Local Lawmaker Seeks to Help Small Businesses in Tough Economy
“For Rent” signs are extremely popular in New York City right now. And in most cases, those signs can be found in the windows of what used to be thriving small businesses.
Last month, U.S. Rep. Anthony Weiner issued a report finding that more than 12 percent of the small businesses surveyed had closed. Brooklyn had the highest rate of vacant storefronts—more than 14 percent. Even Manhattan's upscale Madison Avenue is feeling the pinch. Its retail store vacancy rate rose from 8 percent at the end of 2007 to above 12 percent in 2008. The report continues a long-standing New York City debate: What, if anything, should government do to help and preserve the city's small businesses?
City Councilmember Robert Jackson has proposed the Small Business Survival Act. With 18 sponsors, Intro. 847 would give commercial tenants rights they do not currently possess when renewing a lease. According to the proposed legislation, if an owner and tenant cannot successfully negotiate renewal terms within 90 days, a mediator would intervene. And if the mediator is unsuccessful, an arbitrator would be brought in to establish the new rent, based on various criteria such as the market value, longevity and location of the business, and the cost of maintaining and operating the property. Currently, there are no controls in place to regulate commercial property rents. Once the lease expires, an owner can charge whatever it wants, or refuse renewal without cause.
A recent Latin Chamber of Commerce survey reported that 59 percent of respondents believed that local government leaders don't fully understand the particular needs of small businesses. In response to the criticism, Mayor Michael Bloomberg noted that his administration has distributed over $3 million in grants to small businesses and provided job training for almost 2,000 workers. A member of the Mayor’s Small Business Services department also touted the Business Solutions Center, which offers courses on business training, provides training funds for entry level employees and pro-bono legal services to review contracts and leases.
Source: Gotham Gazette