Huascar Aquino, a winner of “Cupcake Wars,” in front of his Hell’s Kitchen bakery with Small Business Services Commissioner Gregg Bishop (Photo by Sabina Mollot)
By Sabina Mollot
The city is throwing a legal lifeline to mom-and-pops by offering free legal help to some small businesses to help them negotiate leases.
On Tuesday, Department of Small Business Services Commissioner Gregg Bishop, along with Council Member Robert Cornegy, announced the program, which will receive $2.4 million in funding over the next two years.
The program is expected to help 400 small business owners a year who couldn’t otherwise afford attorneys, but Bishop said it can grow if the demand for free legal help is higher than expected. Attorneys, who belong to organizations like the Urban Justice Center and Brooklyn Legal Services Corporation, will be assigned to individual businesses to help them resolve disputes before they end up in court. However, the attorneys, who are expected to provide an average of 40 hours of services per client, will not represent businesses in disputes that do end up in court.
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.”
Stuyvesant Town’s Associated Supermarket is facing an uncertain future. (Photo by Sabina Mollot)
By Sung Soo Kim, President, Small Business Congress
Lawmakers claim proposed legislation will save mom and pop businesses. Small business advocates claim it’s a “Trojan Horse” created by the real estate lobby to keep status quo. Who is right?
For over 30 years I have pleaded with local government to pass legislation protecting our hard working small business owners from profiteers, unscrupulous landlords and greedy speculators. The past decades’ over-speculation in commercial real estate, bidding wars by franchises and banks and manipulation by warehousing storefronts, has wreaked havoc on the commercial rental market. Guided by big real estate campaign contributions, their friends at City Hall have remained silent and done nothing as the American Dream of our small business owners is being destroyed.
At first I was pleased to hear the commitments of Manhattan Borough President Brewer and Council Member Cornegy, to listen to the business owners and to pass legislation to save our businesses. Brewer said, “The mom-and-pop crisis has intensified with a fury.” CM Cornegy acknowledged numerous small and locally-owned businesses that many would describe as New York City institutions were forced to close or relocate as a result of exorbitant rent increases. Both lawmakers’ words sounded very encouraging and offered hope to small business owners who had become indentured servants to their landlords.
But upon analyzing their proposed solution to end this crisis and stop the closing of long established businesses, I have become saddened for the future of our struggling business owners. Their proposal is an insult to the desperate business owners whose survival depends upon fair and just treatment from government’s offering a real solution to end the crisis. The Brewer/Cornegy proposal is no solution in any way and would not save a single small business if passed into law. In fact, their proposal to extend the lease period for one year at 15 percent rent increase, allowing the business more time to find a new location, would, instead, actually help landlords and make the crisis much worse. Rent gouging and oppressive lease abuses are the root of this crisis and their solution addresses neither.
The rent gouging and oppressive lease abuses have been going on for many decades. Many business owners have already been forced to move several times. This gentrification tornado of greed has cut swaths of destruction across many neighborhoods and in every borough. There are no more “safe” locations to move to in NYC, because our government has done nothing to regulate the out of control rents. If a storefront is vacant on a busy main street, it’s because the long established business was forced to close when the landlord refused to accept a fair rent which would have allowed a reasonable profit for the business. I predict that if this weak Brewer/Cornegy proposal is passed, should a business want to stay in their neighborhood, the only choice is to go to another landlord and bid against other local businesses, making the crisis worse.