September 27, 2018

 

Councilman Mark Gjonaj, Chairman Small Business Committee

City Hall Office

250 Broadway

NY, NY 10007

 

Re: Meeting to plan for hearing on SBJSA

 

Honorable Chairman Gjonaj:

I am very grateful for your willingness to want to meet with me to plan for an honest, fair and productive hearing on the Small Business Jobs Survival Act.

 

Regrettable, my failing health will not permit me to attend.  Even though I have the utmost confidence in the ability and commitment of other small business advocates to represent me accurately, I wish to personally present in written detail, my opinion. My letter to you is of my judgment on what will be essential actions needed for a fair and productive hearing.  The dire situation faced by our small business owners, especially Korean and immigrant owners, presents for me, a moral obligation to do all in my power to see they receive justice at this long overdue hearing.   My reasoning will be based solely upon my 34 years experience advocating for small businesses and fighting daily to solve the problems of immigrant small business owners in NYC.

 

As one of the drafters of the first version of the SBJSA, I played a major role in selecting seven prime sponsors, and drafting of several significant updated changes.  I have helped organize eleven hearings on this legislation over 30 years.  While every hearing was important to the future of small businesses, none will be as important as your hearing. 

 

The reason being, the failure of government for the past decade to take any true actions to address the unfair commercial lease renewal process has made a crisis grow worse. The outcome of our city’s one sided lease renewal process, where business owners have no rights in a hyper speculative market, has produced record closings of long established businesses (on average 500 court evictions of businesses each month), out of control rent gouging, growing numbers of illegal extortions of cash demanded from mostly immigrant owners to remain in business, harsh short term leases of sometimes month to month and one and two years, oppressive lease terms, and empty storefronts on every block where once thriving businesses stood.  The historic transfer of wealth from our small business owners to landlords, and the political influence this has produced in our government, will create a major challenge to your committee to overcome in order to give the justice our small business owners deserve.

 

Your committee’s hearing will be held at a time of crisis in an environment where every small business owner fears for the future when their lease expires.  Therefore, I wish to give you two actions that I know to be essential for your committee to take in order to overcome the challenges faced and be successful to find a real solution to end this crisis; a real solution to stop the closing of successful small businesses and eliminate most of the fears and apprehensions of our small business owners; a real solution to give justice, peace of mind and hope by restoring the American Dream and a brighter future in NYC for our small business owners.

 

 

My Two Actions:

I. To resolve all the outstanding alleged legal concerns/issues/claims of the SBJSA prior to the hearing. This must be the top priority of the committee because of the long term impact and influence the alleged legal claims has had on the fate of the SBJSA and democracy at City Hall for our small business owners.

 

The alleged legal claim, began in 2009 after the last hearing on the SBJSA, and had the immediate effect of stopping a vote on the bill that was certain to easily pass. This alleged legal challenge remains un-debated and un-resolved still today by Legal Council. The alleged legal claim “that the SBJSA had legal issues and would not stand up to a court challenge” was the primary reason given by many lawmakers for 8 years for denying justice and a hearing on the bill, and yet remains today.  Even though the Council’s Legal will not share with the SBJSA prime sponsors, the media, or give public statements on any legal details substantiating their legal concerns, we know from the real estate lobby’s past and present presidents that after conferring with City and Council’s Legal Departments they still maintain the bill has legal concerns.  Legal concerns they have never submitted amendments to the bill’s prime sponsor to change the bill to satisfy alleged legal issues; legal concerns that will likely only be brought up again after the hearing. If this injustice happens again it would not be in the spirit of democracy that Speaker Johnson promised when he said the SBJSA would receive a vigorous debate by a progressive council.

 

In an interview with the editor of the Villager, Lincoln Anderson,  the former president of the Real Estate Board of New York, Steven Spinola said after conferring with attorney’s with the Corporation Counsel, “ It’s not even clear if it can be legally implemented. We are absolutely convinced that the City Council, the mayor do not have the power to impose control on the leasing of properties.  At the very least, it would have to go to the state, and we’re not sure that the state would have the power to impose this.”

The present president of REBNY, John Banks also shares the same viewpoint after speaking with attorney’s in the Council. To add more confusion on the bills’ legality, a recent report by the City Bar Association raises questions if the council even has the authority to pass any legislation regulating commercial landlords. 

 

The desperate small business owners have waited 9 years for justice and an honest hearing to address their crisis and they deserve the total focus to be upon their testimony without having this cloud of legal doubt overshadowing the hearing. The testimony of hard working small business owners, who face a crisis to survive, must matter if democracy, justice and fair treatment mean anything today at City Hall.  To assure justice in your committee, you must remove all legal concerns and thus avoid the travesty of democracy that occurred after the last hearing on the SBJSA. The stated goals of the last Chairman David Yassky of finding the best solution to stop the closing of small businesses was achieved with the testimony of the small business community and progressive lawmakers coming together to create good government by finding a good solution to end this serious crisis. All this good government democracy was wasted and ignored, by a single act, the alleged “legal concerns” after the hearing.  Democracy was thrown aside by people who did not speak up at the hearing nor have made any effort in 9 years to resolve what they created.  Not one word to explain these mysterious legal issues.

 

2. To follow the successful democratic act and oversight responsibilities of former Small Business Committee Chairman, David Yassky in stating at the opening of the last hearing on the SBJSA, that the sole goal of the hearing is, “to find a real solution to stop the closing of the small businesses and save jobs. There was no option to do nothing or our small businesses will disappear.” He called upon the administration to “give the committee solutions,” while other committee members made clear they were not interested in hearing all the programs of the SBS, but instead wanted solutions to save the businesses and solutions to stop the illegal extortion growing in NYC.  

 

What triggered the hearing in 2009, as well as the goal of the Committee was the same situation that exists today in NYC.  It was stated accurately by the commitment of Speaker Johnson, “our small businesses  face a crisis, yes a real crisis caused by sky high rents and I will find a solution.”  In 2009, this crisis was exposed by the results of the largest independent study of immigrant owned businesses in NYC. *USA Latin Chamber study attached

 

The study showed the foundation of the crisis was the commercial lease renewal process being one sided and unfair. Also, it proved that it was not just sky high rents killing our businesses and costing NYers their jobs but also contributing to the crisis are short term leases, illegal extortion and increased property taxes which were also detrimental to the future of business owners.

 

Therefore, to find the best solution to stop the closings of businesses and restore stability the focus of the hearing was on the commercial lease renewal process. This was appropriate timing as the SBJSA’s purpose was “to create 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.”

 

I am aware the new REBNY talking point on SBJSA  for lawmakers is, “the SBJSA is not a silver bullet and other measures need to be passed into law.”  I strongly disagree and ask the Chairman to follow what Chairman Yaskky did in order to keep the focus upon only those “measures” that deal directly with the commercial lease renewal process.  As well as those “measures” that seek to level the playing field for commercial tenants in negotiating new lease terms. To do anything else would be a diversion from the crisis and the main cause of it.

 

The last hearing on SBJSA, as well as your hearing must be a RIGHTS hearing. Who gets rights when a commercial lease expires?  Who needs rights to survive and negotiate fair lease terms when a lease expired?

 

There are two valid reasons for your committee to not encourage testimony from the “other measures.”  The first is the “other measures” have nothing to do with the commercial lease renewal process and therefore would not add any benefit to finding a real solution to the crisis caused by the commercial lease renewal process.  In fact, if any other measure were enacted it would  keep the status quo and not save a single business or job.  Most “other measures” were created by REBNY thirty years ago and all were rejected then as keeping the status quo. All these “other measures” give NO RIGHTS to the commercial tenant but instead keep all the rights solely in the hands of the landlords.

 

The second justification of not having proponents of the “ other measures” highlight testimony is due to fairness and justice for those desperate for a real solution.  For 9 years the supporters of the “other measures” have had many platforms easily availed to them by a friendly administration and political lawmakers anxious to impress a powerful lobby. . The supporters of SBJSA have had NONE.  This one day in 9 years must in all fairness and for justice, give the proponents of the SBJSA and those wanting a real solution to stop the closing of small businesses and needed rights to survive and negotiate fair lease terms their full day of hearing. Not only do all the other measures, proposals, and  “tools in the tool box” have nothing to do with the crisis, they have nothing to do with the purpose of the  SBJSA and thus do not offer a solution. 

 

It would be an insult for desperate small business owners to see valued time wasted by those with hidden agendas giving disingenuous statements on wanting to address their crisis and save our small businesses but promote “other measures” knowing they would keep the status quo.  An even bigger affront to mom and pop owners would be the unwelcome agencies promoting their failed programs.  The small business owners do not want to hear from those who have remained silent or covered up as this crisis has grown, nor to hear from agencies that have never owned a small business on how to “grow their business” - instead of how to save their businesses, from the one most significant problem they face, their unfair lease renewal.   

 

 Our immigrant small business owners are a “socially deprived” class in NYC, and their  businesses closing in record numbers with nothing done is proof of this reality. Others are being routinely extorted for their life’s savings while our government does nothing to protect them. The acceptance of exploiting and extorting immigrant business owners is a testament to this anti immigrant policy that exists at City Hall and a statement of the need for a just hearing.  It is imperative that you give them the justice and good government they deserve and never allow the mockery of democracy that occurred after the last hearing to occur again.  If you agree with my two actions, please let me know and I look forward to working with you to assure an open and just hearing for our small business owners, one where a real honest solution to stop the closings is the outcome.  

 

 

Respectfully,

 

Sung Soo Kim,  Founder SBC