Can small fish thrive if big fish make the rules?

BY KAREN LOEW  |  In 2015, one of the most glorified jobs you can have is that of an “entrepreneur.” Earlier in the high-tech era, the word connoted a position on the cutting edge of society, where a daring individual would take risks to create or develop a brand-new good or service. Today it is often used interchangeably with “small business owner” or “freelancer”: an individual who takes the risks of running his or her own concern, even if that business itself fits squarely inside the envelope.

And so an entrepreneur reaps the outsider status of the rebel or explorer, while retaining the consummate insider’s position of being celebrated by every politician from town councilmember on up to president. An entrepreneur is a good guy, pursuing the bedrock American value of making a buck. Whether he sells ice cream cones, or she sells DIY drones, an entrepreneur is portrayed as someone who deserves support as an essential pillar of society.

It’s ironic, then, that in New York City so many entrepreneurs feel their livelihoods threatened — feel that the levers of power are not working in their favor. An entrepreneur can take the risks, “make it” by meeting strong demand and reaping financial success, yet still find his or her business on the rocks. Why?

The answer is rent.

It can be way too high. Or it could be within reach. But after one lease ends, the small business owner doesn’t get a chance to negotiate, because the landlord unilaterally chooses a new renter. That’s the case with Excel Custom Framing and East Village Cheese, located next door to each other on Third Ave. between E. Ninth and 10th Sts. These are two long-lived, popular, profitable businesses whose leases end this year. The landlord, Urban Associates LLC, chose to give the spaces to the neighboring Duane Reade for an expansion. What will become of these entrepreneurs, and their employees, and their dedicated customers? No one knows.

Talk to an entrepreneur in Greenwich Village — or Bushwick — or Long Island City — and he or she certainly may have other complaints about the business environment. But the top complaint is rental rates, plus the ability to negotiate a lease extension — if any, and then for a meaningful length of time, like 10 years rather than two.

“We are little fish. The law is in favor of big fish,” one successful but threatened business owner told me repeatedly. He didn’t want to be named, because he has to secure a new lease and doesn’t want to draw the ire of any big fish. “The little fish can do nothing,” he said.

This is why the people who are most distressed about independent businesses closing are coming together to rally behind the Small Business Jobs Survival Act (S.B.J.S.A.), a bill introduced into the City Council last year that would require landlords to negotiate with responsible tenants for lease renewals. It would not affect new tenants.

The Greenwich Village Society for Historic Preservation announced its support for the bill after our board and staff and members couldn’t take the closure of one more Avignone Chemists or Kim’s Video. At G.V.S.H.P., we also try to bolster excellent small businesses through our annual Village Awards, as well as our new Business of the Month program, which just recognized East Village Cheese.

The S.B.J.S.A. nearly passed the City Council, in slightly different forms, several times since first being introduced by then-City Councilmember Ruth Messinger in 1986. It is not commercial rent control (which existed in New York City from 1945 to 1963, by the way), but it gives commercial tenants a bit of leverage, in place of none.

Over the three decades since the bill’s first introduction, entrepreneurial conditions have worsened in New York City in important respects, with far more chain stores, more real estate speculators, higher rents and rent increases in real dollars, and even more power held by the real estate lobby, which has generously financed the campaigns of many city and state politicians.

The bill’s core backer is the Small Business Congress NYC (savenycjobs.org), which is made up of dozens of neighborhood business groups, from the East Village Community Coalition and the Bronx Council on the Arts to the Queens Hispanic Chamber of Commerce.

Speculators and gougers are not sustaining local residents by turning street-level retail into a boring monoculture, on the one hand, or keeping storefronts empty for months and years, on the other. Any healthy ecosystem — whether a forest or a city block — grows organically and with complexity, not homogenously or with an imposed order.

New Yorkers are not best served by the bloodless order being imposed on our streetscapes by valuing the highest dollar above all else.

New Yorkers have other values, too. One is the veneration of the small-business owner.

Loew is director of East Village and special projects, Greenwich Village Society for Historic Preservation

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