Where’d Mom & Pop Go? City Council Passes ‘Storefront Tracking Bill’ to Map Retail Vacancies

By Carol Tannenhauser

Small businesses have shuttered at an alarming rate on the Upper West Side and throughout the city, inspiring proposed solutions ranging from commercial rent control to a vacancy tax.

But City Council Member Helen Rosenthal, Manhattan Borough President Gale Brewer, and City Council Speaker Corey Johnson think it’s necessary to measure and map the problem first, so city officials can understand if and where it’s getting worse.

So, the three crafted a bill they call the “storefront tracking bill,” which the City Council passed last week. It requires building owners throughout the five boroughs to register commercial spaces with the New York City Department of Finance (DOF), creating what Brewer calls “the first-in-the-nation public database of retail spaces and their vacancy status.”

“In addition to being able to look up the occupancy status of every commercial space, the public will have access to…other essential information,” Rosenthal explained. “Small businesses will also have a new, annually updated source of information about available space.”

Here’s how the legislation works, according to Rosenthal’s office:

[It] requires owners of ground level and 2nd floor commercial spaces to register those spaces with the NYC Dept of Finance at the beginning of each calendar year

* Commercial spaces in residential (class one) buildings must also be registered

Registration will be part of the annual income and expense filings already required by the DOF

Building owners who do not register, or provide inaccurate information, will face the same fines they currently do under income and expense statement regulations.

Information required as part of registration will include each space’s:

-location
-size
-occupancy status and current use
-monthly rent and lease beginning and end dates
-contact information for the property owner

If occupancy status or property ownership changes during the first six months of the  calendar year, owners are required to file a supplemental registration

Information about the occupancy status of each commercial space will be posted online

The rest of the data will be aggregated and also provided online. Data will be available by census tract or Council district, and will include:
# of leased and vacant spaces, along with median and average time vacant spaces have remained empty
Median and average size of commercial spaces
Median & average rent, length of lease, and time remaining until lease expires
# of leases set to expire within the next two years
# of spaces with construction documents on file

NEWS | 43 comments | permalink
    1. B.B. says:

      Just as Mr. Miller stated, NYC politicians feel they must do something, and their pandering now creates yet another set of paperwork on top of the reams businesses already are required to submit.

      DOF already has usage information regarding properties.

      So endless hours will be spent circulating information that isn’t relevant to people who aren’t interested.

      Only persons who remotely might want this data are the uber liberal progressive democrats pushing for commercial rent control.

      • Evan Bando says:

        What’s wrong with transparency? It doesn’t cost the store owner anything to fill out a form. In his video, Mr. Miller merely dispelled a rumor that landlords profit from leaving a space empty. He said nothing that explains an alarming rate of empty storefronts in the middle of a robust economy with pedestrian traffic at an all-time high. Transparency is a good thing.

        • Confused says:

          Nothing is wrong with transparency. But it’s not “a form”. It’s “another form”. It’s the ever-increasing burden on business owners. Just like it is “only $0.25 more” added to each cab ride. Those “only” charges now add up to significant dollars.

      • Google, Grubhub and other companies already have much of the data needed. To wait for the city to collect the data will take years. Will the data actually be up to date or useful?

        NYC Open Data is an existing public portal with agency data.

        https://opendata.cityofnewyork.us/

      • Sebastian K. says:

        The only people who have a problem with this are uber conservative Republican oligarchs and their craven lackeys and serfs who want to bring back medieval feudalism and turn the USA into a banana republic.

    2. Westsidegal says:

      Oh great, at least we will be able to track the empty storefronts online now instead of just seeing them as we walk past them.

      • Marilyn says:

        Agree! This does nothing to stop the owners from choosing tax write p-offs at clearly over – rental rates, for properties vacant since 2008. Why not pass legislation that does something???? When this hood was “bad” (eg 70s-80s) there were zero vacancies so how can stores not stay in business now when millionaires abound?

    3. B.B. says:

      Small “mom & pop” or whatever stores are closing because things they sell can be found elsewhere (online) much cheaper.

      Property values in NYC have risen dramatically over past two decades and that in part has fueled rent increases.

      You also have the very real fact the city is changing, and this applies to neighborhoods as well.

      The UWS of 2019 is not the same as 1989, 1979, 1969, or even 1959…

      Powerful socio-economic forces are reshaping urban areas across the USA and world, not just NYC. Paris, London, Berlin, SF, LA, Seattle, etc… all are attempting to cope.

      • UWS_lifer says:

        Yes and yes.

        Once again, B.B. has it right. No surprises there.:)

        Seriously, we need more level headed analysis and rational proposals from our politicians. Lip service and inefficient bureaucracy we already have plenty of…

        B.B. FOR MAYOR!! City Council?? Comptroller? Public Advocate?? Something.:)

      • JJ says:

        I agree with the fact that this is just more paperwork without an actual real-time solution for the businesses suffering or the neighborhood. But there is quality of life piece that you’re missing, B.B. Do you prefer that the only businesses that can afford the market rent should be here, e.g., banks and more banks? Maybe an “elevated” chinese restaurant that sucks?
        I wish the building owners would make the investment in soliciting quality businesses, maybe taking a hit on a cheaper rate for them, to help curate an interesting, vibrant neighborhood.

        I’m glad you’d rather be right and have empty storefronts, as you order everything online. You miss the part that small businesses create a social, interactive neighborhood. They connect people in ways that online communities cannot.

    4. Marci says:

      I can’t claim to understand how mapping and measuring and a lot of paperwork is going to alleviate this problem. Can people who own the properties be forced to rent them out? I don’t know the ins and outs of real estate. All I know that is the UWS is sadly becoming an inconvenient place to live.

      • Jay says:

        Paperwork isn’t going to solve the issue, but politicians like bullet points to show they are doing something even if it’s meaningless. Your tax dollars at work.

      • Nathan says:

        I don’t know, would you be ok with the government forcing you to rent out your spare bedroom? Why or why not?

        (Purely hypothetical, of course, I have no idea if you have a spare room.)

      • B.B. says:

        Unless you are Lenin, Stalin, Peron or some other equally unsavory government official, no, you cannot force property owners to rent or sell.

        Before anyone even starts taxation won’t work either. As anyone knows (or should) from college economics or business classes taxes on a business are just passed along to end consumer in terms of higher costs/prices.

        New York state and city already impose a vast and bewildering array of taxes, fees and surcharges on businesses (including utilities), all of which explain why everything costs more than elsewhere.

    5. Steven Barall says:

      I’ve spoken to several small business owners about this and they all say that unless property taxes are reduced the rents will just keep going up. Property taxes are not going down. Ever.

    6. Sherman says:

      This is ridiculous. What exactly do these politicians hope to accomplish with this “database”?

      The only thing it will accomplish is put more regulatory requirements on and add expenses to landlords (many of whom are small businesses themselves).

      There will also be wasteful costs when the city tabulates this data, ie hiring staff.

      This is bureaucratic nonsense created by a bunch of pandering politicians trying to show their constituents they are doing something about a very complex problem.

    7. robert says:

      I have to laugh when I see this type of articles. There is always a hue and cry about empty storefronts lead by some of our elected and our self appointed community leaders. The main reason there are fewer mom and pop stores on B’way etc is you and me. Yes people on the UWS like to yell about developers, landlords and Trump for all the problems of the world. But we have causes this issue ourselves. Don’t believe me, take a look at your own building the next trash day, you will see box after box from Amazon, Chewy, Barnes & Noble, DSW etc If UWSers put their money where their mouth was things might be different. Since the city and the UWS made its come back real-estate values have gone up. A number of years ago the city council passed a law limiting the size a store on the UWS. This had been tried on the UES and when it was proposed here people warned that the resulting empty store fronts would be repeated on the UWS. Fast forward to today and that’s what we have. Stores must be so small that unless you are selling something small like jewelry, the cost per square foot makes it foolish to open a store on the UWS

      • The Enhanced Commercial District Zoning on the UWS is a result of Gale Brewer deciding that there are too many banks in her City Council District. The regulation did not regulate square footage, it required larger properties to subdivide commercial spaces according to frontage on the avenues. If your property had more than fifty feet on an avenue you have to subdivide with storefronts no bigger than forty feet. Banks are limited to twenty five foot storefronts. To limit chain pharmacies, supermarkets are allowed to have storefronts greater than forty feet. None of these regulations helped small mom and pop businesses, as advertised to help. We haven’t seen an increase in supermarkets either.

        • robert says:

          That’s because supermarkets run on very thin margins, I’m talking here about “real’ supermarkets that average folks can afford, not Whole Paycheck. What Brewer said was a political sop, that all, by the time she did this must mom and pops where long gone or on their way out. A better way to encourage Mom & Pops and/or small biz would have been to give the landlords incentives to rent to them. Perhaps a tax break for the building that declined over a number of year. Some sort of Mitchel Lama for small biz

      • JennyB says:

        Robert,
        You are exactly right. If consumers continue to shop online at the rate they are today, all store front retail will be gone in less than 5 years. Want your neighborhood to be “small business friendly”? Cancel your Amazon Prime account and walk outside and into a store. If you don’t, we’re gone. Simple as that.

    8. Glen says:

      Reducing or eliminating the commercial rent tax would never cross their minds.

      • B.B. says:

        City already made changes to CRT: https://www.cpajournal.com/2018/04/03/changes-new-york-city-commercial-rent-tax/

        Issue is, as one has stated repeatedly, commercial properties (including rental housing) pay the largest share of NYC real estate taxes. Single-three family homes the lowest, and condos-co-ops about second after commercial.

        Property taxes make up a majority of revenue for NYC; indeed the hot real estate market of past decade or so that has lifted land/property vales has also increased assessments. This has lead to city raking in tons of money over past decade. So much money is pouring in Bdeb and city council don’t know what to do with it all. Well they do actually, it has been shoveled out to fund a vast array of liberal/democrat causes as public spending. This and BdeB has vastly increased the city’s payroll.

        Long story short there is only so much “relief” from CRT that can happen before it affects revenue.

        NYC elected officials are loathe to increase rates on single-three family homeowners who pay the least for political reasons. That leaves commercial with what it always has been, a cash cow for city revenue.

    9. Bronx Boy says:

      I don’t know that this is the answer, but gathering information is the first step in confronting a problem.

      The empty storefronts are a real problem (for me, anyway). If Amazon is making retail more competitive, then rents should be going down. Instead they go up, small stores can’t pay them, and so there’s a blight of vacant spaces.

      There is some perverse incentive for landlords to not lower rents. We’ve read that it has to do with tax breaks (not really, but there’s that thing about assessed value), waiting for a bank or a discount drug store, and making the building more valuable to a potential buyer.

      None of these ring wholly true to me, and if a registry would help make clear why landlords aren’t cutting rents to lure commercial tenants, which is what Adam Smith says should happen, I think it’s a good thing to try to find out why.

    10. Ellen Schreiber says:

      It was explained to me that there is an advantage for landlords to raise rents even if it leaves the stores empty. It seems that when landlords go to banks for loans and lines of credit they list how many rental properties they own and how much rent they are charging. Up until now they are not required to tell if the store is vacant or for how long it has been vacant. On the landlords books it looks like they have valuable assets in the high rents.
      New legislation will require landlords to disclose how many of these high rental properties are actually vacant (and for how long).
      Internet shopping is not really a good argument for the lack of Mom&Pop stores. There are many vibrant communities (Flushing, Astoria, etc)where local businesses survive.

      • Jay says:

        You were explained wrong.

      • B.B. says:

        A bank granting commercial loan based on what someone is charging in rents versus actual revenue is a laugh.

        Each bank will have their own criteria, but most weight actual revenue (rents paid) instead of merely projections. Then there are other factors such as what the property is worth which comes into play should lender have to foreclose.

        Construction loans are slightly different. There lenders will usually use some sort of formula that looks at projected revenue per square foot for sales/rentals as part of decision making.

        This is one reason why LL’s for all those new luxury or whatever rental buildings aren’t offering lower rents as concessions. They have financing/investors to pay and cannot afford to discount very far.

        Instead such LLs will give concessions that don’t involve real cash. Things like one or two months free rent, discounted or free amenities, etc… Those sort of things can be paid for out of accounting or other “tricks”.

        Giving someone one month free has a net effect of lowering total rent paid over term of lease, but leaves actual asking rent intact.

      • H.R. Blockhead says:

        Why don’t they look at actual financial statements and tax returns instead?

        • B.B. says:

          If you are referring to a business seeking a commercial loan, many lenders do ask for financials including prepared (certified) tax statements. This is why new and even ongoing small businesses often find it difficult to get credit.

          Many small businesses are started from savings, investments (family, friends, an angel), credit cards, and perhaps some sort of bank or government (SBA loans), financing. But until well established many lenders aren’t going to be giving huge sums to just anybody asking. It can even be difficult for a new small business to open a (commercial) bank account.

          There are also other sources lenders can tap for information on a business. Dunn and Bradstreet along with other sources offers credit reporting and other research information on a business.

          As for the city, it already knows the financials of any business due to quarterly information filed with DOF. Then there are annual tax returns.

          At a minimal level, and things may vary by where the retail space is located (something on first or second floor of a small apartment building might have different requirements than space owned or managed by large real estate), you are going to need the following to rent a commercial space.

          1. A rock solid business plan

          2. Equally solid financials

          LL’s want to see how you intend to make money, and that you have enough to not just set up the business, but keep it going for first several months if sales revenue isn’t great.

    11. Leslie Rupert says:

      For vacant spaces they need to have landlords state when the space became vacant

    12. David Morris says:

      I suppose this is a start, and perhaps a necessary and effective one. But commercial rent control, championed (sort of) long ago by Ruth Messenger, is really the only answer. There must be some reason that it’s worth it to owners to keep the stores vacant. No one seems to know why or how. Is it because the rent the owners claim they are losing (because there’s no commercial rent control) make the tax writeoffs higher than the actual rent they could realistically get? If Starbucks and Walgreens can’t afford the rents on Broadway between 97th and 99th, who can?

      • Bronx Boy says:

        There isn’t a write off for potential rent that you don’t collect. Your revenue just falls, but since taxes are less than 100%, your income would be higher if you rented out the space.

        That’s part of the mystery.

    13. SMS says:

      While some of the arguments made about shopping online are true, one might look at the empty storefront on the corner of 91st and Riverside.

      This space once housed a framing shop…something that is rather difficult to do online. The landlord raised the rent to a point where it became necessary for the shop to (thankfully) relocate.

      This storefront has now been empty for approximately 3 years where it could have either a) stayed occupied or b) housed another form of service oriented business that CAN’T be found on Amazon.

      While I don’t know what rent the landlord is asking for this space, I have to ask myself whether it’s worth it to have an empty/non-revenue producing spot for years rather than a rent paying tenant who might enhance the neighborhood.

      • Stuart says:

        There is a storefront on Riverside?

      • Possible reasons:

        Not zoned for commercial.

        Space is too small.

        Costs too much to upgrade and bring to code.

        Not a highly trafficked area.

        Rent/Maintenance too high.

        Owner of building wants to sell the space and not rent.

        Other coop owners object to having a business on the first floor.

    14. Craig S says:

      Both national retail chains and small mom and pops are having a rough time competing in the current economy.
      Contrary to most of the what the press reports, landlords are reducing rents and offering concessions. The economy and retail environment just sucks. Minimum wage at $15/hour has killed many retailers. Oppressive real estate taxes and rent occupancy taxes further bleed out retailers. A database does nothing to fix the issue.

    15. West88 says:

      Legalize marijuana and watch the mom and pop dispensaries (like the wine and liquor stores) arrive in abundance filling up the empty storefronts. You can’t buy it online and the demand is high (pun intended). It’s one of the last products that demand physical stores.

    16. susan Gair says:

      Unless there is some form of rent regulation on commercial space, small business suffer.

    17. Sherman says:

      Interesting editorial in today’s NYPost on this topic.

      https://nypost.com/2019/07/30/empty-storefronts-city-govt-is-more-cause-than-cure/

    18. Stella says:

      I understand that landlords leave stores empty b/c they get as much or more from their insurance than what they can get in today’s depressed rental market. One business owner searched for over 2 yrs. he was my info source.

    19. J says:

      Everyone, of course, has a valid opinion. But, instead of bitching and moaning on the choices our officials make to try to make improvements, why not suggest possibilities that might work better. Just complaining that our reps are doing a horrible job and making poor choices is not constructive and will not help.

    20. Gladys says:

      Want to help small mom and pop stores.
      Eliminate the taxes on Commerical leases below 96street.
      Put a freeze on the increases of water and sewer. last year the charge was $9.00 HCF this year it is $10.33 HCF.
      The lost of parking on Amsterdam AVe due to bike lanes have caused small business to lose business and the city to lose income because it is impossible for my customers to find parking.
      It is impossible to receive and deliver merchandise on the upper west side due to the bicycle lanes. Merchants are harassed by Meeter maids, eager to give tickets due to double parking.
      Want to help small business. Start by listening to their concerns and make reforms on polices that hurt small business owners.
      Small business owners unite and vote out those in office who don’t care about our bottom line.