Monday, July 29, 2019

Report: New legislation aims to track vacant storefronts, monitor health of small businesses


[For rent along 2nd Avenue]

In case you missed this news from last week... City Council passed legislation (totaling five bills) — the first of its kind in the country — that will require landlords to register storefronts with the city. This database will offer a snapshot of retail spaces in the five boroughs and their vacancy status.

As Bloomberg put it:

The effort, aimed at creating a more comprehensive data set to monitor the health of the city’s small businesses, seeks to replace the existing patchwork of available information, which doesn’t paint a complete picture of the state of the market.

The “Storefront Tracker” bill, introduced by Manhattan Borough President Gale Brewer, City Council member Helen Rosenthal and City Council Speaker Corey Johnson, requires the Department of Finance to gather data on storefronts that will be bundled into an online resource to better understand the woes of the small-business sector.

Some details via amNY's report:

At the start of each year, building owners with storefront and second-floor commercial spaces, as well as commercial spaces in residential buildings, will be required to register with the city Department of Finance as part of their annual income and expense filings. The size, location, occupancy status, monthly rent, lease status and owner contact information will be required for each space.

Owners who fail to register or who provide inaccurate data will face fines. They will also be required to update the database if the occupancy status or ownership of the building changes within the first six months of the year.

The public will be able to see a commercial building’s occupancy status via the online Storefront Tracker database. More detailed data, such as the median time vacant spaces have remained empty, will be made available online via the census tract or council district.

Small-business advocates were generally supportive of the Storefront Tracker, calling it a useful tool.

“But it is perplexing why a bill counting vacant storefronts was fast-tracked and passed in just four short months,” Kirsten Theodos, co-founder of TakeBackNYC, told The Villager, “while the Small Business Jobs Survival Act, a bill that would actually stop the closings by addressing the unfair lease-renewal process, had a hearing eight months ago and since then there has been zero movement toward a vote.”

Said Andrew Berman, executive director of Village Preservation: "[I]t is not by itself nearly sufficient to address the challenges facing small store owners in New York City right now."

The Association for Neighborhood & Housing Development had a more celebratory take on the legislation.

"These wins come at a time when neighborhoods across the five boroughs have seen steep upticks in vacant commercial space. Landlords may be prompted to warehouse their storefronts in anticipation of rising rents or with the intent of holding out for the highest bidding tenant."

According to a count done by the East Village Community Coalition last summer and fall, there are over 200 vacant storefronts in the East Village.

As we've seen in the East Village, storefronts can sit empty for up to five years. For instance, two spaces in the retail base of NYU's Alumni Hall on Third Avenue at Ninth Street were vacant from the summer of 2014 until H-Mart opened early last month.

H/T MJB!

Previously on EV Grieve:
Raising awareness of the vacant storefronts in the East Village

26 comments:

NOTORIOUS said...

Sounds like wheel spinning.

Anonymous said...

As a small business owner in the EV, I’m curious to watch this play out. Fingers crossed but not holding my breath.

noble neolani said...

Too little too late and does not seem to address keeping theses storefronts empty for years or address the problem of rent increases often at or above 100%.

Anonymous said...

Wheel spinning...well put. One thing that should be done is to eliminate the tax deduction commercial landlords have for vacant spaces.
Speaking of long-term vacancies, the former Kate's Joint at 4th St. and Ave. B has been vacant a long time. There are also long-term vacant stores on B between 3rd and 4th.

KT said...

Thank you Grieve for including the advocates take on this. For each of the 5 small biz bills that just passed you have to ask yourself, will this piece of legislation save a single biz from closing? The answer for all 5 is NO. These bills require reporting where the SBJSA addresses high rents and will stop our good businesses from shuttering. At the October hearing on the SBJSA, Speaker Johnson recognized high rents as the main problem and committed to finding a solution. He could have fast tracked the SBJSA but instead chose the "district from the SBJSA & pretend like you're doing something" route. Please remember this when you vote for Mayor in 2021.

Anonymous said...

Why the hell was this not introduced years ago? Why suddenly now? And, more importantly, will this really help or directly impact owners? I am a concerned and long term resident of the east village who has witnessed absolute carnage with beloved venues forced to vacate their leases due to unreasonably exorbitant rent over the past decade. I truly want small businesses to thrive and succeed. They deserve to be here. I am just not certain this is the path to go on unless city government steps up and actually does the job we elected them to do, which doesn't seem to be the current consensus given how corrupt and apathetic many community officials are. Much of their efforts and speeches are just hyperbole. We all need action not words or useless statements.

cmarrtyy said...

This is a Dog 'n pony Show from the pathetic pols we elect. They make a list... So what? You can give a businessperson free rent for a year and on the 13 month they'll close the business. Bad ideas. Lack of experience. Unrealistic expectations. It's the same story over and over. High rent doesn't help but you know that going in... as well as all the taxes and regulations the business has to live with.

A better solution would be the city runs a small business school that lays out the good, bad and ugly part of small business. Maybe that will help more than a list.

blue glass said...

they waited too long.
you don't need a study to see the effect of the no holds barred commercial real estate market rip off. almost all of the family businesses have closed because of increasingly higher rents. or when the worth of their property becomes more lucrative than their services can bring in.
it is a shame and could have been prevented if our past city council members had been able to work with the state when the problem first became critical SOME THIRTY YEARS AGO. ask ruth messinger about the small business task force that got nowhere.

just look at how close the residential market as come being totally eviscerated.

and since when did anhd (who did pretty much nothing to help the in trouble HDFC/TIL buildings) find a new cause to ruin?

Anonymous said...

What KT said, none of the bills do anything to help a business. ANHD is like a phony cheerleader on the payroll of city council funding so of course they cheer, sad. Need SBJSa or simple commercial rent control.

From the East Village said...

Good. Now we can track how many vacant stores front start popping up in the up coming congestion pricing zone.

Anonymous said...

A database really won't help that much compared to changing the laws that allow landlords to keep empty store-fronts as a tax break.

Anonymous said...

You don't need to do a "study", you just need to walk around with your eyes open. My entire reaction to this is "Well, DUH!"

afbp said...

there is NO benefit for a commercial landlord (aside from a 'possible' disproportionate reduction in real estate tax) to maintain an empty space---having said that---landlords have ALWAYS hoped that no rent for 3 years would be offset by a lot of rent for the next 2---they have not adjusted to the FACT that online shopping is the reality.....

Anonymous said...

Sound and fury, signifying nothing and of course our disappointment of a council member is all over it.

Anonymous said...

The city’s closed. Everybody go home.

Anonymous said...

There are too many retail stores in the EV. Retail is never going to be what it was 20 years ago. Its over. But the city- which gets 30 billion a year from property taxes- needs all this money so they spend like drunken sailors. How about less spending and lower taxes/fines/fees/regulations etc? That would help but will never happen. Corey Johnson is upset because the city cant raise taxes without state approval. SMH. In the long run it doesn't matter because the tax and spend Dems need real estate/wall st to finance their programs. Remember in the next election? So you vote for the other democrat? Yes that will show them. NYC can't have a budget larger than Florida without all these taxes from real estate.

K/d0 said...

@afbp i believe there is a benefit from a capital gains perspective. the lack of rent can be used to avoid taxes on capital-generating properties ... with as you said ... the knowledge that it is worth it to use the loss for tax offset purposes today and wait for a sweet corporate deal tomorrow.

what this really demonstrates more than anything is a need to tax wealth. the concentration of wealth at the top has little to do with rents and income and much more to do with sitting on an endless hoard of money that can be used to bludgeon the 99% with what little wealth remains to them.

if a landloard had to pay a fractional percentage of a tax on the total value of a building it would do much more to deter the rent seeking behavior versus just forcing property conglomerates to pay their accountants a little bit more to track unrented frontage.

Giovanni said...

Do we really need to use an app to figure out which storefronts are empty and for how long? What the city needs to do is to have developers create more spaces like Essex Market in every single neighborhood. Small businesses don't need to rent a store only to find out it’s in a cursed location like the Bowery, or on the corner of St. Marks Place and 2nd Avenue — they need a marketplace with modern infrastructure and a built-in customer base, with a fair lease and a decent landlord. They need fewer arcane regulations and fines which just add to the city’s coffers and provide little public benefit.

Unfortunately this city has proven again and again to be unfriendly to small businesses. We used to have many small shops and newsstands in subway stations, places to eat, buy flowers, baked goods, clothing, electronics, records, beverages, candy and magazines, and the MTA drove many of them out, only to be replaced by CVS vending machines. I doubt that CVS needs the extra few dollars these kiosks will generate as much as the people that they replaced do.

Remember when the boom in tourism was going to help local businesses? Who besides the big hotel chains, tour bus companies and Broadway producers is benefiting from the glut of tourism? Local businesses need a comprehensive retail plan, and this isn’t it.

yduran said...

Need to add the McDonald's at 102 1st Avenue as an empty store front. As of this morning it's gutted.

Anonymous said...

That is not what capital gains are or how income accounting works. A lack of income is not a loss.

A wealth tax could be redistributive but I don’t see how it would prevent rent-seeking behavior. It might incentivize them to take lower rents by increasing required cash outlays but that is different.

tom said...

The real reason why landlords intentionally keep these store fronts empty is because they get a HUGE tax break for an empty space. The tax break on an expensive store front helps them get into a lower tax bracket. They are working the system because of some fancy accountant working his magic.

BagelGuy said...

It's not just the rents. That right. I said it. It is not just the rents. Rent is one of about a dozen big issues that threaten small biz survival in NYC. And it wouldn't even make my top 3. There is a reason why you've seen a huge uptick in closures over the past 2 or 3 years in NYC. Rents have been out of control for well over a decade and , believe it or not, they have come down significantly this past year. So ask yourself what has changed the past few years to cause this huge uptick in closures. Without a doubt it is the nearly doubling of the minimum wage from 2013 to 2019 Great cause. All for the living wage idea. But that cost the small biz owner, who was already just scrapping by, tens of thousands of dollars per year. Take a place with 10 employees who work 40 hours per week. Raise those employees from $11 to $15 per hour. That's an extra $1600 per week the owner has to come up with. Multiply that by 52 weeks. Add in payroll taxes, proportionate increase in workers comp and unemployment insurenece fees, and paid sick leave for all ten employees and you're creeping up on an extra $100,000 per year. Even a humble 5 employee shop is looking at an extra 50 grand a year. But it doesn't stop there , because every supplier your business has also increased their price of goods to compensate for the increase in their labor costs. So now your operting costs have gone through the roof. What to do? Well , of course, you are forced to raise your prices. In turn, your customers look to Amazon and Target for a better deal. Or, if you sell something they can't get online, they give it to you on the regular about how you have the nerve to raise your prices, never stopping to connect the dots. This, in my opinion, is the greatest challenge facing small biz in 2019. I'm all for a living wage. TSB has been paying well over min wage since its inception. But people need to realize that that cost money and if we want to give small biz owners AND low income folks a better shot, it's a group effort. People need to put their money where their mouth is. Not just the responsibility of the small biz owner. We are all in it together. As for paid sick and paid family leave, I am all for these ideas. But I believe the same people who smiled and collected the votes when those laws passed , should be the people who foot the bill. The state should've handled it. Instead it got thrown onto the back of the small biz owner. So, believe me, rent is small potatoes compared to what has changed the past few years. Rent goes up 3pct a year. TSB payroll/payroll taxes has nearly tripled during its 7 years of existence. Again, before all the jokers come out and go after me; I am not saying I'm against the living wage increase. I'm all for it. All I am saying is simple economics. It costs money and its caused a hell of a lot of closures. Thanks God TSB can swing it. A lot of my friends in the EV in the biz could not. I believe that last $2 per hour jump we got Jan 1 was a knockout punch to a lot of small biz's and that's why 2019 has been so rough. Dec 2018 I got a letter from every suppler I had telling me my costs for milk, paper, fish, coffee, ..... was going up to compensate for their increased labor costs. Tens of thousands extra I have to come up with. Meanwhile, Jan 1 my rent went up 3pct per month. As for the government, they've done zero to help me with anything . Ever. I figured out after the hurricane that shut me down for a week that they couldn't care less about local businesses. We are on our own. That's just the way it is and always will be. Oh, and those laws are a joke. And a bad one at that.

Anonymous said...

yes, there is, actually: maintaining so-called property value that the out-sized loan requires. As soon as a lower lease is accepted, property value goes down.

Lower East Sider said...

Well said, and not all landlords are assholes. I have a place in the East Village and I just signed a new 10 year lease with a significant rent reduction. That rent reduction was almost totally due to decreasing the real estate tax calculation. Unfortunately many landlords are not that reasonable. But, I cant blame those landlords for continually raising commercial rents (they are somewhat limited with residential rents due to rent stabilization) to cover the cities continuous increases to their real estate taxes, violations, fees, limitless regulations and any kind of renovation, which than increases their tax assessments, etc. And this is all to feed the unlimited need by Pol's for more tax revenue to buy votes from the majority of people who haven't a clue what a business needs to do to stay in business.

BagelGuy said...
This comment has been removed by the author.
Anonymous said...

Very very correct. I am my only employee for a reason. While i e considered expanding, the truth is, for all you listed, it would be the reason i failed