“Testifying at a packed City Council hearing, Gregg Bishop, the commissioner of the Department of Small Business Services, said the left-leaning administration has serious reservations about a measure being pushed in the Council that would require landlords to offer 10-year lease renewals to small businesses and go to arbitration if the two sides can’t reach a deal.
“We are concerned about potential unintended policy consequences of the proposed legislation that could make it harder for all commercial tenants — existing and new,” said Bishop.
He warned that the arbitration process mandated in the bill could actually hurt small businesses.
“Though this legislation attempts to create a system to provide fair lease renewal terms, it is important to note it does not guarantee favorable terms for the tenant,” Bishop said. “The party that makes the strongest case – often the party with the best [monetary] resources – is likely to have a more favorable outcome.”
The remarks did not sit well with some Council members and small business owners in the audience.
Many said the city should be doing more to protect small businesses and should act to fill empty storefronts plaguing many neighborhoods.
When pressed by Council Speaker Corey Johnson on what the city is doing to fix the problem, Bishop said “I don’t think there is a silver bullet.”
However, he did say the city is considering a “storefront registry” and a “vacancy tax” that would penalize landlords who leave stores empty for lengthy periods.
Mayor de Blasio first suggested such a tax in March.
Johnson conceded the Council bill is “not… perfect,” adding “if you’re Goldman Sachs, you are treated the same way as a bodega. That does not make sense.”
But he said some kind of resolution is required quickly.
“CVS and Starbucks – I’m not disparaging them, but they don’t hold our keys,” he said. “They don’t sign for our packages. We don’t know their owners. They aren’t why people visit New York and why people want to live here.”
Commercial rent control ended in 1963 when a state law mandating it expired.
The new bill is an offshoot an earlier measure proposed more than 30 years ago by former Manhattan Borough President Ruth Messinger.
Councilman Ydanis Rodriguez (D-Manhattan), who is sponsoring the new version of the Small Business Jobs Survival Act, claimed his bill is “not commercial rent control,” adding it “is about immigrant rights … and improving the small business climate in New York City.”
Prior to the hearing, dozens of small business advocates – including Messinger – rallied in support of the bill outside City Hall.
“Huge rent increases put small businesses out of business, damage quality of life and take away jobs – threatening the fabric of life in this city,” she said.
The Council hearing was attended by more than 200 people, and 120 signed up to speak.
The New York Building Congress, which represents the construction industry, echoed the de Blasio administration’s concerns.
“This legislation severely limits property owners from making independent decisions, which would affect every landlord, including co-ops, condos, and small mom and pops,” Carlo Scissura, who heads the organization, wrote in a letter to Johnson on Monday.”