Will the S.B.J.S.A. get a fair hearing?

A closed storefront on Bleecker St., a far too familiar site. The shocking number of empty storefronts that currently blight streets like Bleecker, Christopher and others make it more crucial than ever that the S.B.J.S.A. finally be passed, advocates say. Photo by Tequila Minsky

BY KIRSTEN THEODOS | After nine long years of a growing crisis that has resulted in a vacant storefront epidemic that is plaguing the city, a serious debate is about to take place in City Council on the best solution to stop the closing of long-established small businesses, mostly caused by exorbitant rent increases.

Last week, it was announced that the Small Business Jobs Survival Act, a bill that gives commercial tenants the right to a 10-year lease renewal and equal rights to negotiate a fair lease, was finally going to get a hearing at City Hall next month.

Ever since Council Speaker Corey Johnson pledged to give the S.B.J.S.A. a hearing, opponents who want to keep the status quo favoring landlords and prevent giving any rights to business owners when their leases expire, have launched a campaign of misinformation about the S.B.J.S.A. A recent example of this misinformation is describing the S.B.J.S.A. as “commercial rent control” as Crains and The Real Deal recently did.

The S.B.J.S.A. is not commercial rent control at all, rather it is a bill that gives both parties rights in the lease-renewal process. It levels the playing field for business owners to negotiate in good faith with their landlords. It does this by mandating mediation between landlord and tenant, and if an agreement can’t be mutually reached, then a binding arbitration process will be used. The arbitrator is chosen and paid for equally by the landlord and tenant. There are no caps or government formulas setting the rent. In fact, government plays no role in the negotiation process; therefore, it is not commercial rent control, something New York City actually had successfully from 1945 to 1963.

Already the S.B.J.S.A. is off to an unfair start if it is being labeled something it clearly is not. The real estate industry has successfully blocked a vote on this version of the legislation all eight times the bill has been introduced in the Council, since the first time in 1986. It’s no wonder then that the two largest real estate publications are the ones putting out the erroneous “commercial rent control” narrative, whereas local newspapers like The Villager, which represent neighborhoods that have been devastated by store closings, report the truth.

In 2009, the last time the S.B.J.S.A. had a hearing, the Council’s Small Business Committee unanimously agreed the bill was the best solution to stop the closings and save jobs. Right before the vote, when the bill would have easily passed committee and the full Council, then-Speaker Christine Quinn blocked the vote, citing the bill’s alleged “legal problems.” Despite unlimited financial resources and countless attorneys, the Real Estate Board of New York a.k.a. REBNY didn’t produce a single court ruling or case-law review to substantiate this claim, nor did the speaker’s Legal Department.

This prompted Bronx Borough President Ruben Diaz to host a legal review panel to determine whether or not the S.B.J.S.A. was constitutional and if New York City had the authority to enact it. The panel of independent legal experts heard testimony on all arguments and reviewed all the case-law reviews and issued a final report, stating the S.B.J.S.A. was fully constitutional and New York City had home-rule authority to enact it.

The Bronx panel’s findings reflect what the city’s Corporation Counsel already testified to in 1988, and subsequently the original version of the S.B.J.S.A. was voted on in committee on Dec. 1, 1988.

The history of the bill has shown that every time the S.B.J.S.A. gains Council support calling for a vote, REBNY promotes misinformation about the bill to ensure it will not get a fair hearing or a vote. This is why it is absolutely imperative that prior to October’s hearing on the S.B.J.S.A., the speaker’s Legal Department resolve any and all legal issues surrounding the S.B.J.S.A. This is done for all other legislation and would ensure that the focus of this overdue hearing is only on finding the best solution to save our small businesses and will not be overshadowed by purported legal issues.

What would be the purpose of having a hearing on a bill that allegedly couldn’t be enacted by the city? For 23 years, REBNY never once challenged the legality of the S.B.J.S.A. — until 2009, when it was sure to pass with the full support of the Small Business Committee and 32 councilmembers sponsoring it.

For the sake of our desperate small business owners, who are struggling to survive to get fair treatment at City Hall, this fake legality nonsense needs to be refuted prior to the hearing.

Speaker Johnson can easily obtain this information from his Legal Department. In 2017 he went on record stating, “I support the Small Business Jobs Survival Act and as speaker I would ensure that it gets a hearing and the rigorous debate that it deserves.” In 2016, he was also on record disingenuously doubting the bill’s legality.

TakeBackNYC calls upon Speaker Johnson, prior to the October hearing, to get it in writing from the Corporation Counsel whether or not the S.B.J.S.A. is constitutional and if New York City has home rule to enact it.

If Speaker Johnson won’t obtain this information from his Legal Department prior to the hearing, then small business owners, their employees and the public need to ask, why not?

Theodos is co-founder, TakeBackNYC, a group advocating for mom-and-pop shops

Leave a Reply

Your email address will not be published. Required fields are marked *