The Greatest Small Business Crisis in NYC History
And Chairman Robert Cornegy did Nothing to End It!
The Deep Hole our Small Businesses Are In
Today was Dug Deeper By
CM Robert Cornegy!
It took over 34 years for the real estate lobby to find a lawmaker without any scruples or any integrity who would introduce their worthless bills denying justice and rights to business tenants. Shamefully, during the worst crisis ever for our small businesses they found him, and that lawmaker was Chairman Robert Cornegy.
A Committee with no voice for the voiceless, and no true progressive member.
Before detailing Chairman Cornegy’s point person role for REBNY’s collusion to deny economic justice to small business owners it’s important to understand the starting point for the rigging to follow for Cornegy’s four years. The makeup of his Small Business Committee was a disgrace to democracy and good government. The committee had 9 members, Queens had 5 members or the majority, with the Bronx having none! The largest ethic owners of small businesses in NYC are Hispanic owned. Yet, there was only one Hispanic councilmember on the committee. Immigrant families by far (64-68%) own the majority of our small businesses. Yet, this rigged committee had only two ethnic members, with Councilman Koo never even a sponsor of the Jobs Survival Act and opposed to regulating commercial landlords. How unfair for the Bronx, immigrant families and Hispanic small business owners to be grossly under represented or not represented at all, in a time of crisis. Why it was acceptable for CM Cornegy, in a time of a growing small business crisis to not have one member representing the Bronx while Queens with less rent gouging had 5 members speaks to the injustice to follow for the next four years.
The Truth: In reality, a lobby and the corrupt Queens’ machine controlled the future of our small businesses. The very same real estate lobby whose members caused the small business crisis, that had grown out of control, destroying the backbone of our economy, nevertheless needed to control the Small Business Committee to protect the profits of its members. If not, a true well intended committee would do exactly what the Small Business Committee under former Chair David Yassky did, hold an honest hearing to quickly find a real solution to stop the closings, vote it into law and end the crisis.
The late Dr. Martin Luther King said, “Silence is betrayal”, the truth of CM Cornegy’s actions will show Chairman Cornegy remained silent for four years when a real solution to stop the closing of small businesses was willfully bottled up in his committee. He made no effort to set the record straight on the false claims the Jobs Survival Act had legal issues. He made no effort, like for other legislation, to amend the bill to satisfy any claimed legal concerns allegedly stated by legal department. He made no effort to substitute another real solution bill for the Jobs Survival Act to stop the closings and end the crisis. He along with every committee member remained silent to the truth, they had a real solution in their hands but it would be bottled up and never be voted on. That was the goal given him by the real estate lobby and he was successful in achieving it.
CM Cornegy’s record will show clearly he likely was hand picked to be Chair because he lacked the political will, courage and ethics to challenge the corrupt establishment at City Hall. His loyalty to serving only REBNY’s agenda and goals and protecting only the profits of a few wealthy and politicizing the small businesses’ crisis has produced a shameful outcome for all businesses and their employees fighting to survive today in NYC. The deep hole every small business owner was in and growing deeper with rising rents and taxes was dug deeper by the betrayal and abandonment of good government actions of CM Cornegy as Chair of the Small Business Committee.
CM Cornegy’s failed leadership resulted for the first time in several hundred years’ history to the closing of NYC as the Gateway to America for “immigrant entrepreneurs.” His policies will be shown to be both discriminatory and anti-immigrant. For long established successful businesses, NYC had become the worst major city in the world to survive when their leases expire. Immigrant owners would be targeted by unscrupulous landlords who would abuse and extort them because they had no rights and no voice at City Hall to protect them. Not one member of the Small Business Committee had the courage or decency to stand up to call out the shameful actions of this committee in denying justice to people facing a crisis. The unfair one sided lease renewal process resulting in the sky high rent increases and unreasonable lease terms, made NYC the worst major city in the world for successful businesses to predict their future. In reality, small businesses had no future under CM Cornegy’s watch.
Chairman Robert Cornegy’s legacy as Chair of the Small Business Committee:
Empty storefronts (sometimes for years) stand on every main street where once thriving businesses were.
Exorbitant rent increases have become the “norm” for every neighborhood business in NYC.
Illegal extortion of mostly immigrant owners was increasing when landlords demanded “cash under the table” under threat of throwing tenants out.
Store leases were getting shorter (sometimes month to month or one year) for businesses in middle working class and low income neighborhoods where speculation was increasing.
Growing landlord’s property taxes were causing lay offs and business closings.
A Major pathway for social mobility and jobs for low income families was being destroyed.
Empowering and Praising the SBS as the largest small business community in the world was being destroyed and a crisis was covered up and goes unchecked.
CM Cornegy’s response to this economic destruction and suffering to families, a “do-nothing” policy for four years.
Record of Shame
First public pledge by Chairman Cornegy to write legislation to address the crisis.
July 24, 2014 Gotham Gazette* City’s Small Business Crisis Continues by Jullian Jonas
First time that Chairman Cornegy publicly stated he was writing legislation to address the high rents forcing businesses to close, “I hope that we can create an effective incentive for commercial landlords that will give businesses greater predictability and allow them to benefit from the positive changes they help to create."
Robert Cornegy is said to be working on legislation using subsidies to pay landlords to not rent-gouge.
* Chairman Cornegy’s first public pledge to write legislation
Giving tax credits to landlords to not raise rents excessively was first written in 1986 by the real estate lobby as one recommendation given a Small Retail Business Study Commission set up by then Mayor Koch and Speaker Vallone.
The small business advocates called it the “Limousine Commission” because the majority of its members arrived in limousines. Hand picked by Koch and Vallone, the majority were presidents: of a Wall Street firm, real estate firms, banks, and big business.
No surprise, here we go again!
March 26, 2015 interview with Villager editor, REBNY former president Steven Spinola said, “he is in favor of giving “tax incentives” to landlords who work to keep commercial tenants in place.”
Why wouldn’t he want this bill? The real estate lobby wrote the bill in 1986 as a substitute for then the original version of the Jobs Survival Act. The bill gave no rights to the tenants and kept the status quo favoring only the landlord.
No surprise *
Another disgraceful first for CM Cornegy, in the long 30 plus years debate on legislation to address the city’s small businesses’ closing due to having no rights when their leases expire and facing sky high rents, CM Cornegy is the only lawmaker who ever attempted to transfer the responsibility to write legislation to the “black hole” in Albany.
This bill was the first act promoted by Chairman Cornegy in claiming to address the small business crisis. In Jan 2015, Chairman Cornegy introduced a resolution (0541-2015)* which calls upon Albany to write and pass legislation to address the high rents forcing NYC’s businesses to close: http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=2141236&GUID=B16F81D0-958B-4CBA-BBC8-ED53679DED7A&Options=ID%7CText%7C&Search=cornegy
Cornegy’s bill is the same bill on REBNY’s priority wish list bill.
A resolution calling upon the New York State Legislature to introduce and pass, and the Governor to sign, legislation establishing a property tax credit for commercial landlords who voluntarily limit the amount of rent increases to small business owner tenants upon lease renewal.
(from his bill)
Whereas, Once the commercial rents rise, the very businesses that generated the neighborhood appeal in the first place are no longer able to afford to remain in the area and are often forced to close or relocate; and
Whereas, Within the past several years, 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 sought by landlords during the lease renewal process.
Chairman Cornegy’s first action as Chairman in dealing with the small business crisis (he acknowledges in his resolution) was to transfer the responsibility to Albany to address. The future of the backbone of our economy and engine of job creation in time of crisis, would be solely in the hands of Albany, the black hole for dumping legislation.
His abdicating his Committee’s responsibility to corrupt Albany was not the most shameful act he would commit as Chair. The legislation he proposed would fail to save a single business because it gave no rights to commercial tenants when their leases expired. The legislation, if passed would be useless in stopping the closing of businesses because it was voluntary for the landlords. The very same landlords who were reaping windfall profits from the businesses and who had created the crisis were not regulated in any manner by Cornegy’s proposal. The hallmark of all future CM Cornegy proposals would be NO REGULATION OF LANDLORDS and NO RIGHTS FOR BUSINESS OWNERS. As Chairman of the Small Business Committee he should know that in NYC the commercial tenants mostly pay their landlords’ property taxes because they have no rights when their leases expire and must agree to do so in order to get a lease renewal.
According to an Independent Budget Office report, CM Cornegy’s bill could likely increase rents on tenants. Because Commercial rents are not regulated, landlords can charge whatever they want, and commercial tenants pay their landlords’ property taxes, it leaves this proposal open to exploitation and abuse by landlords costing taxpayers a fortune.
July 27, 2016, Independent Budget Office Report:
On tax incentives “unintended consequence of allowing landlords to raise commercial rents faster than they otherwise would have when leases for small business expire.
However, we expect profit maximizing landlords to increase rents in excess of what they would have been without the abatement to one degree or another.
Knowing they will collect the full rent charged small businesses, landlords have an incentive to increase rents when leases expire in excess of the amount their property taxes increase each year.”
“The city would therefore not only be subsidizing small businesses’ rents but also landlords’ operations by oversupplying tax relief.”
Only the landlords benefit from Tax incentives NOT the tenants .
Three Cornegy proposals are in reality three REBNY created proposals:
As Chairman Cornegy lost his Brooklyn spirit to “do the right thing”. Instead, his moral failings were exposed at Chairman of the Small Business Committee when he made a crisis worse.
CM Cornegy lays the foundation for the greatest sham legislation in council history.