PART IV

PROGRESSIVE COUNCIL MEMBERS GIVE VOICE TO SMALL BUSINESS OWNERS AT HEARING TO FIND A REAL SOLUTION TO END SMALL BUSINESS CRISIS!

THEY SELECT JOBS SURVIVAL ACT!

 

 In Part III* of our BID series we showed the years of SBS and BIDS collaborating to give a false narrative to the Small Business Committee of the true state of our city’s small businesses. The SBS and BIDS were promoting the value of worthless programs and services by hugely embellishing their need and usefulness in addressing the real problems faced by our small business owners. Their public proclamations of creating these resources and initiatives to help or assist our small businesses was a total sham, and still is today.   In reality both the SBS and BIDS were accomplices in concealing the growing crisis and dire consequences to our businesses created by our city’s property owners’ quest for bigger profits.

* Part III  https://www.savenycjobs.com/bids-part-iii

*  Part I  https://www.savenycjobs.com/brannan-betrayal

* Part II  https://www.savenycjobs.com/stringer-last-grade-for-mayor-race

 Almost by accident, at a meeting of Bodega owners in the Bronx, then Small Business Committee Chairman David Yassky stumbled upon the true state of our business owners.  He would hear from the merchants themselves of their real problems and real abuses they faced to survive. He would learn the suffering of business owners resulting from the SBS and BIDS not addressing these real problems and instead covering them up. He would conclude that his committee had not been given the truth by the SBS or BIDS on the roles they played in supposedly promoting a healthy small business environment in NYC.

 

As a result, after hearing from the merchants directly, Chairman Yassky asked a local Latin Chamber founder to do an independent survey of all types of Hispanic businesses in NYC.  The largest independent survey of Hispanic owned businesses* was completed in early 2009 and publicly announced in April 2009.  At a Washington Heights forum, former Chairman Yassky, joined by leading progressive lawmakers, declared a crisis existed for our city’s small businesses.* He also pledged an immediate hearing to find a solution to stop the closings.  A hearing was scheduled for June 29, 2009*  before the Council’s Small Business Committee.

                                 The first true study of small businesses in NYC

https://www.savenycjobs.com/latin-chamber-study

                           First acknowledgment of a small business crisis!

*https://video.wixstatic.com/video/44ef2f_92077641589b4523aea350f329d46c68/480p/mp4/file.mp4

Yassky, ‘The one thing we cannot do in the face of this Crisis is nothing”.

                                     First honest hearing since 1993!

*https://www.savenycjobs.com/_files/ugd/44ef2f_80c3f431723f4305aafd602f15f849a7.pdf

                 Hearing exposes which side SBS and BIDS are on!

 If there was any doubt of the sincerity of SBS and BIDS, or their commitment of wanting to help small businesses prosper on main streets, the June 2009 hearing exposed them as insincere anti immigrant charlatans. 

The true loyalty of the SBS and BIDS can also be shown by what occurred prior to the release of the survey and the hearing.  Prior to the public release of the USA Chamber of Commerce survey, a group of Hispanic Chambers and business organizations ask for a meeting with then SBS Commissioner Robert Walsh to present this critical survey. In March 2009 Commissioner Walsh along with SBS officer, Andrew Schwartz met with Ramon Murphy, founder of USA Bodega Association, Miguel Peribanez, Founder of USA Latin Chamber of Commerce, Silvia Smith, President of Manhattan Hispanic Chamber of Commerce, Quenia Abreu, President of New York Women’s Chamber of Commerce, and Luis Fucando, Director of Hispanic Tax Preparers.  Each spoke to Commissioner Walsh of the importance of the survey's findings that exposed the problems facing Hispanic business owners. Each confirmed the survey’s findings with their own experience dealing with immigrant owners.

 

After everyone had a chance to speak directly to Commissioner Walsh, they presented him with a copy of the finished USA Latin Chamber Survey for his review, comments and questions. Everyone at this meeting was excited to finally expose the true state of their neighborhood’s businesses and ask SBS to begin to address their abuses and crisis. To everyone’s amazement and disbelief Commissioner Walsh refused to look at the survey and made the ridiculous excuse that this survey was under the sole jurisdiction of the Council’s Small Business Committee who requested it be done.

 

 One by one, angry advocates for immigrant businesses protested his refusal to even look at the survey. Some made the case the majority of small businesses were owned by multi generational immigrant families (64-68%) and the Hispanic owners made up that majority. Others stressed that the survey showed Hispanic owners targeted for illegal extortion of cash, 31% in the survey. Ramon Murphy jumped in to say the extortion of Bodega owners was much higher than 31%, more like 80%. Commissioner Walsh was not moved and committed only to turning the survey over to the Small Business Committee.

 This meeting and its outcome showed the clear detachment between the majority of the city’s small business owners and the government agencies mandated to serve them. A clash of cultures, values, and political power.  On one side of the room were hard working Hispanic advocates representing immigrant family owners who invested in their neighborhoods and working day and night seeking their American Dream. On the other side were white men who never owned a small business and would never work day and night seven days a week, because they had the political power.    Commissioner Walsh made $192K a year for serving the goals of the wealthy, property owners, and party machine.   Schwartz made 168K a year to keep the status quo.  They had the political power while the Hispanic merchants had none.

 

The SBS or the BIDS had no intentions of ever addressing any major problems of the immigrant business owners nor of giving them any rights when their leases expired. Rights needed to save their American Dream. That shameful anti immigrant policy is in effect today.

 The real reason Commissioner Walsh refused to discus the results of the survey is because he knew the landlords the SBS and BIDS represented and protected were the ones responsible for our city’s small business problems and crisis. The property owners were thriving under a pro real estate economic policy in NYC, while making small business owners the victims fighting to survive.  Commissioner Walsh had a shameful record that the survey exposed.*  Under his watch carrying out the SBS and BIDS policy, which was in fact, the real estate lobby’s policy, occurred  the greatest destruction of our city’s small businesses on main streets in every neighborhood.

* NYC Courts warrants issued for evictions of commercial premise.

https://www.savenycjobs.com/nyc-court-evictions-

 Since first becoming Commissioner of SBS in 2002 until the 2009 hearing, NYC Courts issued  58,570 warrants to vacate for commercial businesses. On average  610  warrants to vacate each month!! Estimated 115K-120K businesses voluntarily closed under his watch. These closings produced an estimated 920K-959K jobs lost in NYC under his watch.

 For the record, to this day, the SBS or BIDS have never mentioned this survey or its findings. To this day, prior to the virus crisis, neither the SBS nor BIDS will acknowledge that a crisis existed for our small businesses. To this day neither group has ever presented a single real solution to stop the closings of even one business in NYC. To this day the SBS and BIDS have opposed any law to give rights to business owners when their leases expire.  To this day, the SBS and BIDS only support legislation created or approved by the real estate lobby which gives no rights to renewal commercial leases and no rights to tenants to negotiate fair lease terms.

To this day, the SBS and BIDS will never mention the illegal extortion of cash demanded from mostly immigrant owners, their cruel short term leases of sometimes month to month or one year, or the burden of paying their landlord’s property taxes. To this day, SBS and BIDS have made no effort to address any of the major problems exposed by the Jetro bodega owners and confirmed by the survey.  To this day, SBS and BIDS have used their agencies and political voice to keep the status quo with landlords in full power in the commercial lease renewal process and in full control of the futures of every business owner in NYC who rents. To this day, the SBS or BIDS refuse to  take any responsibility for creating our city’s “empty store blight.” When in truth, both share in playing a major role in forcing long established businesses to close and storefronts empty for years. 76 BIDS with 76 once vibrant business strips, now filled with empty storefronts and merchants in fear of their futures.

 What is despicable about the arrogant attitude of SBS and BIDS officers during this over a decade old small business crisis, with record business closings, is the lack of any empathy for the owner's or worker's families.   The lack of any moral obligation to do something to stop the closings is a disgrace.  With immigrant families owning the majority of our small businesses, the SBS and BIDS can be correctly labeled anti immigrant organizations. Our immigrant family businesses are treated as “second class citizens’” and  “a deprived social class” marginalized with no voice into making our city’s economic policy. 

Some BIDS actually budgeted with companies who specialize in finding chain store tenants.  The BIDS were not working to keep their established tenants in business but working to replace them with bigger national chains that would pay higher rents.

This is former Commissioner Walsh today, Mr. Gentrification promoted by a company he is a principle.  https://jgscgroup.com/news/yu-me-leading-the-independent-bookstore-resurgence/

 

Good government gives a voice to desperate mom and pop!

 On June 29, 2009 a hearing was held in the Council by the Small Business Committee. *  Then Chairman David Yassky made clear the goal of the hearing in his opening statement. Chair Yassky, “ Good afternoon. I will say simply as an opening statement that I believe that we absolutely have to do something, period…… It's not an option to do nothing. The mom and pop stores on the commercial strips in our neighborhoods are the heart of the neighborhood. We cannot allow them to be pushed to the point of disappearance, which is what is happening now.” 

 *https://www.savenycjobs.com/_files/ugd/44ef2f_80c3f431723f4305aafd602f15f849a7.pdf

Chairman Yassky made clear throughout the hearing that a solution must be found to stop the closing of our businesses.  He tried repeatedly in vain to gain the SBS and EDC people to support joining with his committee to find the best solution. Yassky, “If it's not going to be this bill, then I want to hear what the alternative is for how we're going to help small businesses in this difficult time. The one thing I just want to put right up front with the administration witnesses here is we have to have some solutions to offer.”

 Chairman Yassky even pleaded with the SBS and EDC to at least try to offer some solution. Yassky, “I think it is imperative

7 that the city do something to assist mom and pops

8 with the problems they face in securing reasonable

9 rent. If the administration's position is that

10 this bill is not the right answer, then we need to

11 know what the right answer is from your

12 perspective. The Council may well choose to

13 proceed with this bill regardless. But we

14 certainly want to know what the right answer is

15 from your perspective. But not doing

18 anything is not an option at this point. I urge

19 you to be part of this conversation rather than

20 absent from it.

 This hearing was in response to the largest survey of small businesses showing a crisis existed. That record numbers of established businesses were closing in very neighborhood of the city. Yet, SBS Commissioner Walsh was a no show!!  In any major city in the world with this disgraceful number of business failures he would have been fired years ago. The SBS would have been overhauled and all BIDS shut down. But this is NYC where lobbies rule and not democracy.  The SBS and EDC people came to this hearing with one goal, to oppose the Small Business Jobs Survival Act or any solution that regulated commercial landlords.

 Their testimony at this hearing was an embarrassment to good government.

They testified only about their worthless programs they offered. Clearly with 1,200 to 1,400 businesses year after year closing each month in NYC, their programs were monumental failures. They totally ignored seeking any solution to stop the closings. It was clear the SBS and EDC had programs to help start, manage and grow your business but they had NOTHING to help keep you in business when your lease expired. How shameful for our city’s small business agency to not have a single program that “retains businesses or jobs.” 

 Then Councilman John Liu summed up the SBS and EDC testimony. Council-member John Liu, gave the best description of what SBS programs really contribute: “Every time we have a hearing with EDC or with SBS, there is always talk about all these great programs that are out there to help small businesses. I’ve had many conversations with the folks at SBS and at EDC, and I’ve always said not to tell me to go back to my constituents with these programs because they don’t really think very much of these programs. They don’t. So as much as your two departments and agencies can say that you have all these great programs to assist small businesses, the small businesses aren’t buying it. They’re not buying it because they’re not being asked what they need help with.”

 SBS’s loyalty to big real estate and covering up the crisis the property owners created was exposed by then Councilman Tony Avella.

COUNCIL MEMBER AVELLA: Thank you,

21 Do you believe that escalating rents

22 are the major problem facing mom and pop small

23 businesses? A simple yes or a no, is that the

24 number one issue facing small businesses today in

25 the City of New York?

ANDREW SCHWARTZ (Deputy SBS) : I can't say if it's a yes or a no. There are certainly a lot of

4 concerns expressed about the high cost of doing

5 business in a lot of different ways. Decreased

6 commercial customers, during the economy downturn,

7 is certainly a big impact on a lot of businesses

8 and escalating rents is something that's going

9 on too, as we pointed out in the data.

10 COUNCIL MEMBER AVELLA: I've got to

11 say from your very presence here, and this is not

12 personal, why isn't the commissioner of Small Business Services here? Why isn't the president

14 of EDC here giving testimony? All you have to do

15 is go out and talk to any one of the small

16 business owners here. What is the number one

17 issue? You just have to go to your deli on your

18 corner or the dry cleaner on your corner, what is

19 the number one issue. For you not even to

20 acknowledge that is amazing to me. It is

21 absolutely amazing. I don’t expect an answer

22 because I don’t think the administration really

23 understands at all what the problem is. Your

24 testimony here is BS. I can't say it in any other

25 way. Instead of addressing the number one issue,

1 and shrug your shoulders, go ahead, but the number

3 one issues is escalating rents. You come up with

4 a loan program. What good is a loan if they don’t have a business?

 Keep in mind the Latin Chamber survey showed that by far ( 60% plus) business owners listed rent increases as the major ( number one)  cause of layoffs, risk of closing, stopping all growth etc. Yet, the SBS will not admit the obvious. For an entire decade of businesses closings, not once did the SBS mention high rents as a cause of business failures.  No wonder Avella was in disbelief, “For you not even to acknowledge that ( rent was the number one problem) is amazing to me. It is absolutely amazing.”

 

Councilman Liu was not letting SBS off the hook for not acknowledging the illegal extortion of immigrant owners exposed by the Latin Chamber survey, (31% extorted). Liu asked SBS Deputy Schwartz if he knows if key money ( money demanded to get good terms on a new lease or renew a lease) existed? Schwartz was not sure and wanted specifics, wanted proof. Liu kept asking him why the SBS did not view this demand for money as a problem for small businesses.  Schwartz gave lawyer double talk answers, “have the party phone the SBS.” LIU: Right. In the

20 12 years at SBS, have you heard of any cases that

21 the Department of Small Business Services has

22 pursued with regard to investigating key money?

23 ANDREW SCHWARTZ: I'm not aware of

24 any. But I don’t know if other agencies have done

25 this too. It's not something that necessarily

 COUNCIL MEMBER LIU: Well it stands

4 to reason the Department of Small Business

5 Services would be involved. This problem is

6 affecting small businesses the most. I'm not

7 going to belabor the point. The point I'm making

8 here and it's essentially being confirmed by your

9 testimony is that the Department of Small Business

10 Services actually does not recognize the issue of

11 key money as a problem in this city. You don’t

12 recognize this as a problem. Everybody here I bet

13 you are going to testify that that is a big

14 problem right now in New York City. And it's not

15 even just right now; it's been this way for a

16 very, very long time. The issue here is that the Department of Small Business Services certainly under this administration just has not recognized that key money is an issue.

Councilmember after Councilmember tried to gain some commitment or even some concern by SBS of the dire problems facing our small businesses. If SBS acknowledged any of these problems then the assumption was they would be responsible for taking some actions to correct the problems. The SBS played dumb the entire hearing and  never once acknowledged a single problem facing our small businesses. Even with Chairman Yassky’s opening prediction that if nothing is done to stop the closings of our businesses they will disappear. Time will show that his prediction came true.

 

A few examples of SBS coached staff’s willful ignorance.

 

Councilman Liu:

"These small business owners are smart

people. They know how to do business. I think we

could enhance, but they know how to do business.

I think that the issue we're asking here is how we

protect them when it comes to lease renewal. In

many of the first hearings on bills that we've

had, as you know, there is always the opposition

or suggestion to improve the bill so that we could

make it into law in the City of New York. Does

the agency or the administration have any

suggestion or recommended amendments that we could

add to the bill to help small business owners when

it comes to lease renewal?"

 

ANDREW SCHWARTZ: Council Member,

as I said, we are working with businesses

precisely on that issue of commercial leasing. We

understand it's a complicated thing for a business

to go into a commercial lease. That's why we're

working in coordination with the Legal Aid Society

on those types of workshops with business owners

so they can negotiate a proper commercial lease

with an option to renew or whatever it is they

need.

 

11 COUNCIL MEMBER MARTINEZ: "I

12 understand that. I think it would be more

13 productive for the hearing if we go straight to

14 the point. The pink elephant in the room is the

15 fact that small business owners in the City of New

16 York have to pay cash. We do nothing in the City

17 of New York for small business owners. We do

18 nothing for small business owners if we do these

19 workshops with Legal Aid Society if they can't

20 keep their business, if they can't renew their

21 lease. So why have these programs? One of the

4 number one reasons was high rents. We had the

5 chambers of commerce here who have done their own

6 surveys. The number one issue is high rent or

7 couldn’t renew. The question is what we do as a

8 city to address that issue. I'm familiar with

9 many of the programs that both EDC and Small

10 Business provide. That’s not the issue. The

11 issue is what we do to deal with the issue of the

12 lease renewal and the money in the brown bag that

13 has to be given."

Every Council-member called out the SBS and EDC for their lack of action to make stopping the closings a priority. Or for that matter their lack of action on any of the major problems facing small business owners.  SBS and EDC testimony eliminated any pretense that the SBS cared about the welfare of our small businesses, and they still do not today.  

At this hearing Chairman Yassky gave every opportunity possible for the SBS to stand on the side of small businesses for a change.  Chair Yassky asked SBS if they opposed the Jobs Survival Act, and they said yes. Why? They gave no specific reason other than it would change how the commercial market rents are determined. Chairman Yassky asked for their recommendations for amending the bill to satisfy their concerns. They had no recommendations but would look over the bill and get back. He then went so far as to ask SBS if they would support a mediation only bill , without any arbitration clause.  As any business owner knows, mediation without arbitration gives no leverage to the tenant. A less than nothing legislation. Again, the SBS would not support this recommendation. What would the SBS support? From the testimony at this hearing it was made clear, the SBS wants to keep the status quo even if it means the continued destruction of our city’s small businesses, a policy that remains even today.  

Three very positive things for our small business owners came out of this hearing.  Firstly, the hearing exposed the SBS, EDC, and BIDS as pawns for the real estate lobby’s policy. 

Not a single BID testified or even submitted written testimony supporting legislation giving rights to their BID merchants. No BID recommended any solution to stop the closings of BID businesses, and they never will. BIDS are the problem and not the solution to a vibrant local economy.

Secondly, a slip in testimony by an EDC spokesperson exposed why the SBS, BIDS and EDC would never allow a vote on the Jobs Survival Act. Why the power brokers would call upon their loyal lawmakers to collude and rig the system to deny small business owners economic justice.

Despicable testimony!

“My name is Michael Meola and I'm a senior vice president at the NYCEDC. 

Intervention of this type in the commercial real estate market would be a dramatic departure from current and past practice in New York City. Such an intervention in the vast commercial real estate market could have the unintended consequence of reducing the supply of new capital investments in commercial and retail space. What we do not want to see is a reduction in the ability of developers and small investors to build new commercial property.

 But I do think, as my testimony mentioned, that at a global level, this would be an intervention in the commercial real estate market that really is a dramatic departure. I do think there are a couple of levels of concern. One is the administrative cost on the city side which really would be significant. The second one is there really is a potential for the dampening of the attractiveness of investing in commercial space in New York City."

An honest hearing orchestrated by true progressive lawmakers can produce real truths.  Its all about making the fat cats richer and protecting their investments, even at the expense of destroying the “backbone” of local economies. 

The third good outcome from this hearing was that the progressive Council members kept their pledge to find a real solution to stop the closing of our small businesses and end their crisis. They meant what they said, “there is no option to do nothing.”  At the conclusion of the hearing, one which heard NO oppositions to the bill except from SBS and EDC, the entire committee members selected the Jobs Survival Act as the best solution to save our businesses and every member, including Chairman Yassky became sponsors of the bill.

 At the Committees’ next meeting, the bill will be voted on and pass unanimously. With the bill having 32 sponsors an easy passage by the full Council is assured and finally our city’s small businesses will have a real lifeline to give them rights to save and protect their American Dream.

 PART V  No vote is allowed on the only real lifeline to save our businesses.