Manhattan Borough President Gale Brewer is seeking to introduce legislation that would prevent small businesses from being summarily evicted after a rent hike from landlords.
According to Brewer’s office, landlords would be required to give small business tenants in storefront spaces notice of their intentions 180 days in advance of the end of a lease, followed by a negotiation period in which either party can request nonbinding mediation to assist with negotiations. The legislation would also provide the option of a one-year lease extension with no more than a 15 percent rent increase to give businesses the opportunity to transition to new space smoothly when necessary.
“The law would state you have to sit down with a mediator, and if there was no possibility of coming to terms, our proposal would be that you as a small business would have a year and you wouldn’t have to leave right away,” Brewer said in an interview.
She’s partnering on the legislation with City Councilmember Robert Cornegy, chair of the council’s committee on small business.
Brewer said she’s not anticipating pushback from the real estate industry, which has traditionally resisted any initiative aimed at beefing up negotiating powers for commercial tenants.
“When we called around to the chambers of commerce, business improvement districts and the Real Estate Board of New York, they wanted to talk, they’re not opposed to it,” said Brewer. “I think they want to see small businesses survive, they live in New York, too. We didn’t get a lot of pushback.”
So what’s in it for landlords?
“The incentive to negotiate down from the rent increase is that you’re going to have to work with this person for another year,” said Brewer, of the legislation’s rule that if an agreement could not be reached, a business could stay in a given location for another 12 months and pay no more than 15 percent of the rent they were paying prior to their lease’s expiration.
Brewer also said that the 15 percent rule could be negotiated. “We can play with that number, but that’s what we’re thinking,” she said.
Brewer’s office will be convening a series of roundtable discussions around Manhattan to discuss her small business proposals with neighborhood business owners and residents. The first is slated for May 6, during National Small Business Week.
Other pillars of her small business survival initiative include modernizing policies governing street vending, helping small businesses buy their space as a commercial condominium, and the creation of “low-intensity commercial districts.”
“In certain neighborhoods experiencing rapid storefront rent increases, creation of new low-intensity commercial districts on quieter streets can act as a safety valve, reducing competition for rental space on high-traffic commercial streets,” said Brewer’s office in a press release.
Details on the initiative are set to be released in an upcoming report on saving small business by the borough president’s office.
“Whether it’s taking some of the pressure out of lease renewals or facilitating the training or microcredit assistance a vendor needs to take the next big step, our city government needs to get creative to help small businesses survive and thrive,” said Brewer. “Small storefront businesses and vendors create jobs and add value, vibrancy, and diversity to our neighborhoods – New York would not be New York without them.”