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It’s been 3 months since the City Council hearing on Small Business Jobs Survival Act, now what?

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It’s been three months since the October 22nd, 2018 City Council hearing on the Small Business Jobs Survival Act, now what?

You may have noticed there’s an abundance of vacant storefronts plaguing what used to be busy Main Streets in every neighborhood across the City.  There is a growing crisis in NYC that’s decades in the making but there’s also a legislative solution that has been bottled up in Committee. A bill to stop the closings of Mom and Pop businesses called the Small Business Jobs Survival Act (SBJSA) that City Hall continues to block from reaching the floor for a vote. The SBJSA will give commercial tenants: the right to renewal, rights to equally negotiate for new lease terms and the right to an arbitration process if a mutual agreement can’t be reached.

A little history: The SBJSA was first introduced into City Council in 1986 when the crisis of good business being forced to close by exorbitant rent hikes began. Instead of voting on the original version of the SBJSA which had the majority of council members as sponsors, former Speaker Vallone and Mayor Koch created a special commission comprised of big real estate, banks etc. to study the problem. Advocates called it the “Limousine Commission” because it’s wealthy members arrived to meetings in limousines. Not surprisingly, the stacked Commission did not support the original version of the SBJSA giving rights to business owners.

The closest the SBJSA ever came to getting a vote was in 2009. The bill had an honest hearing seeking the best solution to stop the closings of small businesses. The SBJSA was selected as that solution and had the unanimous support of the Small Business Committee and 32 sponsors. Former Speaker Quinn, prohibited the bill from being voted on citing unsubstantiated claims that the bill had “legal problems” even though the City’s own law department (Corporation Counsel) had testified in 1988 at a special hearing that the bill was not only constitutional but NYC had the authority to enact it.

When former Speaker Mark-Viverito took over there were high hopes the SBJSA would get a hearing and vote since she was a “proud sponsor” of the bill as Council Member. Even though she committed to holding a hearing, that never happened. Instead of solutions, she promoted studies and useless initiatives.

Under new leadership, Speaker Johnson made good on his commitment and held a hearing on the SBJSA in October. Unlike his two predecessors, Speaker Johnson made clear that our small businesses faced a crisis to survive and committed to finding a real solution to stop the closings of long-established successful businesses. This is the eighth time the SBJSA has been introduced and the 12th hearing on the bill.

At the hearing, the powerful real estate lobby the Real Estate Board of NY (REBNY) came out in full force against the bill donning blue caps erroneously labeling the bill “commercial rent control.” It was made abundantly clear by the Speaker and other electeds that the bill “like all legislation must be changed” and that it was “not a silver bullet” and it should not include protection for “Goldman Sachs firms”.  As I testified at the hearing, the bill has already been changed seven times. Prime sponsor CM Ydanis Rodriguez stated he is open to changes as long as it doesn’t take rights away from commercial tenants.

It’s been three months since the hearing, so where are these changes that everyone proclaimed are so necessary?  Or was the hearing just “political theater” setting up another stall tactic to deny rights to desperate business owners?

The only developments since the hearing are electeds promoting a vacancy tax, meaning fining landlords for keeping their storefronts empty.  As a supplement to the SBJSA it would be fine, but as a substitute it’s ridiculous for a few reasons.  First, it would require Albany to enact it. Second, it won’t stop a single closing or save a single NYer’s job. And third, even if it passed a landlord could simply keep his tenant on a month to month lease (which is already happening) and once he found his deep pocketed chain he could kick the long-time tenant to the curb, therefore avoiding any tax.

In addition, another stalling bill has been introduced creating…. yet another study.  What on earth is there to study? It’s no surprise there are only three council members who have sponsored this bill and they’re the three prime sponsors who just happen to NOT support the SBJSA.

One of the Prime sponsors is Brooklyn Council Member Justin Brannon who unlike his predecessor, Vincent Gentile, refuses to sponsor the SBJSA. He recently lamented in an oped about all of the vacant storefronts in his district, but the best he can come up with is a study conducted by landlords. A disguised return of the Limousine Commission 30 years later, but this time the crisis is out of control with over 1k businesses closing, equating to 8k jobs lost every month.

Are we to believe this is history organically repeating itself or is REBNY continuing to pull the strings on new puppets pushing the same rigging and stall tactics while blocking a real solution that will stop the closings and has garnered the support of 30 Council Members?  It was just reported that REBNY Chairman William Rudin is working with City Council directly to oppose the SBJSA.  Did the idea of “Limousine Commission 2.0” originate from REBNY? Is our government genuinely trying to find a real solution to stop the closings of our beloved Mom and Pops or stalling to protect the windfall profits of REBNY’s landlord members?

Enough is enough, pass the SBJSA before our small businesses become extinct.Find your Council Member and let them know their job depends on their support for the SBJSA.