The Small Business Jobs Survival Act

 Jobs Survival Act

click for copy of bill

 

A Real Solution- Give Tenants Rights to Level the playing field for business owners when negotiating fair lease terms. The only real solution to save our city’s small businesses and the jobs they created is to give Rights to tenants to allow them to negotiate fair lease terms which would give them a reasonable return on their investment.

 

Jobs Survival Act is a simple, fair and effective solution to several of the city’s major economic problems and offers the only opportunity to restore economic equality to our business owners, save our art and cultural institutions, maintain the character of our neighborhoods , save the best pathway to social mobility to the majority of low income families, and re-establish NYC as the Gateway for the American Dream in America. Jobs Survival Act deals with only a single business process: the commercial lease renewal process. How important is the lease renewal process to the stability, vitality and future of our city’s small businesses to sustain growth and create jobs? In NYC, the number one reason given for 30 straight years for established businesses ( 5 + years) to close, was the failure of the commercial  lease renewal process.The number one reason given for 30 straight years for the laying off of employees in established businesses has been the failure of the commercial lease renewal process.The number one reason for our city’s small businesses becoming unstable and stopping growth and to end capital improvements and delaying all future expansion plans, has been the failure of the commercial lease renewal

process. The number one reason for the increase of illegal extortion of the mostly immigrant owners by unscrupulous landlords demanding cash “under the table”or loss your business, has been the failure of the commercial lease renewal process. 

 

Legislation Text : The Small Business Jobs Survival Act

A Local Law to amend the administrative code of the city of New York, in relation to creating a small business lease program for establishing an environment for fair negotiations in the commercial lease renewal process in order to determine reasonable lease terms.

 

Be it enacted by the Council as follows:

Section 1. Legislative findings and intent. The Council hereby finds that the city's small business sector remains vulnerable at a time when New York City is more dependent than ever on small business for job growth and revenues. The New York City commercial rental market has been negatively influenced by speculators for such an extended period of time that the interest of small businesses and job creation, and the broader general economic interest of the City, are being harmed. An unacceptable number of established small businesses are being forced out of business solely as a result of the commercial lease renewal process. The present commercial rental market provides no means for tenants to mediate disputes between tenants and landlords to arrive at fair and reasonable lease renewal terms. The absence of legal protection for the interests of commercial tenants in the lease renewal process has unnecessarily accelerated the closing of small businesses and resulted in lost jobs, tax revenues and community instability. It is the intent of the City Council, through this legislation, to be known as the “Small Business Jobs Survival Act,” to give small businesses some rights in the commercial lease renewal process, and therefore, a measure of predictability of future costs through a two-step procedure of mediation and, if necessary, arbitration for negotiating commercial lease renewals and rentals. This process would create a fair negotiating environment, which would result in more reasonable and fair lease terms to help small businesses survive and encourage job retention and growth in the City of New York.

 

Return to Bargaining in Good Faith:

 Before Speculators and Greed invaded NYC and reaped windfall profits by exploiting the hard work of our small business owners, the Lease renewal process worked well for all parties.The foundation of this process rested with both parties’ respect for each other’s investment and each other’s need to make a reasonable return on that investment. Regardless of whom the free market favored in the negotiations, for over 50 years business owners and landlords managed to arrive at new lease terms which allowed both parties to make a reasonable profit.Then in the mid 1980’s real estate speculators took full advantage of the unregulated lease renewal process, and the goodwill of their friends at City Hall, to rent gouge the tenants and stop all negotiations in good faith, and only demand unreasonable and oppressive lease terms. The outcomes of this over speculation in the free market in NYC was the complete collapse and exploitation of the vital free market commercial lease renewal process. Which has resulted in our city going from being the “gateway for immigrant entrepreneurs to achieve the American Dream” and having the oldest and most diverse and vibrant economy of any major city in the nation to the Worst city in the nation to start a new business, the Worst city in the nation to build a successful business, and the Worst city in the nation for long established successful businesses to remain in business.

 

The passage of the Jobs Survival Act would end this Crisis immediately for all New Yorkers .

 

SUMMARY:

To establish a commercial lease renewal process which is fair to all parties, one which would give the tenants enough rights so that they can again bargain in good faith with the landlords to arrive at fair least terms. To keep government out of the decision making process and on the sidelines during the lease renewal negotiation process. The only voices to be heard in the bargaining process would be between the tenant and landlord, and from a mediator if they fail to mutually agree on the terms of the new lease. And only from an arbitrator if the mediation process fails to achieve a mutually agreement between the parties. No government formulas are ever involved.

 

To create a cost effective system for commercial lease renewals, one where all the costs are shared equally between and landlord and tenant. Also, one where no taxpayers dollars are spent, the only costs would go to an arbitration organization.

To create a quick step by step process to arrive at fair lease terms. One which is controlled by both parties and can be stopped at anytime by mutual consent. An Arbitration process, which gives both parties equal opportunity to present their arguments for their reasonable terms of the lease. A process which takes into consideration the unique nature of every business and every business community, where the arbitrator’s decision is guided by strict criteria and based upon a “case by case” situation to decide fair and reasonable lease terms. Criteria used successfully in Arbitration and court decisions for 18 years when NYC was under the Commercial Rent Control law 1945-63.

 

What present landlord abuses would be stopped by this bill?

  • Put an end to illegal extortion of commercial tenants who are forced to paymoney “under the table” to keep their leases.

  • Put an end to “rent gouging” by greedy landlords 

  • Put an end to those landlords who refuse to even negotiate a lease renewal with the tenant.

  • Put an end to those landlords who refuse to “bargain in good faith” with their tenants.

  • Put an end to those landlords who work deals behind the backs of the tenants in order to take over their successful businesses or is some way or gain profits as a result of the years of hard work by the tenants. 

  • Put an end to those landlords who want to pass along all their own costs and responsibilities onto their tenants to pay.

  • Put an end to those landlords who only want to offer short term leases to the tenants so they can be in a better position to speculate on the property.

  • Put an end to excessive security deposits without interests going to the tenants.

 

What are the goals of this Bill :

  1. Level the playing field between landlord and tenants when negotiating new lease terms.

  2. Give tenants enough rights and leverage to protect business tenants from unreasonable lease demands, thus keeping successful businesses from going out of business due only to rent gouging or unfair lease terms. 

  3. Stop the lost of jobs resulting from excessive rents or business failures due only to exorbitant lease demands.

  4. Put stability and predictability back into the free marketplace, which would result in encouraging business expansion and the creation of more jobs.

  5. Give businesses longer leases, which would enable them to expand, create jobs, and take advantage of the loan and assistance programs in the private sector as well as from government agencies. Longer leases promote economic growth.

 

Who is protected under this Bill:

 

  1. All manufacturing businesses

  2. All Not-for-Profit organizations

  3. All performing arts and theater groups

  4. All retail businesses

  5. All service businesses

  6. All professional medical offices and businesses

  7. All commercial tenants in New York City 

 

How long is the length of Commercial Leases: To encourage stability and growth, the minimum length of lease is 10 years, but a shorter or longer length can be established if both parties agree.The passage of this Bill would create a fair commercial lease renewal process which would save existing jobs as well as create a healthier business environment to encourage business expansion and thus create more new jobs.This is not commercial rent control! Not a single business of the city’s est.200,000 would government set the rent for. This bill is based only upon mediation and arbitration and the bill establishes only the guidelines for the process of commercial lease renewals. Every arbitration decision is based upon a “case by case” situation. The final rent charged would be determined only from the facts presents by the landlord and tenant before an arbitrator.This bill does not interfere in the general marketplace, but instead focuses only upon existing commercial leases entering into the lease renewal process. A landlord can charge whatever they wish in the open market for empty businesses. For new leases, they have no guidelines or regulations to follow in deciding their rent demands or the terms of the lease.