By Patrick Hedlund
Small business ‘extortion’
Small business owners across the city are being forced by landlords to pay money under the table or face losing their stores, a group of mom-and-pop store advocates charged at a rally on the steps of City Hall last week.
Led by Queens Councilmember Tony Avella, a candidate for mayor, the group condemned the practice of landlords demanding additional payments on top of rent to secure leases for tenants.
“These businesses who contribute to the economy in the city — who are the backbone of every neighborhood in this city — must be protected,” said Avella, who has requested a federal investigation into the practice. “The real estate industry in this city and the unscrupulous landlords must be regulated.”
According to a recent survey of 1,200 Hispanic small business owners, conducted by the U.S.A. Latin Chamber of Commerce and the Bodega Association of the United States, nearly a third responded that their landlords demanded additional money as a condition to continue or begin lease negotiations.
“We believe this number is higher, because many small business owners did not understand the confidentiality of the survey and were afraid to get in trouble,” said Miguel Peribanez, president of the chamber of commerce.
“We’re not going to recommend any immigrant make business here in New York because it’s so risky right now,” added Ramon Murphy, president of the Bodega Association.
The survey also found that 87 percent of Latino-owned small businesses felt they had no rights during the lease renewal process and 92 percent believed that the process favored landlords so much that they abused their power.
In response, Avella wrote a letter to the U.S. Attorney’s Office in both the Eastern and Southern New York Districts asking for an investigation into this “illegal activity.”
“This is clearly a case of extortion, since the small business owners have no alternative but to pay this money or lose their entire business, which many have worked years to build,” Avella stated in the letter.
Councilmember Robert Jackson of Upper Manhattan introduced a bill last year that would force tenants and landlords into binding arbitration to negotiate a fair lease agreement if they can’t come to terms. Beyond that, the measure proposes setting rent increases that can’t exceed a certain percentage to ensure small business stability.
While the problem has affected immigrant-heavy communities more acutely, neighborhoods like Greenwich Village have also suffered, explained former Community Board 2 Chairperson Maria Passannante Derr, who participated in the rally.
“It’s pandemic at this point citywide,” she said. “There are up to 12 stores on Hudson St. alone that are empty, and the Village is starting to look like a ghost town.”
Derr, who is also running for City Council in the Third District, supports Jackson’s bill and criticized some elected officials’ recent efforts on behalf of small business as not going far enough.
“I don’t think it’s an extreme remedy,” she said of Jackson’s proposed legislation, which is viewed as a form of commercial rent control. “I think it’s a good step forward.”
Bankrupt in Soho
The fate of a Soho residential project is in question after developers of the planned seven-story building declared bankruptcy last week.
The proposed 58-unit project, slated for a parking lot at the corner of Canal and Grand Sts. in the Soho Cast-Iron Historic District, sought to emulate the character of the neighborhood through its aluminum-panel facade.
Brooklyn-based developer Judo Associates received approval for the project, dubbed 1 Greene St., nearly two years ago. The developer filed for bankruptcy protection last week, Crain’s reported.
Designed by architect Gene Kaufman, the building would contain a total of 80,000 square feet and has been valued at $25 million. The site currently houses a parking lot.
Hudson Square chic
Celebrated fashion designer Brian Reyes has moved his eponymous label to Hudson Square as part of a five-year lease agreement.
The deal gives Reyes 4,553 square feet at 304 Hudson St., between Spring and Vandam Sts., nearly quadrupling the size of his former Flatiron offices.
The designer, who spent the last few years on lower Fifth Ave., had previously stated his desire to work out of space closer to his Tribeca home. Reyes now joins fashion tenants Y’s America (Yohji Yamamoto) and Atelier Fashion at the address.
“Hudson Square has established itself as a center for creative businesses from broadcasting and advertising to fashion,” said Jason Pizer, a senior vice president of leasing for building owner Trinity Real Estate, in a statement. “Mr. Reyes has an exceptional reputation and a growing brand, and we are delighted to welcome him to our neighborhood.”
mixeduse@communitymediallc.com
