Rumble at the Hudson Guild:
Commercial Rent Control Smack Down
BY DONATHAN SALKALN
Those that didn't make it to the forum called 'The Death & Rebirth of Mom-and-Pops,' hosted by the Chelsea Reform Democratic Club, missed a major verbal wrestling smack-down. The October 20th event, promoted by CRDC Exec.VP Judy Richheimer, brought together two NYC heavyweight advocates of commercial rent reform, along with a very raucous crowd.
On the main card, Lucian Reynolds, an urban planner from the office of Manhattan Borough President Gail Brewer, wearing the colors of the "Small Business, Big Impact" faced off against Attorney Steven M. Barrison, vice president of the Small Business Congress wearing the colors of 'The Small Business Jobs Survival Act' (SBJSA). The under-card starred Eli Szenes-Straus, Deputy Chief of Staff of NYS Senator Brad Hoylman. Attendees at the Elliott didn't hold back taking sides while expressing rage of the continued loss of beloved and much needed local businesses, due to astronomical rent increases.
Judy Richheimer set the scene: "Over the last thirty years, venues that make New York City special, either destination shops or mom and pops, that speak directly to clientele of neighborhoods, have been evaporating. That street where there was a friendly grocery store, a nice fish shop, cute cafe, I'm seeing a 7- Eleven, a Duane Reade, a bank, some national chain store, or something that can be found anywhere. We all see it."
Lucian Reynolds opened the evening's event, pushing the study Small Business, Big Impact. Reynolds explained that it was the result countless sit downs with small business owners, merchant associations, and various government agency officials. The meetings, often tag-teamed with Bernadette Nation, a director at NYC's Department of Small Business Services (SBS), explored ways to help small business owners survive.
The resulting study is filled with many services that one would hope our electeds to already provide, such as promoting businesses to join local merchant associations, helping small businesses with uncooperative inspectors, navigating complicated bureaucratic regulations, billing and fines, and even urgent help after unforeseen disasters with up-and-running pitfalls, such as inadequate insurance and an onslaught of inspections (Reynolds said SBS was instrumental in getting B&H Dairy (a favorite soup luncheonette of this writer) back-in-business after the tragic 2015 Third Avenue gas explosion).
Reynolds told the gathering of Brewer's initiatives to create business lists as a source of services and products for city agencies and also making sure that scaffolding is not being used as a harassment tactic to close a business. Said Reynolds, "There is a gap between the people who need resources and resources. A bridge between the businesses and the resources is incredibly useful and the Borough President’s office as been acting as that bridge."
Reynolds also spoke of legislation to tackle commercial rent reform, such as raising the minimum level of revenue when the Commercial Rent Tax kicks-in that is presently set at $250,000 (sponsored by Gail Brewer and City Council Small Business Committee Chair Robert Cornegy), the requirement of landlords to give business' 180 days notice of a rent increase, an arbitration period of a year with a limit of a 15% limit rent increase, and zoning changes that eliminating banks and chains from taking over large swaths of street level storefronts. As NY Council member for the upper west side (2002-2014), Gail Brewer championed such zoning laws which are now in place today producing and protecting boutique size stores.
In referring to the all or nothing attitude of SBJSA supporters, Reynolds pointed out, "Having legislation is important but it shouldn't stop us from doing all the other things. I hope everyone sees the merit in fighting at all angles to make progress. Advocating for people not to participate in other processes that we can use to organize small businesses and bring them more services is counter-productive. We would prefer being part of a larger conversation. This would allow us to look past some of the rhetoric that's been put out about the SBJSA vs. Everything else."
Steve Barrison came out swinging like a veteran that has taken all the punches but still gets up fighting, "It's like New York's small businesses are in the emergency room needing open heart surgery and the city is doing everything else but dealing with the dying patient.” He continued, “This is a true crisis. We went from 2,800 small businesses closing a year at the end of Mayor Koch's term to 3,200 when David Dinkins finished his term. When we went to Giuliani it jumped up to 5,800.” Barrison continued, as if thrusting jab after jab, “When we went to Bloomberg, and he broke the mold, it went up to 9,000 to 10,000 a year, and now under the progressive Mayor de Blasio its up to 1,100 to 1,200 mom and pops closing every single month.”
Barrison went on, "We’ve been attacked by the Borough President and others as saying that our bill, the Small Business Jobs Survival Act, has been collecting dust for over thirty years. Lets talk about what's been collecting dust and whats not.” (Barrison’s words reminded me of Trumps thirty-year rhetoric about Hillary). He continued with jabs, "All three of the city’s proposals that have come about recently —rezoning, the tax incentive, and the mediation period where the poor small business owner gets thrown out anyway —are word-for-word the same proposal brought forth by Limousine Commission under Mayor Koch. All were dismissed back in the eighties by small business across this city."
Barrison explained to the audience that the Small Business Jobs Survival Act, would call for the landlord to name a price for a new lease, give the commercial renter an option to negotiate, plus a ten year lease, and if the rent amount went to arbitration, the business owner would get a fair shake. It would also eliminate under-the-table extortion payments for long term leases that Barrister claims are prevalent across the industry. As Barrison represents over 185,000 small businesses city-wide, he's heard of under-the-table payments of $50,000 or more for 10 year extensions of bodega-sized businesses and upwards of $1,000,000 for spaces of 2,000 sq. ft and above. “It happens. There’s no e-mails or phone calls, But it happens,” he said, opening a shame, shame, shame can of worms upon this city.
In answering the constant body shots by critics that the Small Business Jobs Survival Act was unconstitutionality, Barrison fought back with vigor, even distributing to ring-side seats with a long list of city hearings dating back to 1988 and through present, that logged testimony that SBJSA was constitutional. "For 18 years there was commercial rent control in this city. Seven cases went all the way to the Court of Appeals by big real estate, and the court said you have to balance interests of the general welfare of the public with the interest of private industry." Barrison continued, "It's like all the people that say 'Let's get rid of the Affordable Care Act.' and replace it with nothing. Sure it has flaws, but it doesn't have legal issues. The Supreme Court even said that."
A member of the audience named Bill lit up the debate with a question aimed squarely at Lucian Reynolds. “What precludes you of not only doing the little things but also supporting the other bill that would stabilize the rent? I’m grateful to your helping out with B&H Dairy, and also with Gail out there on 23rd street after the explosion, but one thing doesn’t seem to have to do with the other?
Responded Reynolds: “Gail Brewer does not support the Small Business Jobs Survival Act and that's been here her position since March when the report went out. The report outlines a different proposal of legislation to address the rent issue.” Reynolds brought up the fact that he’s not a lawyer and couldn’t comment on the constitutionality of SBJSA, but then brought up another grievance as if he was a well-versed lawyer. “The Small Business Jobs Survival Act intends to keep businesses in place, and it does that well, but the issue is that it doesn’t specify that it only applies to small businesses, but all commercial leases. We need to be specific about who were trying to help here. Are we trying to help Ernst & Youngs or are we trying to help specifically small businesses (this writer worked for a very big company that obtained city tax relief worth millions and millions of dollars just to keep their jobs in NYC).
Barrison responded, “Our bill helps all businesses, not just small businesses and we’re proud of that. The majority of small businesses are not on the ground floor. There are a lot of little businesses in those large skyscrapers. We want to help everybody. Your grocery store, your chain store. The greed has gotten so great, that they can get away with so much, that they just keep going. Banks are out, drug stores are out. The big powerful Starbucks have had enough and are moving to the side streets. The list goes on and on. This bill will stabilize main street so it isn’t a constant flux where you have an empty store on every block across all five Burroughs.”
Reynolds said that SBJSA doesn’t provide help to small businesses, as touted, when the building’s landlord decides to demolish the building or when “they can simply do a major overhaul. We all hear this after a residential tenant moves out. Landlords renovate and de-stabalize the apartment.”
“Demolitions? Teardowns?” Barrison responded, “That’s the first time anyone has ever brought that up as a reason that the Small Business Jobs Survival Act is a problem. I’ve never seen a lease that doesn’t have a clause in it that if your going to rip down your building you give a reasonable amount of notice and then everyone is out. As far as a landlord to do major renovations to throw out the tenant? There might be some creepy landlords that do that, but you have to act in good faith, just like in residential situation. Nothings perfect, but if we save 98% of businesses or even 75%, that’s good.
NYS Assembly Member Richard Gottfried got into the mix, tag-teaming with Barrison. “Saving retail businesses is enormously important and the council bill (SBJSA) makes tremendous sense. If the bill is too broad to some people and I think it needs to be, let’s not negotiate against our selves. Let’s start with a very broad bill. If some categories of businesses end up getting excluded, I think that would be too bad, but we shouldn’t be trimming the bill down and negotiating with our selves.
AM Goodridge, an activist for the $15 Minimum Wage, spoke about how chain stores are inundating communities while taking away livable wages of employees that are supportive of the neighborhood dialogue and replacing them with minimum wage workers. “The rents are too high and the wages are too low. All these big chains offer cheap labor and that is totally unacceptable to our society!”
“NYC’s Theater District has been destroyed! “ said actress Pamela Dayton. “Cafe Edison was evicted. And then Pearl River went from $100.000 a month to half a million a month. These were successful businesses that were either denied a lease or offered insane increases. Retail Rezoning only puts protection for the new businesses.
Gloria Sukenick brought up the fact that Fashion Design Books, a book and art supply store that caters to Fashion Institute of Technology College. and is in the midst of its campus on 27th Street, is closing at the end of the year. Said Gloria, “Their rent went from $3,000 a month to 30,000 a month.” Hopefully it won’t be a fast food chain.
FIFTH ROUND: The TKO
Past CRDC President Roberta Gelb gave a round-house blow that brought cheers and jeers: “While Gail Brewer is holding these discussion groups, it seems like they’re giving violin lessons so they can fiddle while the rest of New York City burns. The fabric of this city is dying and Gail Brewer is holding these circles. Why not go down every road we can go down. Why does Gail Brewer stand in the way of the Small Business Jobs Survival Act?”
Eli Szenes-Straus, Deputy Chief of staff to State Senator Brad Hoylman, spoke of Hoylman’s co-sponsoring of bill S.00328, introduced by Senator Lavalle in 2015. It would give municipalities the authority to enact zoning to protect the historic character, community aesthetics, distinctive community character, and the maintenance of diverse and vibrant commercial areas. “Municipalities should morally and economically be able to say what kinds of spaces are in their streetscapes, and how they effect the neighborhoods around them. This bill would give all New York cities the permission to do that.” Hoylman is also considering legislation to make it difficult for landlords to keep their storefronts vacant. Like London, which disallows landlords to writing off a business loss due to a lack of a commercial tenant after 3 months, Hoylman is considering drawing up similar legislation.
The CRDC Club membership also voted in favor of resolutions sponsored by CRDC Executive Committee Member Dion George for:
VOTER RIGHTS FOR NY CITIZENS ON PAROLE:
And VOTER RIGHTS TO LEGAL U.S. PERMANENT RESIDES IN NYC:
And this writers blog on the above meeting: