Hearing Kicks Off Fight Over Bill To Rescue NYC Small Businesses

NEW YORK CITY HALL — A controversial, decades-old proposal to protect New York City's small businesses from skyrocketing rents got a City Council hearing Monday, at which some lawmakers suggested that the bill may not be a cure-all.

First introduced 32 years ago, the Small Business Jobs Survival Act would establish protections for commercial tenants including a right to 10-year renewed leases, a prohibition on landlord retaliation and a process for negotiating lease renewals that could involve arbitration.

Monday's hearing before the Council Committee on Small Business was the first the proposal had gotten since 2009, though not for want of support from lawmakers and advocates who argue it would throw a life preserver to the mom-and-pop shops being driven out of business by high rents.

But some Council members had questions about whether the bill as it's currently written would be the best way to solve the problems.

"This is not the silver bullet," Council Speaker Corey Johnson said. "This is looking to correct the problem that we’ve all acknowledged here today."

A rally in support of the act before Monday's hearing drew more than 100 people to the front of City Hall, including the measure's original sponsor, former Manhattan borough president Ruth Messinger. Behind them a long line of people waited to get inside ahead of the hearing, many of them wearing blue hats that read, "Vote No Commercial Rent Control," as the bill is sometimes known.

The bill's supporters say it's not commercial rent control but rather a way to give small-business owners a fighting chance in a real estate climate in which landlords have vast power over their tenants. About 20 percent of all Manhattan retail space is currently vacant, The New York Times reported last month, and business leaders said rent is a top concern for many merchants.

"That is what the market bears: 'I want a Starbucks here, I want a Citibank, but thank you for your service.' This is the thanks that we get," said Giovanni Taveras, the founder of the New York State Veteran Chamber of Commerce.

But Johnson expressed concern about the fact that the bill doesn't distinguish between commercial tenants, meaning it would treat massive corporations the same as a local bodega.

"I think it’s hard to have this conversation when currently white shoe law firms … would qualify for arbitration under this bill," Johnson said.

Councilman Mark Gjonaj (D-Bronx), the Small Business Committee chairman, questioned whether the small merchants the measure aims to help would have the time to dedicate to an arbitration process. And Councilman Stephen Levin (D-Brooklyn) asked about how the bill might impact affordable housing developments that are subsidized by commercial space.

Among the bill's detractors are some business groups — including some comprising many small businesses, such as the Manhattan Chamber of Commerce — who argue it could limit businesses' flexibility and discourage landlords from ever renting to them.

It could also have disparate impacts on different parts of the city, said Lena Afridi, the director of economic development policy at the Association for Neighborhood and Housing Development, a coalition of community groups.

"Parts of it might work but across the board, it's not going to work for everybody," Afridi said.

The measure also has a powerful enemy in the Real Estate Board of New York, which said it would have a "catastrophic impact on our local economy." The group's president, John Banks, reportedly threatened a lawsuit if the bill is passed.

The bill's backers, though, seemed ready to take REBNY to the mat in their fight to get the bill through the Council.

"This is the biggest David and Goliath story — the small business community versus REBNY — since Jane Jacobs took on Robert Moses," said David Eisenbach, a Columbia University professor who backs the measure, referencing the community activist's successful fight against New York's master builder in the 1960s. "Guess who won that battle?"

(Lead image: David Eisenbach leads a rally in favor of the Small Business Jobs Survival Act outside City Hall on Monday. Photo by Noah Manskar/Patch)