Clarify S.B.J.S.A. legality and stay focused

Sung Soo Kim.

The following is excerpted from a recent letter by Sung Soo Kim, founder of the Small Business Congress of New York City, to Mark Gjonaj, chairperson of the City Council’s Small Business Committee, in advance of the committee’s Oct. 22 hearing on the Small Business Jobs Survival Act.

By Sung Soo Kim | 
I am very grateful for your willingness to want to meet with me to plan for an honest, fair and productive hearing on the Small Business Jobs Survival Act. Regrettably, my failing health will not permit me to attend. My letter to you expresses my judgment on what will be two essential actions needed for a fair and productive hearing.

The dire situation faced by our small business owners, especially Korean and immigrant owners, presents for me a moral obligation to do all in my power to see they receive justice at this long-overdue hearing. My reasoning will be based solely upon my 34 years’ experience advocating for small businesses and fighting daily to solve the problems of immigrant small business owners.

As one of the drafters of the first version of the S.B.J.S.A., I played a major role in selecting seven prime sponsors, and the drafting of several significant updated changes.  I have helped organize 11 hearings on this legislation over 30 years. While every hearing was important to the future of small businesses, none will be as important as your hearing, Mr. Gjonaj.

This is because government’s failure for the past decade to take any true actions to address the unfair commercial lease-renewal process has made a crisis grow worse. The outcome of our city’s one-sided lease-renewal process, where business owners have no rights in a hyper-speculative market, has produced record closings of long-established businesses — on average, 500 court evictions of businesses each month — out-of-control rent gouging, growing numbers of illegal extortions of cash demanded from mostly immigrant owners to remain in business, harsh short-term leases of sometimes month-to-month and one and two years, oppressive lease terms and empty storefronts on blocks where thriving businesses once stood.

First, resolve all the outstanding alleged legal concerns regarding the S.B.J.S.A. prior to the hearing. The alleged legal claim began in 2009 after the last hearing on the S.B.J.S.A. had the immediate effect of stopping a vote on the bill, which was certain to easily pass at that time. The alleged legal claim “that the S.B.J.S.A. had legal issues and would not stand up to a court challenge” was the primary reason given by many lawmakers for eight years of denying justice and a hearing on the bill, and yet remains unresolved today. Even though the Council’s legal department will not share with the S.B.J.S.A.’s prime sponsors and the media, or give public statements on any legal details substantiating their legal concerns, we know from the real estate lobby’s past and present presidents, that after conferring with the city and the Council’s legal departments, they still maintain the bill has legal concerns.

Yet, despite these legal concerns, they have never submitted amendments to the bill’s prime sponsor to change it to satisfy these alleged issues — legal concerns that will likely only be brought up — once again — after the hearing.

In an interview in March 2015 with the editor of The Villager, Lincoln Anderson, the former president of REBNY, Steven Spinola, said of the bill, “ It’s not even clear if it can be legally implemented. We are absolutely convinced that the City Council, the mayor do not have the power to impose control on the leasing of properties. At the very least, it would have to go to the state, and we’re not sure that the state would have the power to impose this.”

REBNY’s current president, John Banks, has expressed the same viewpoint. To add more confusion about the bill’s legality, a recent report by the New York City Bar Association raised questions whether the City Council even has the authority to pass any legislation regulating commercial landlords.

Second, it’s critical that the focus of the hearing be kept on the S.B.J.S.A. I am aware the new REBNY-backed talking point for lawmakers is, “The S.B.J.S.A. is not a silver bullet and other measures need to be passed into law.”

But the “other measures” have nothing to do with the commercial lease-renewal process and therefore would be of no benefit in finding a real solution to the crisis caused by the commercial lease-renewal process. Most “other measures” were created by REBNY 30 years ago and all were rejected then as simply keeping the status quo.

After nine years, this hearing must, in fairness and justice, give the full day to the proponents of the S.B.J.S.A. and those wanting a real solution to stop the small business closings. Not only do all the other measures, proposals and “tools in the toolbox” have nothing to do with the crisis, they have nothing to do with the purpose of the S.B.J.S.A. — addressing the lease-renewal process — and thus do not offer a solution.

An even bigger affront to mom-and-pop store owners would be unwelcome representatives from city agencies promoting their failed programs. Small merchants do not want to hear from agency wonks about how to “grow their business.” Again, the single most significant problem they face is their unfair lease-renewal process. That’s the issue.

I look forward to working with you, Mr. Gjonaj, to assure an open and just hearing — one where a real, honest solution to stop the store closings is the outcome.

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