BREWER PRESENTS PROPOSALS TO SAVE SMALL BUSINESSES ON UWS AND ELSEWHERE

brewer storefronts
Gale Brewer, flanked by the owners of Halal Guys on West 95th street, speaks about saving small businesses.

By Anya Schiffrin

Manhattan Borough President Gale Brewer unveiled on Monday a new raft of proposals aimed at helping small businesses maintain their foothold on the Upper West Side, despite unrelenting pressure from landlords seeking to raise commercial rents.

Speaking at a press conference held at the The Halal Guys store on 95th and Amsterdam, Brewer proposed that the City Council implement a mandatory but non-binding negotiation period for landlords and tenants in which they could discuss rent increases. During this period, small businesses would be given the option of a one-year lease extension with a rent increase capped at 15%. “We want to ensure that small businesses are not blindsided,” Brewer said saying she hoped the proposal would help avert a “catastrophic small business interruption.”

Saying that street vending is often a “gateway” for small business owners, especially, immigrants, Brewer also proposed more support for small street vendors saying in a press release that “overhauling New York City’s antiquated policies governing street vending and lifting the 1980s-era cap on vending licenses will jump-start small business that could eventually transition to a store-front model as The Halal Guys have successfully done.” The Halal Guys began by selling food from a cart on 53rd street and Sixth Avenue and now have storefronts on both 14th and 95th streets.

Brewer also called for possible “condoization” of small businesses by helping them buy space as a commercial condominium, saying this could be a “win-win” for both landlords and tenants. “This model is already possible under current law,” her office noted in a written statement. Brewer proposed a pilot program saying that some spaces could be turned into condos. She cited the 504 loan program from the US Small Business Administration, which provides “growing businesses with long-term, fixed-rate financing for major fixed assets such as land and buildings.” She noted that creating “low-intensity” commercial districts on quieter streets can take pressure off demand for real estate on high-traffic commercial streets.

Starting on May 6, Brewer will hold discussions around Manhattan to discuss her proposals with neighborhood business owners and residents. She also supports reform of the commercial rent tax, developing micro-credit options for small businesses and the development of apps which can provide small businesses with information about factors that could affect their businesses including subway delays and sidewalk and construction repairs.

The Upper West Side has faced an influx of chain stores, including banks and drugstores such as Duane Reade and CVS, and the decline of Mom-and-Pop stores has adversely affected the quality of life, Brewer said. She said that nine businesses on Broadway between 102nd and 103rd streets are now threatened by rent increases. “It’s rent, it’s always rent,” Brewer said, mentioning the closure of Grossingers bakery on 86th and Amsterdam, which was founded in 1946 and closed in 1991 and Big Nick’s diner on Broadway, which was founded in 1962 and shuttered in July, 2013.

When she was a council member for the Upper West Side, Brewer got a law passed limiting the size of storefronts on certain avenues to dissuade landlords from signing with chains.

Asked why some landlords evict small businesses but then keep their storefronts empty for years as happened with Movie Place at 237 West 105th street, Brewer said she had repeatedly tried to find out why this occurs. Landlords don’t get a tax deduction on the lost income she said, it is “simply that many times [the landlords] want to wait for the chains to come in.”

Brewer’s proposals are different from the Small Business Jobs Survival Act, originally introduced in 1986 by City Councilwoman Ruth Messinger, which called for arbitration of rent increases. That proposal has been stalled for some 30 years.

Other cities, such as Paris and Amsterdam, have managed to preserve a rich diversity of small businesses through a combination of social pressure, zoning regulations and rent control. Asked if she had studied regulations in place in other cities, Brewer said “I look at all solutions but I’ve not looked at Amsterdam or Paris. I have too much to do here.”

Research help provided by Matthew Fay.

NEWS | 28 comments | permalink
    1. webot says:

      Was there any mention of cutting the City of NY’s red tape, approvals process , tickets, inspections, regulations, required sick leave, threat of lawsuits, high wages , etc. that strangle and stifle small businesses?

      • blewvelvet says:

        There should be a mention about asshole-elitists Ayn Rand business-types who end up paying NO federal taxes except on a smaller percentage of the profits!

        I end paying more in taxes as a working employee through my paycheck and dont get to expense my rent and other bills against my income.

        But businesses do.

        I know….as I do corporate accounting/recordkeeping and yearly file the corporate taxes in our company.

        Some people don’t realize how good they have it…and then complain about high wages and required sick leave for fellow human beings.

        Horrible people!

        • webot says:

          Umm take your meds?

          We are talking about SMALL BUSINESS here.

          Who bare the brunt of the burden.

          Without them taking the chance and starting businesses there are not employees to be hired and work.

    2. blewvelvet says:

      I LOVE GALE BREWER!!! She does more for the working class in the UWS… than all of them combined!

      Can we clone her???

      • Paul RL says:

        Why, so we can have more homeless shelters, more panhandlers, and an even lower quality of life?! After what happened to the West 90s on her watch, that’s the last thing we need!

        • cs says:

          Shelters and resurgence of pan-handlers was basically the result of Mayor Bloomberg’s administration. (And since hard to address, has continued since Bloomberg) The proliferation of street vendors all over NYC – even in front of the Metropolitan Museum of Art – was also due to Bloomberg.

          • webot says:

            Before blaming Bloomberg (I thought those days are over) see above for the policy to remove those pesky rules for street vendors.

    3. isc says:

      Too late for our dry cleaners on 100th and CPW – I’m sad they’re moving

    4. Scott says:

      Let’s get real here. When Gale Brewer was our councilmember, small businesses closed left and right, KFC moved in and homeless shelters housing violent schizophrenics replaced boutique hotels, which she fought tooth and nail. Openly and proudly I might add. She’s small business’s worst nightmare.

    5. ws says:

      Gale is a well meaning fool. Mom and pops charge more because they are inefficient, uneducated (in the most advanced forms of merchandising, finance, inventory management etc). New Yorkers love chains for their good prices, lighting and display, reliability, and cleanliness. The best mom and pops can become chains like fairway, modells and duane reade but most are not nearly good enough. Giving these overpriced stores an advantage is a bogus form of sentimentality – the good old days in NYC SUCKED.

    6. Paul RL says:

      Gale Brewer and her cronies were instrumental in setting up the UWS as a dumping ground for homeless shelters and other supportive facilities. Bloomberg indeed took advantage of this, but the blame lies with Brewer. Her shortsightedness has left us with an oversaturation of aggressive panhandlers and mentally unstable people roaming our streets. incidentally, the tourists that she hated so much (and got rid of) infused money into the neighborhood, and helped keep our small businesses running.

    7. Jeremy says:

      Duane Reade and CVS have not “adversely affected the quality of [my] life” in the least. I’m not sure what she’s talking about, but stores that sell all the basic stuff you need 24 hours a day are always going to be a net positive.

      Heck, even if you don’t shop there, it’s nice to have a populated, well-lit storefront that keeps the street feeling safer at 4am.

      And to be 100% clear about the causes of some of these things, here’s WSR’s description of the Big Nick’s situation. Gale buries the lede a bit in the story above:

      “The restaurant on 77th and Broadway has been around for 51 years, but recently the owners of the Hotel Belleclaire upped Nick’s rent to $60,000 per month from $42,000 after the building’s property taxes were raised.”

      • Bruce Bernstein says:

        sorry, but the huge commercial rent increases on the UWS are not primarily because of property taxes. Perhaps — perhaps! — these play a small part. Perhaps they play no part at all. of course the landlord is going to say the increase is because of property tax increases, but i would like to see the actual figures. In the case cited, the Hotel Belleclaire’s taxes would have to have gone up 200K+ per year… and then they tried to pass the entire amount on to one little storefront. that doesn’t pass the smell test.

        • Jeremy says:

          You’re welcome to your conspiracy theory on this, but I trust Avi’s reporting on the issue.

        • webot says:

          Property taxes are public record and online.
          http://a836-acris.nyc.gov/CP/

          But you know that already.

          You can find an article to back a archaic hair-brained idea from some extreme left wing biannual , but you can’t find building taxes.
          I find that hard to believe.

        • Bruce Bernstein says:

          Hotel Belleclaire doesn’t own the propert.

          Property taxes did go up substantially during 2014: about 19.34%. However, Big Nick’s rent went up almost 43%. and apparently he was subleasing from the hotel.

          so perhaps a rent increase from 42K to 50K would have been justified. this is in line with property taxes. the Belleclaire was gouging him for an extra 120K a year.

          btw, in general commercial leases in NYC have a property tax escalation clause.

          it is block # 01168, lot 1784, if anyone wants to look.

          • Bruce Bernstein says:

            when did Big Nick close? was it 2013 or 2014? if 2013, that was before the property tax increase.

          • Bruce Bernstein says:

            I apologize… my math (and logic) above was faulty. I VASTLY OVERSTATED the possible role of property taxes in Big Nick’s increase.

            Let’s say that property taxes make up 10% of Big Nick’s rent — thus, 4.2K out of 42K per month. So the city raises property taxes by 20%, and the landlord and master lessee both pass this on to Big Nick. He was paying a pro-rated share of the increase… and this will continue. So a 20% increase on 4.2K = $840 per month. Even if the taxes make up 20% of the cost of the lease (this seems way too high), it would still be only $1,680 a month… out of an $18K per month increase.

            So as I originally stated, property tax increases are used as an excuse but can account for only a small portion of that sort of rent increase.

            As Gale Brewer accurately said, the small businesses are leaving the UWS because of “the rent, always the rent.”

            • webot says:

              “As Gale Brewer accurately said, the small businesses are leaving the UWS because of “the rent, always the rent.””

              wrong , wrong. period wrong.

              Sometimes it is the rent, just a simple way to find a common demon to deflect from the failure of the government. Sadly reminds me of mid century Europe.

            • Jason says:

              If the market did not command it, the landlords would not charge it. They are in the business of making money, isn’t that what business is all about after all? Landlords do not, not should they, perform a public service.

            • Cyrus says:

              Bruce Bernstein says: ” I apologize… my logic above was faulty”

              Yes. Yes it was.

      • C says:

        There are two primary drivers of cost increases which, in turn, drive increases in rent for commercial tenants. The first is property taxes, and the second is energy costs. I know this from serving on the board of two co-ops on the UWS over the last ten years, both of which had commercial tenants, who had to deal with this when leases expired (not to mention residents dealing with double-digit increases in maintenance costs).

        Big picture, property taxes have roughly doubled over the last 5 years, and energy costs have gone up at least that much (despite the decline in oil prices this year). All of this implies roughly 15-20% annual increases in the biggest cost components of a building. Obviously annual rent increases are lower because these two do not represent the totality of a building’s costs (but they are usually the majority, more than 50%), but it has driven significant rent increases for commercial tenants upon expiration. It is easy to understand why property taxes are going up quickly: real estate values are increasing, and the city already has a high income tax, so the property tax is where the city is now finding money.

        Legislation like commercial rent control or the similar bill conceived by Ruth Messinger would have obvious consequences: building owners would simply cease maintaining their commercial spaces, and would do everything in their power to avoid renting to a commercial tenant that wasn’t some kind of national chain with a lot of scale.

        • webot says:

          Thank you C. So well said.

          You stated the truth clearly and factually. Much better then I have. I am continually floored how people just do not or refuse to understand that so much of our issues come from a bloated inefficient government. I also do not understand why the politicians do not want to make things better. The latest example is raising the transit fair -which affects the working poor the most.
          They refuse to cut costs ,modernize or strive for efficiency. Ask anyone who has ever dealt with any city agency, particularly small businesses.

    8. Jason says:

      There is a reason why chain stores succeed, and become chains, people like them and want their services! What is wrong with chain stores moving in? They would not move in if they were not patronized and did not provide a service people wanted at competitive prices. I can go to the corner store and buy a battery for twice of what I would be at home depot or lowes, aren’t I allowed to make a living too? It’s amazing to me how UWS’ers are champions of freedom except when it comes to a free market.

      • Jeremy says:

        In fairness, though, Gale’s recommendations presented above are largely an expansion of the free market. The one-year “cooling off” period is an exception, but landlords will just modify their leases to accommodate for that moving forward.

        Her examples of “harm” are terrible, but the solutions seem to expand, rather than restrict opportunity.

    9. denton says:

      Terrible ideas. Ask small businesses how they feel about carts outside their doors who pay no rent or taxes and so can sell stuff cheaper. As to commercial condos, if you can barely afford the rent, how can you afford to buy a condo? However banks and big drug chains might love the idea.

    10. Jake says:

      The last thing we need are more street vendors. Noise, dirt, trucks polluting the air. She loses my vote on this one.

      • Paul RL says:

        While I am squarely in the anti-Brewer camp, I would be remiss if I didn’t mention that I support her position on street vendors. I believe they add color, convenience, and (arguably) safety to our streetscape. I buy from them whenever I can. Sadly, I think they will be the only small-biz guys left in the City, no matter what initiatives are taken to protect our storefronts, and I would like to see more of them.