As their rents rise, small businesses need a boost

As the recession continues to take a toll on small businesses, the New York City Council is considering a measure to help them. Along with 18 co-sponsors, Council member Robert Jackson, who represents Morningside Heights, recently proposed the Small Business Survival Act to grant commercial tenants additional rights during the lease renewal process. While reactions to the proposal have been largely positive, some small business owners were skeptical of the legislation’s motives and effectiveness. In the past, legislative emphasis has focused on rent control, whereas the newly proposed act aims to facilitate the process of lease renewal between landlords and commercial tenants. A spokesperson for Jackson said the bill is still being revised and has not yet been introduced to the council’s Small Business Committee, but Jackson expects it to move forward by September. “Small businesses will bring a lot of money to the city,” said Wassim Malaeb, co-owner of Samad’s Gourmet, located on Broadway between 111th and 112th Streets. “So now they’re trying to help us, because they want to encourage people to come back and work instead of paying them unemployment fees. I support the proposal, but the money they grant to small businesses, they’ll end up getting double, unless they have tax relief for us and let us go again.” For decades, the lease renewal process has been a primary reason behind small business failures. Jackson’s bill responds to how “the absence of legal protection for the interests of commercial tenants in the lease renewal process has unnecessarily accelerated the closing of small businesses and resulted in lost jobs, tax revenues and community instability,” according to the text of the legislation. More specifically, the Small Business Survival Act aims to give local entrepreneurs greater predictability of future costs, through a two-step procedure of mediation and arbitration for negotiating commercial lease renewals and rentals. An arbitrator would be present as a third party in the lease renewal process and resolve any disputes between the landlord and the tenant over the lease or rent. The arbitrator would be chosen by the two parties, the American Arbitration Association, or any other recognized arbitration organization, and his or her decision on the rent price would be binding for both parties. Local business owners had mixed reactions, and some were confused about the city’s positions on particular issues. For instance, liquor shop owners were told that a separate proposal had been made to allow liquor to be sold in larger supermarkets, or to instigate storing fees on liquor shops for holding a certain volume of alcohol. The Small Business Survival Act appeared to contradict these previous proposals for small liquor shops. “It’s funny how that they are hitting small business and yet they are also saying that they are protecting small businesses,” said Jorge Alvarado, an employee at Vino Fino, a liquor store on Amsterdam Avenue between 121st and 122nd streets. “I guess the money we would be saving on the lease, we would be giving up to the government anyways.” But many businesses expressed relief that the City Council was working to protect employers as well as employees. “Small businesses bring the people together,” Maleb said. “It brings everyone back to the small neighborhoods—it creates a safe haven for everyone.”