BIDS ARE THE GREATEST CONFLICT OF INTERESTS ORGANIZATIONS IN NYC
In Part I * of this series on BIDS, we highlighted how every lawmaker, agency or organization’s spokesperson would always, on every occasion dealing with small businesses, stress that our small businesses are the “backbone of our economy.. job creators..etc.” We claimed that none of these statements were sincere because nobody in government making the claim was committed to taking any real actions to stop the closings of our businesses and save the jobs business owners created. Instead, lobby controlled lawmakers only produced a decade of political theater of “do nothing” and complicity to shameful rigging from City Hall during a growing crisis. In truth, politicians’ disinformation and inaction was keeping the crisis alive and making the crisis worse. A crisis spreading like wildfire to every main street while the only real solution to stop the closings, Small Business Jobs Survival Act, Jobs Survival Act, with 28 sponsors was being bottled up in committee for over 10 years. The BIDS played a major role in this lobby orchestrated denial of economic justice for our small business owners, and still does today.
The Jobs Survival Act giving rights to business owners when their leases expired to negotiate long term fair lease terms which would allow a reasonable profit was in “plain sight” for over a decade to act upon. To call for a vote by progressive lawmakers with the political will and courage. Also, in “plain sight” was the collusion of the Democratic leadership with the real estate lobby to rig the system to stop any vote on the Jobs Survival Act. With the help of SBS and the BIDS it created, the “plain sight” rigging was successful, and still is today. The power of the real estate lobby was flexed in the last election when not a single incumbent or citywide candidate even dare to mention the bill or called for a vote on it.
For over 10 years what lawmakers and their collusion partners, especially the SBS and BIDS, will not ever mention in their disingenuous rhetoric is that our small businesses are also the “backbone of our city’s revenue collectors.”
Our lobby corrupted City Hall purposely hides this reality from the public, and for good reason. Telling the truth about our small businesses would expose the unethical principles and lack of moral courage of our lawmakers in allowing the backbone of our economy, major job creators, and top revenue collector to be forced out of businesses just to make a handful of their campaign donors wealthier. More despicable, these ambitious politicians used their offices to cover up the dire consequences to our business owners, employees and society if legislation is not soon passed to stop the closings of our long established businesses, and hard working entrepreneurs become extinct in NYC.
In Part I, we list several revenue sources which our city’s 200K plus businesses collect each day. Collectively these sources make valid the claim our businesses are a top revenue collector for our city’s budget. What we omitted from our list was the reality our 200K businesses pay the lions share of our city’s commercial landlord’s property taxes. Unlike residential renters in NYC, commercial tenants have absolutely no rights when their leases expire. The landlords have 100% control of all terms of a lease and thus the future of every business owner when their leases expire. Which means, if the landlord wants the tenant to pay their property taxes, or any taxes, then the business owner must agree to pay it or risk being thrown out of business.
The reality that all our city’s commercial landlords have control over every businesses’ major cost, rents, as well as, control over how much tenants pay of their landlord’s property taxes, another major cost, has produced the greatest conflict of interest ever in NYC. Who has any control over our property owners, no one? The real estate lobby has funded enough lawmakers to assure the status quo at City Hall. A conflict of interest exists in NYC at the worst possible time for our small business owners.
SBS made BIDS the arbitrators of the future of
main street merchants.
The Department of Small Business Services, SBS, empowered property owners by creating BIDS on every main street in NYC. Under the disguise of providing essential services and economic development for a district. The SBS gave BIDS excessively exclusive authority for influencing economic policy impacting the future of main street merchants. As the majority of BID boards, the SBS put the property owners in charge of this power. The horrific records of the property owners demanding exorbitant rent increases which resulted in record long established BID merchants closing, as well as demanding merchants pay their landlords’ rising property taxes, ignoring the illegal extortion of cash by unscrupulous landlords against immigrant owners, and ignoring the merciless short term leases of sometimes month to month or one year would make BIDS property owners being the voice of reason for merchants suffering a travesty of justice.
No BIDS should have been created during a citywide hyper real estate speculation which resulted in creating the world’s largest commercial rental bubble!
The promotion worldwide of NYC as the best city for real estate investment, sparked real estate speculation citywide. The prolonged unchecked speculation’s negative outcomes were allowed to spread unregulated to every main street threatening the survival of long established businesses and wiping many out.
When big international banks and national chains were bidding for prime locations on vibrant main streets, rents went insane and wrecked havoc upon the commercial rental market. Long established mom and pop merchants could never compete against banks or chains for space on the very main streets they worked so hard to stabilize and make vibrant. Main streets that property owners were reaping windfall profits by replacing their smaller merchants with deep pocket big businesses. Property owners could not remove long established businesses off their “oil fields” fast enough.
What action was City Hall going to take to stop the closings of these smaller established businesses that could not possibly pay these insane rents? While smaller and older, the public favored their local merchants and knew the “rents were too damned high” which would threaten their favorite mom and pop. Couldn’t something be done by lawmakers to stop the closings of these core neighborhood successful and community loved businesses? Something was done by progressive lawmakers in June 2009 to stop the closings. Thirty two council members sponsored the, Jobs Survival Act, but the Democratic leadership stepped in and sided with the lobbies and power brokers to stop a vote on the bill and then successfully bottle it up in committee for years, still today.
The BIDS would be formed in this “rents are to damn high” period to keep both the merchants and public in the dark that the Jobs Survival Act existed and was the only real lifeline to save our businesses. Also, the BIDS would give credibility to the countless useless programs and initiatives being schemed and churned out at City Hall to distract from their failure to find a solution to stop the closing of businesses. How successful have BIDS been in hiding the crisis caused by property owners demanding exorbitant rents forcing businesses to close in record numbers? How successful in hiding legislation that would immediately give owners a real lifeline, a fighting chance, that has exists for over 10 years bottled up in committee?
There are 76 BIDS in NYC, there are likely not 76 small business owners or 76 New Yorkers who have ever heard of the Jobs Survival Act. The atrocious outcome of empowering property owners to make policy for main street businesses at the same time the property owners are reaping windfall profits from main street businesses is the worst case of conflict of interest possible. The willful ignorance of lawmakers of this obvious conflict of interests and stupid and insulting decision of making property owners the majority board members of a BID during a crisis which the property owners themselves helped create cannot be used, for a very good reason.
BIDS have on all their boards: elected officials, a local council member, Borough President, Mayor, and Comptroller. The majority of these elected officials, if not all, were helped to be put into office by the funds from the real estate lobby, developers, landlords, and power players partnering with real estate money. This BID board structure created another major conflict of interests. On one side of the BID board table you have property owners who do not want to be regulated and want to keep the status quo making them richer. On the other side of the board table are lawmakers who abandoned their progressive values for real estate campaign funds and power. Once in power they too want to keep the status quo. Property owners getting rich off of real estate speculation and ambitious lawmakers gaining political power from the same real estate speculation are sanctioned through BIDS to be making policy to help main street businesses thrive again? Really? How has that worked out for mom and pop?
The majority Council Members of BID boards are also sponsors of the Jobs Survival Act, 28 sponsors. How is it possible that a crisis spreading year after year from Borough to Borough to every main street forcing businesses to close and yet not a single BID board Council Member recommends supporting the Jobs Survival Act, which they are sponsors? Council board members know first hand that the bill they sponsored would stop the closings and stabilize main streets and save jobs. It is very possible BIDS made no effort to recommend any solution to stop the closings of its businesses because some of its major political board members were known to have joined in the Collusion with the real estate lobby. Lawmakers who would use their offices to rig the system to stop a vote on the Jobs Survival Act. Also use their role on BID boards to silence any mention of this real lifeline, Jobs Survival Act.
How many BID board politicians showed up at a press conference held by community activists protesting the forced closing of a popular business, and told the truth for a change. To tell the community activists and business owner the business did not have to close if their elected official had the courage to stand up to the real estate lobby and vote the Jobs Survival Act into law. Another clear conflict of interest.
It is common knowledge among advocates that former Mayor de Blasio took huge amounts of real estate funds in his race to be mayor. The same with former Comptroller Stringer and most of the city’s Borough Presidents. Few voters knew of former Manhattan President Brewer’s major role in serving big real estate by trying to kill the Jobs Survival Act and substitute a bill written by the real estate lobby 30 years ago*. All used their offices to support the decade long lobby’s campaign of disinformation, rigging and outright lies to stop a vote on the Jobs Survival Act. The BIDS are Not for Profit organizations and as such are able to gain funding from Mayoral agencies, Borough President’s office, and Council’s budgets for added grant funding. Funding for projects the BIDS were not qualified or competent to carryout and far outside of the original intent of “cleaning sidewalks.” Yet, another conflict of interests, BIDS cover up the main street crisis and give political cover to their lawmaker board members for doing nothing to stop the closings or landlord abuses in BID districts and the BID in return will be rewarded with unwarranted grant funding.
Another conflict of interests, board members serving the policy of other board members in order to gain BID funding.
It is just not the creators and benefactors of high rents that make BIDS a conflict of interest but also the growing property taxes. A by product of the hyper real estate speculation was the dramatic increased property taxes. Luckily for commercial property owners in NYC they can pass along any increases in their property taxes to their business tenants. The BID property owners have all the rights when their tenant’s leases expire. NYC’s commercial lease renewal process is perfect for the landlords in a hyper speculation period which produces insane rents and increased property values and higher taxes to follow which they can easily pass along. This win win one sided and grossly unfair process also allows the landlord to determine the length of the leases, which in this environment have gotten shorter and shorter to allow the landlords the best opportunity to seek deeper pocket tenants.
The BIDS property owners do not want to pay their increased property taxes, therefore they will fight any proposed law giving rights to their tenants when their leases expire. Another conflict of interests.
Entrusted with the power of oversight, the BID’s board property owners majority had a choice to make in addressing the record businesses closing on BID’s main streets. Either commit to fulfill the stated mandate of the SBS that BIDS promote economic development, rejuvenate the local economy, and provide the “essential services” and tools to help businesses start, manage and grow their businesses. Or the choice to keep the status quo and “do nothing” to end the crisis that forced BID businesses to close in record numbers.
Would BID property owners show some respect for the investment and scarifies local businesses made to be successful, that built up main streets, which BIDS now manage? Would BID property owners recognize that for merchants to continue to be successful, grow and create jobs every business owner must be able to make a reasonable profit? Or would BID property owners only care about taking advantage of the hyper real estate speculation’s creating out of control rents that would maximize landlord’s windfall profits? Prior to the virus crisis, a walk down any BID main street lined with empty storefronts, many empty for years, answers the question of who the BIDS decided to serve.
In the future it will not be the rents that force the majority of businesses to close. The empty storefronts on every block prove the rents are way past the tipping point of being too high to sustain profitability for businesses. The future cause of businesses closing will be the unpredictable increase in property taxes that will surely grow in the future. With fewer businesses to pay their share of their landlord’s tax, the percentage of property tax increase paid by a business will greatly increase. The property taxes will increase in the future with fewer small businesses collecting revenue for our city’s budget. No voice, no rights, no profits, no future, a lose lose situation for our small businesses.
If you lost a bet on the Super Bowl, here is a sure bet, the BIDS will take the lead in the Adams administration to KILL the Jobs Survival Act and substitute a lobby created bill that gives no rights to tenants and keeps the status quo with landlords in full control. Even if the end of the Jobs Survival Act would mean the end of the American Dream for most business owners and an economic catastrophe to follow for New York.
The SBS’s anti- small business action of creating more BIDS would create the greatest conflict of interest ever in NYC, making a growing crisis worse. The conflicts of interests, combined with the role the BIDS played in keeping the merchants and public in the dark of the true dire state of their small businesses and who caused it, as well as hiding and later openly opposing the Jobs Survival Act all justifies the claim that BIDS played a major role in creating our main streets “empty store blight.”
The One Single Event to Open the Door to the Truth of the Victims of our City’s Economic Policy and the Crisis created!
The event that triggered the largest survey of Hispanic Small Businesses*.
The survey which triggered the first public acknowledgment from progressive lawmakers that a crisis existed for our small businesses.*
This acknowledgement triggered the first honest hearing in Council to find a real solution to stop the closings of our main street businesses.*