I support a thriving and entrepreneurial economy in New York City, and I support the providing small businesses with an opportunity to compete and thrive across the five boroughs. The Small Business Jobs Survival Act (SBJSA) is a good idea whose time has come. With some improvements, it could be exactly what this city needs to ensure a lively commercial climate.
The time is certainly ripe for action in this city to protect and preserve the spirit of our neighborhoods and to give small businesses a chance to survive in the face of a two-sided problem: the continued expansion of chain stores in the five boroughs and the proliferation of vacant storefronts at the expense of the health of our communities.
However, for this bill to truly be about supporting the preservation of jobs – a worthy stated goal of the legislation- it needs to be about entrepreneurship. We should be especially protecting vulnerable local-job-creating small businesses that fit under the New York City Small Business Services definition of 125 employees or less in the business, not protecting large chain conglomerates or self-storage operators that do not necessarily promote local entrepreneurship and the well-being of our neighborhoods.
I would further caution that the bill provide language specifying that the described lease renewals can be at a mutually agreed upon rate that may include increasing rents over the course of the renewal period. This is not commercial rent control.
We cannot entirely leave landlords and developers out in the cold. In fact, we must recognize that some landlords could be described as small businesses themselves. The bill should include a provision that the likelihood of a landlord or developer defaulting on a loan with their financial institution—a loan taken in good faith and responsibility accounted for—should be factored into the arbitrator’s final decision. We should also include a carve-out if the landlord herself wishes to start a small business in good faith in the commercial property.
This legislation presents some novel commercial tenancy issues. There may be, for instance, some questions worthy of exploration about the arbitration clauses central to the legislation.
However, we must focus on the greater good of this legislation. Small businesses need an opportunity to stand on equal footing with their landlord, and have a real chance to negotiate a fair lease extension. We cannot abide the continuing scourge of massive rent increases without regard for the vibrancy of a neighborhood, nor can we accept the ongoing plague of empty storefronts in once thriving commercial corridors.
One of the key issues that has risen around the SBJSA is its legality. However, this point has been much debated and answered. In 2010, my office convened a legal summit surrounding this legislation, which was then known as the Small Business Survival Act, in partnership with the Bronx Overall Economic Development Corporation and other organizations. The report of that panel found that “The Small Business Survival Act is fully constitutional and legally sound to withstand likely court challenges.” Regardless, such a matter can be decided by the courts. We should not allow a hypothetical legal challenge to block critical legislation.
This body must do what it can to promote a vibrant commercial economy for New York City’s small businesses and entrepreneurs. The Small Business Jobs Survival Act is an excellent first step towards this goal. I look forward to working with my colleagues to amend the existing bill in order to both preserve the character of our neighborhoods and promote commercial vitality across the five boroughs.