so hot that even businesses who’ve made it (are closing). People have less and less interaction with bank tellers and we have banks on every block. We have commercial corridors with artificially inflated prices.”

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Brewer throws lifeline to mom-and-pop shops

Manhattan Borough President Gale Brewer discusses her legislation at the Upper West Side location of Halal Guys. (Photo by Sabina Mollot)

Manhattan Borough President Gale Brewer discusses her legislation at the Upper West Side location of Halal Guys. (Photo by Sabina Mollot)

Legislation would make it mandatory for landlords to negotiate with retail tenants

By Sabina Mollot

New legislation could curb a trend of mom-and-pop businesses being replaced by banks and chain stores.

Manhattan Borough President Gale Brewer said she’s drafting legislation that would make it mandatory for a building’s owner to at least allow a retail tenant a chance to negotiate to keep his or her space.

“The future of street level retail stores and restaurants — I call them storefronters — has begun to look murky,” Brewer said on Monday. “Every day, the press has another story about a kids’ clothing store or a shoe repair shop closing to make room for a chain or a bank.”

The bill, which is being sponsored by the City Council’s Small Business Committee Chair Robert Cornegy at Brewer’s request, along with giving tenants a chance to negotiate, would also give the tenant the option of a one-year lease extension with a maximum rent increase of 15 percent. Additionally, a building owner, if planning on evicting the tenant, would have to give the tenant notice of that intention 180 days before the end of a lease. “So businesses will have enough time to find new space and make a transition, hopefully in the same neighborhood,” said Brewer.

Brewer also said she wanted to help business owners threatened by rent increases the option of purchasing the storefront through “condo-ization.”

“Many of the long-standing small businesses that are here today are only here because they had an opportunity to buy the building,” she said. “There was a time where you could buy a building, but that opportunity today is dim.”

While this is technically already possible under current law, Brewer said there are ways the city could be helping the process along. It may be possible, she added, to create a condo if the business portion of the building is split from the residential portion. Additionally, if 51 percent of the property or more is occupied by the business, it could qualify for a federal Small Business Association loan of up to $5 million.

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