Res 0581-2015

By Council Members Van Bramer, Cornegy, Chin, Constantinides, Eugene, Rose, Vallone and Mendez Whereas, The characters of New York City's neighborhoods are often defined by the long-term business establishments that have served the area for many years; and Whereas, Many of those businesses are small businesses whose owners own the property in which the business is located; and Whereas, As real estate prices in the City climb, many of those small business owners are induced to close or relocate their businesses outside of the City and to sell their properties to large developers; and Whereas, The City's commercial spaces are continuously commanding higher and higher rents that many long-term tenants can no longer afford; and Whereas, According to Crain's New York Business, the average asking Spring retail rent in Manhattan rose from $87 per square foot in 2002 to $114 per square foot in 2012; and Whereas, Crain's also reports that between 2013 and 2014, the average asking Spring retail rent on Fifth Avenue in Manhattan rose nearly 20% and those on Madison Avenue spiked nearly 30%; and Whereas, It is not only in well-established retail areas of the City that the rents are becoming unaffordable; and Whereas, According to a report released by CPEX Real Estate Services in May 2014, 9 of the retail corridors in Brooklyn tracked by the report saw at least a 100% increase in pricing since 2009; and Whereas, As a specific example, the retail pricing per square foot on Court Street in Brooklyn has risen from $35-$50 in 2009 to $100-$199 in 2014 as the retail corridor transitioned from mostly mom-and-pop shops to national retailers; and Whereas, As many of New York City's neighborhoods are quickly changing and increasingly becoming more gentrified, there is greater pressure on long-term small business owners to sell their properties to large developers and for commercial landlords to rent their spaces to larger, national chain stores that can afford to pay higher rents instead of retaining the long-term tenants who are already in place; and Whereas, No real property tax incentives currently exist for small business owners to keep their small businesses located in the City for long periods of time rather than selling the properties and moving the businesses elsewhere; and Whereas, Similarly, no real property tax incentives currently exist for commercial landlords to retain existing small and local businesses rather than to terminate the tenancies and seek higher rents from new tenants; and Whereas, A real property tax credit granted to a small business owner that would increase over the length of time that the small business owner owns his or her property would create an incentive to remain in business at a particular location; and Whereas, A real property tax credit granted to a commercial landlord that would increase based on the length of time that a particular commercial tenant had been operating its business out of the property would create an incentive for the landlords to retain long-term tenants; Whereas, Any real property tax credit granted to a commercial landlord should be contingent on a portion of the savings being passed onto the retained tenant in the form of a credit on rent; now, therefore, be it Resolved, That the Council of the City of New York calls upon the New York State Legislature to introduce and pass, and the Governor to sign, legislation establishing a real property tax credit for small business owners who own their properties and for commercial landlords who retain tenants. RC 01-12-2015 LS 2669