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With Bronx Businesses Under Siege, A Bill to Stabilize Commercial Tenant Leases

FOREVER YOUNG IN Kingsbridge relocates after a recent rent spike, an early sign of gentrification. Photo by Janaki Chadha
FOREVER YOUNG IN Kingsbridge relocated after a recent rent spike.
File Photo by Janaki Chadha

In the decades since Tom opened his Kingsbridge business, things had always been profitable and quiet. That was until last year when his landlord denied him his regularly five-year lease extension. Tom asked his last name be kept confidential for fear of retribution from his landlord who’s dangled month-to-month lease over his head.

“My future’s uncertain there,” said Tom. He’s since refocused his attention on kick starting his restaurant business in nearby Westchester County, where small businesses are welcomed, he noted.

Along Kingsbridge Road, a commercial area home to small businesses, many stores have maintained a holding pattern as the corridor awaits the opening of the Kingsbridge National Ice Center, considered a flashpoint in the future of the largely working class neighborhood. But talk of gentrification has become a predominant issue for small business tenants in Kingsbridge, thanks to the development project that’s still in the early stages.

The real estate industry has indeed made a comeback, given the escalating rents across the city. For small business owners, the comeback has deepened into a crisis, according to Take Back NYC, an advocacy group that views the commercial lease renewal process more as a shakedown than an evenhanded exchange.

The group has since been aggressively lobbying the New York City Council to introduce the Small Business Survival Jobs Act (SBJSA), which would give automatic 10-year leases to commercial tenants, a benefit to small businesses that rely on time to cultivate their venture. Long term leases are more attractive to banks, who interpret them as an indicator of stability and loan-worthiness. 

SBJSA Bill
The small business sector has long been a driver of job growth, with 66.7 percent of the city’s small businesses employing fewer than five workers, up from 65.2 percent in 2008, according to the Center for an Urban Future, a nonprofit think tank.

But as it stands, landlords have maintained a grip on their commercial leases, offering them up to the highest bidder, according to Kirsten Theodos, one of the lead organizers for Take Back NY.

“The only factor that’s taken into consideration in a commercial lease renewal process is how much is the landlord going to make?” said Theodos. “It never factors in, ‘Well, why can’t the commercial tenant make a living?’”

Other stipulations in the bill include arbitration rights for commercial tenants who can deem their lease unfair and reduced down payments for first-year commercial tenants. The bill would also end the unconfirmed, underground practice of landlords seeking an under-the-table bribe, or “key money” to keep a commercial tenant active.

The bill is intended to reverse a struggle that’s creeping into the Bronx: a priced-out borough. Rising rents by an unrelenting real estate industry have caused a drop in the number of small businesses opening and an escalating rise in big chain stores. In 2014, New York City saw a 2.5 percent increase in the number of national retailers opening in the city when compared to the .5 percent the city saw between 2012 and 2013, according to a report by the Center for an Urban Future.

In the Bronx, small businesses did not fare well in 2014 thanks to a 30 percent jump in the number of businesses facing court evictions. Rent, it seems, has been a burden that’s forced many to close or simply walk away from their business without recouping their initial investment.

“How this system’s set up today,” said Theodos. “It’s all about the landlord.”

Reintroducing the Bill
The bill was re-introduced in 2014 by Bronx Councilwoman Annabel Palma, who was unavailable to speak to the Norwood News as of press time. She’s one of a handful of legislators in the Bronx Council Delegation supporting the bill, with Council Members Andy King and Maria del Carmen Arroyo also endorsing.

Twenty-seven Council Members have now backed the bill, the magic number for a bill to pass the Council. Before a floor vote, the Committee on Small Business, which oversees business matters, would have to hold a hearing. No date has been set yet.

The bill has seen several incarnations since the mid-1980s, though it’s never gained enough traction to achieve support from mayoral administrations. Mayor Bill de Blasio, while a City Councilman and later the Public Advocate, had pushed for the bill. He has maintained his support in small businesses by lowering fines levied on small business owners, though he’s said little on his stance on the bill.

Theodos has long blamed the bill’s holdup on the financial reach of the real estate lobby, which has pumped millions of dollars into City Council campaigns. During the 2013 election cycle, the political action committee known as Jobs for New York pumped millions of dollars into seventeen Council races, according to campaign filings.

“The real estate industry does everything it can to push it down; even though it’s been introduced eight different times, it’s never made it to the floor for a vote,” said Theodos.

Other council members in the Bronx and beyond have largely kept quiet on the bill or have simply gone on the record saying they were examining it after inquiries from the Norwood News. Some have questioned whether the bill infringes on the legal rights of the landlord, a claim that surfaces whenever the bill grabs attention.

Those standing against the bill include the Real Estate Board of New York, a powerful lobbying group that’s fought the bill each time it surfaces. Its president, John Banks, has labeled the bill “unconstitutional.”

Nisha Mistry, director of the Urban Law Center at Fordham University, said the scope of the bill can be threatened in court since “state law governs this type of area.”

“It’s really not within the city’s authority to legislate, under the State Constitution, commercial activity in this kind of way,” said Mistry, pointing to the state’s authority over rent laws.

Mistry argued that rezoning of commercial corridors can serve as a roundabout way to keep the small business sector intact by only mandating mom and pops be established in certain areas. 

But the question of legality had been addressed in 2010 when Borough President Ruben Diaz Jr. hosted a forum on the legislation. Invitations went to the Real Estate Board of New York and then-Council Speaker Christine Quinn, considered major opponents of the legislation, though they never appeared.

“Even at the 2009 public hearing of the bill, no one brought up challenging the legality,” said Theodos. She cited a report in 2009 that justifies the City Council authorization to pass the SBJSA bill with no legislative input from the state.

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11 thoughts on “With Bronx Businesses Under Siege, A Bill to Stabilize Commercial Tenant Leases

  1. Me

    I have to laugh at the worries over gentrification. My husband used to live on Webb Ave. off of Kingsbridge. In the time I knew him when he lived there, there were numerous shootings and 3 people shot and killed on his block alone. The newbies to the hood, many of them Dominican from the Heights and Inwood, have ruined that area.

    What I also find bothersome is how they’re also worried about whitey moving in. These idiots don’t seem to realize that Kingsbridge was white – specifically Irish and Jewish for many years. Those Art Deco buildings were mostly inhabited by Jews. Hell many door frames still have Mezuzahs or the holes where the Mezuzahs were at one time.

    Those living in this area ruined it and it only got worse over the years. Screw it wealthy whites move back into the very area their grandparents may have lived in at one time. Let it be a lesson to those who feel it’s ok to piss and crap where you live.

    1. Sally Dunford

      Things have changed since you cut and ran. A lot. Those of us who stayed have fought hard to make things better — without you — and we did — if we hadn’t these kinds of rent increases wouldn’t be happening

      You got scared and ran and quite honestly I wish you luck — far from the Bronx — we don’t need your sad defeatist attitude

      And just because it seems to matter so very much to you — I’m a 4th generation Bronxite of Irish back-ground- I stayed and raised 4 sons here and I’m proud to be the Director of a Jewish agency, where we know that the best way to serve our community is to serve the entire community well

    2. Shannon Lee Gilstad

      It’s interesting how you make subtly veiled racist remarks under a phony account, which means even you know what you’re arguing is BS.

      Want to know about who really “destroyed” the neighborhoods? We can start will Robert Moses, the landlords who burnt their buildings for profit, redlining, blockbusting, and the systematic, racist policies that allowed all of this to be legal. But you fled, now you see that positive changes are happening, and are envious and angry that you cowardly left and will not profit form it.

      Maybe instead of fleeing and ranting about the sky falling because people different than you were moving in, you could have stayed and fought with us. Your loss.

      1. George Berdejo

        Sally and Shannon,

        I agree with your comments and Shannon, Me’s comments were not so SUBTLY, veiled, however this problem is multi-factorial and despite Me’s inappropriateness there is a percentage of the population, (color of skin, nationality, background etc is irrelevant) that has contributed to significant negative quality of life issues. I have a good friend who lives in the University/Kingsbridge area and who is quite active on her tenants committee, who complained recently on Facebook of the constant battle with uncaring, out of control individuals who inhabit her courtyard and lobby area, smoking, drinking and generating all kinds of unwanted noise at all times of the day and night who simply just don’t care about how unbearable they make it for everyone else.

  2. Brx 333

    To the previous commentor, this isn’t about gentrification or Kingsbridge in particular.its about giving rights to our Mom and Pops so they don’t get booted out by greedy landlords looking to cash in. The small business guys provide the most jobs for Bronx residents and when they get kicked out the jobs disappear with them. Not very surprising most of the Bronx pols side with real estate. They would sell out their own grandmother.

  3. savenycjobs

    This is about fairness to all parties , including neighborhood residents. Clearly, NYC is experiencing world wide real estate speculation and with this comes negative consequences to many NYers’ not just small business owners but their employees and customers. Rents are out of control , period, and this bill will give rights to the business owners to protect not only their life’s investment but the jobs of their employees. As far as the city not having Home Rule , that is a ridiculous statement. This was resolved 30 years ago and this bill has had 8 prime sponsors and 11 hearings over the years and not a single legal argument has ever been presented in public by the powerful real estate lobby stating either the city does not Home Rule or the bill has legal problems. They rely upon hired guns , in and out of government , to make these claims in private without any legal proof.

  4. Bronx resident and oh the corruption

    The Bronx Tourism council needs to fire Olga Luz Tirado who continues to NOT advocate for the small businesses in the Bronx, and it’s amazing how she is still employed in this position. She’s one of the most inarticulate representatives but patronage jobs in the Bronx rule first before qualifications. Here’s a person when you try to talk about high rents and long time business owners you are talking to a brick wall. She just doesn’t understand or comprehend this. The patronage mill in the Bronx Borough presidents also consist of Queens resident, Dirk McCall, and his qualifications are???? External Affairs, and what does he do on a daily basis? external affairs to help business or promote the Bronx. nope he doesn’t do this. Then you got the Bronx Economic Development Corporation which should of been closed years ago. Ask them how they are helping small businesses and you won’t get an answer. Good luck getting staff to address landlord greed at BOEDC. Another hack is Ray Salaberrios for BEDC president who takes full credit for all the malls, gets pushed out of being president and is now working for Empire State Development doing what?? Who knows, but he has a fancy title of Economic Revitalization of Vice President and what’s he revitalizing?

  5. NYCKay

    The problem is about balance. How many luxury condos do we need. Where are people going to shop, eat, get a haircut, do their laundry, etc. Big business does not necessarily provide what all in various communities need and want.There’s also a loss of culture, food, clothing, and other things that big business overlooks. So you’ll have twice the number of people crammed into a limited space with nothing but condos and fast food or high priced grocery stores. This is not something for the people and by the people……

  6. BronxBoy

    First of all, the neighborhood is ‘Kingsbridge Heights’!!!
    ‘Kingsbridge’ is a totally different place, way down that steep hill! OK, David?
    I spent my first 25 years there, up until 1980, and have gone back to walk around every 3 or 5 years. It looks the same. The stores in ‘my day’ were mom & pop stores, too. At least a couple of the mom’s & pop’s who had stores on my block lived in the building, too. It was ‘working class’, though two things were different. For one, it wasn’t poor. The other is that, aside from small-store owners there were postmen, doctors, construction workers, lawyers, and on and on, in our building. It’s a sign of the increasing economic divide the whole country is now seeing that we don’t really see that kind of mix in today’s communities.
    The social and economic forces that turned the population over (“changed the neighborhood”) were MANY and complicated. It was a turbulent era for everyone. Some people left because they would have anyway: a generation on their way to college and not coming back, and others would have moved to the new suburbs regardless. Some left due to hard-to-separate, self-fulfilling fears concerning encroaching crime, poverty, intertwined of course, with, fears involving racial stereotypes. Outside forces (realtors, redlining, etc) took advantage of, and fanned, the fears, as well. Heck, there was this rolling ‘wave’ of turnover coming north for a couple of decades.
    But, as I say, Kingsbridge Road, East & West, looks busy with stores and shoppers, and I hope it continues to do so. Now we have a new wave of complicated factors pushing rentals up. After WWII the City responded with rent regulation during a time when returning vets by the thousands were starting new households and booming with babies. It seems only logical to me that, if we’re back in that position due to a new era of different complicated factors, we should return to similar solutions.
    I have no patience with people who claim rent rules ‘ruined’ The Bronx. Kingsbridge Heights never burned. The buildings are obviously still profitable. Many other similar neighborhoods with similar housing (Sheepshead Bay, etc.) under the same regulations remained stable.
    The current store owners should be protected. The current residents, too, who are just trying to enjoy the same place I happened to enjoy as a kid.
    Just a few stray thoughts here.
    Thanks.

  7. sargent rock II

    all the sweet rhetoric in the world wont help the reality of bronx.
    Scapegoating, Stereotyping,racist – prejudice,elitist – gentrification.

    low life bottom feeders only accept heavy handed authoritarian rule of law.

    the unachievable idealistic utopia will never ever occure in dirty broke down bronx.

    take all the smelly food and loud noisy hip poop out of bronx.

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