OP ED

May 1, 2019

 

REBNY TROJAN HORSES COMING!

 

Lawmakers throw “Life Line” to drowning mom and pop, or Noose rigged by REBNY?

 

After remaining silent and doing nothing for 10 years to seek a real solution to stop the CRISIS of the closing of long established local mom and pop businesses, suddenly city lawmakers are just acknowledging the long deteriorating small business crisis, and the tragic consequences of many years of hyper speculation in commercial real estate and the sky high rents and oppressive lease terms this produced.

 

In Oct 2018 a hearing was held on the Small Business Jobs Survival Act, (Jobs Act) unjustly bottled up in committee for 9 years based solely upon a cooked up bogus legal roadblock. The Jobs Act, if passed, gives all business owners the right to lease renewal for 10 year term, the right to equally negotiate with landlords the new lease terms, and an arbitration process if mutual agreement could not be reached. The bill is the oldest pending legislation in City Council history.  The bill has had 12 hearings and has been amended seven times over 30 years and today has 29 sponsors.  If given a vote by the full council would easily pass and end the crisis almost immediately.

 

Instead of moving quickly to amend the Jobs Act and address the crisis with the only real solution, lawmakers continued making the priority of serving the powerful lobby REBNY and continued supporting REBNY’s Trojan Horses, all intended to keep the status quo, distract from actually solving the crisis and stopping the Jobs Act from ever being voted on. 

 

On March 18, 2019 the most small business bills ever, nine (9), were given a hearing before the Small Business Committee.  Council Speaker Corey Johnson summed up the purpose of these bills in a prepared statement, the package of bills discussed are a “critical part of the City Council’s ongoing efforts to help small business in the city.”

 

The key words are “ongoing efforts to help small business,” which judging from the charade of worthless initiatives and more useless studies have only produced more empty stores and record closings. This, “helping charade,” orchestrated by REBNY, has been a monumental failure for the past decade. The priority at City Hall, especially for the self proclaimed progressive lawmakers facing an ever growing crisis that is destroying the backbone of our economy, should have been what former Small Business Committee Chairman David Yassky stated at the last hearing on the Jobs Act in June 2009.  Chairman Yassky, “  It's not an option to do nothing. 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. We cannot allow small businesses to be pushed to the point of disappearance, which is what is happening now.”

 

Yassky’s prediction proved correct and his committee’s selecting the Jobs Act as the best solution to save small businesses was also correct.  Regrettably, for our small businesses and society an oligarchy rules at City Hall (REBNY) and its priority is protecting the profits of real estate investors.

 

With NYC courts evicting on average over 500 businesses each month for 10 straight years, and empty stores on every block, many for years, are these proposals “to little and too late”? How many stores will close before lawmakers stop promoting useless bills and initiatives in the name of "helping small businesses" and start promoting real solutions to save them?

 

The power and control of REBNY over our lawmakers calls for small business advocates to give a warning to small business owners to not put much hope in the same old political progressive rhetoric of lawmakers to “do the right thing” and save them. Especially those lawmakers who remained silent and complicit to the rigging by REBNY for 10 years as a solution to stop the closings set bottled up in committee. Never forget that if economic justice was given small business owners anytime over 10 years, not a single long established business whose customers supported them would have been forced to close. Not a single small business owner would live in fear of their future when their leases expired.

 

How can you trust lawmakers who promote legislation that gives no rights to business owners when their leases expire? Or whose proposals have nothing to do with the “root cause” of their crisis, which is the unfair one sided commercial lease renewal process. Most telling of all of their disingenuous proposals is the reality that not one would save a single small business or a single job, and all would keep the status quo of favoring only the landlords. 

While most of these REBNY TROJAN HORSES seem harmless if passed, several would actually make the crisis even worse by producing even higher rents for small business owners.

 

Just one example of a REBNY created Trojan Horse to substitute for the Jobs Act that would result in higher rents is Assemblywoman Yuh-Line Niou’s bill. On April 12th, Assemblywoman Niou introduced a bill in NYS Assembly titled, "Mom and  Pop Rent Increase Exemption", a tax abatement for limiting rent increases on small businesses.  Her tax abatements to landlords in not new, in fact, it was originally created by REBNY back in 1986 as one of several recommendations to substitute for the original version of the Jobs Act, when then Ruth Messinger was the prime sponsor.

 

Every time the Jobs Act is gaining momentum or a popular business closes and is in the news, tax abatements to landlords is always mentioned by REBNY cronies as a viable solution and substitute for the bill.

 

Not surprising, considering tax abatements offers no rights: to tenants to remain in business, negotiate fair lease terms, has nothing to do with length of leases or protections from extortion or paying the landlords’ property taxes, the biggest champion of the bill is REBNY!  This bill offers nothing for the tenant and everything for the landlord, which translates into keeping the status quo.

In a March 26, 2015 Villager interview by editor Lincoln Anderson with Steven Spinola, past president of REBNY, when asked what was Spinola’s solution to address the high rents?   Spinola said,” he is in favor of giving “tax incentives” to landlords who work to keep commercial tenants in place.”

 

Assemlywoman Niou is not being totally honest with her constitutes or small business owners.  She is giving false hope that her bill will actually help stop the closing of small businesses and she is ignoring the documented facts and greedy landlords’ actions, her bill would result in higher rents and higher taxes for property owners in her district, as well as shorter term leases.

 

This is the fact Assemblywoman Niou does not want her constitutes to know about her REBNY created bill.  In 2016 Brooklyn Borough President Eric Adams requested from the Independent Budget Office an examination of the cost to implement a property tax abatement program being considered. The target area was East New York rezoning area comprised of 218 small businesses. The goal of the program would be to “offset an anticipated rise in rents for small commercial tenants once the East New York rezoning was implemented.

On July 27, 2016 Independent Budget Office Director Ronnie Lowstein wrote President Adams of his offices’ findings. * see attached.

 

The estimates cost of tax abatement would be between $4.4 and $10.6 million dollars depending upon rate of rent increases.  The truth of this bill was spelled out clearly. No protections for tenants on how much rents could be increased nor how often landlords could claim tax credits.  Landlords could give shorter term leases and get tax breaks every few years if desired. Thus, the law may actually lend itself to landlord abuses and unintended consequences of allowing landlord to raise commercial rents much faster then they otherwise would have when businesses’ lease expired.  In fact, this law would reward the landlord to grossly exaggerate the intended rent increase in order to gain higher tax benefits.  By exaggerating the rent increase the taxpayers would be subsidizing both the tenants’ rent and landlords’ taxes. 

 

Assempywoman Niou’s bill is a win win for REBNY’s members and huge loss for small businesses and property owners.

 

The public who love their mom and pop stores and good government must ask all lawmakers who are proposing these REBNY bills only one question, “will their bill stop the closing of small businesses?”   If the answer is NO, then ask why are they proposing legislation in the face of this crisis that does nothing but keep the status quo?