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 (SBJSA), a bill that give 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 in October.
Ever since Speaker [Corey] Johnson pledged to give the SBJSA a hearing, opponents who want to keep the status quo favoring landlords have launched a campaign of misinformation about the SBJSA. A recent example of this misinformation is describing the SBJSA as “commercial rent control” as Crains and The Real Deal did.
The SBJSA 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 NYC actually had successfully from 1945-1963.
Already the SBJSA 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 promoting the erroneous “commercial rent control” narrative.
In 2009 the last time the SBJSA had a hearing, the Council’s Small Business Committee unanimously agreed the SBJSA was the best solution to stop the closings and save jobs. Right before the vote when the bill would have easily passed Committee and full Council, then Speaker Quinn blocked the vote citing the bill had “legal problems.”
Despite unlimited financial resources and countless attorneys, the Real Estate Board of NY (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 SBJSA was constitutional and if NYC had the authority to enact it. The panel of independent legal experts heard testimony on all arguments and reviewed all the legal case-law reviews and issued a final report stating the SBJSA was fully constitutional and NYC had home rule to enact it. Their findings reflect exactly what the City’s Corporation Counsel already testified in 1988, and subsequently the original version of the SBJSA was voted on in Committee on December 1, 1988.
The history of the bill has shown that every time the SBJSA gains Council support calling for a vote, REBNY promotes misinformation about the bill to ensure the SBJSA will not get a fair hearing or a vote. This is why it is absolutely imperative that prior to October’s hearing on the SBJSA, the Speaker’s Legal Department resolve any and all legal issues surrounding the SBJSA. This would ensure that the focus of this overdue hearing is only on finding the best solution to save our small businesses and 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 has never once challenged the legality of the SBJSA until 2009 when it was sure to pass with the full support of the Small business Committee and 32 Council Members sponsoring it. In order for our 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 Corey Johnson can easily obtain this information from his Legal Department. TakeBackNYC calls upon Speaker Johnson, prior to the October hearing, to get in writing from Corporation Counsel whether or not the SBJSA is constitutional and if NYC has home rule to enact it.