Small Business Challenge

Eliot Brown does a nice job in the Observer cataloguing the effort by a wide range of small business groups to pass what is called the Small Business Protection Act-a bill that would insulate small businesses against arbitrary eviction and other landlord abuse. Robert Jackson, the bill's sponsor, isn't getting much help from council leadership, even though there are enough supporters to pass the measure should it be allowed to come to a vote.

As Brown points out: "With a month left before the current Council term ends and legislation expires, Mr. Jackson is scrambling to bring his bill to a vote—it has the official support of 30 of 51 members—making noise, threatening and pressuring fellow members to help him move on his top priority. The main resistance comes from Speaker Christine Quinn—Mr. Jackson said Mr. Yassky was deferring to her on a vote as is customary—who says she believes the bill would be ruled illegal by the courts."

Perhaps so, but as Eliot reminds us, there have been numerous bills that were of questionable legality that have managed to pass the council-indicating that this legislation has other impediments, like an enraged real estate community: "Mr. Jackson’s unusually strong push has sent a jolt of fear through the real estate world that had, until recently, paid the bill little attention, and industry advocates are now working to erode the bill’s support on the Council (though they do not seem to think there is much threat that the bill will come up this year). Landlord groups balk at the mere mention of new regulation on commercial rents, and seem to find Mr. Jackson’s legislation nauseating."

To us, the fact that the bill has generated this much support-both within and outside of the city council-is a tribute to Steve Null's organizing efforts-and his ability to bring so many disparate small business groups together on this contentious issue. It also underscores just how bad it is for small business in this city-and how its plight has been exacerbated under the Bloomberg watch, something we have underscored in our previous post..

As the Observer tells us: "The bill’s backers, led by a large set of minority business owners, call it absolutely essential for the survival of small businesses in the city. Landlords’ ability to dramatically raise rents after a lease expires forces far too many neighborhood stores to shutter, the advocates say, leaving streets with a limited and unhealthy variety of retail."

We're not really sure that this legislation is the silver bullet that is needed to address the severity of small business problems in the city-and we haven't been asked by any of the groups to get directly involved on the issue-but we understand where all of the angst is coming from. And it has been made that much worse by a businessman mayor who is simply tone deaf on anything related to neighborhood retailing.

And Big Real estate doesn't present an attractive opponent on this concept when it argues the following: "Then there is also criticism over the bill’s timing. In a recession, when rents are naturally falling everywhere, there is less hue, cry and demonstrated urgent need compared to the heady days of rapid gentrification and rent hikes a couple of years back."

Yeah, bad timing Little Guys. Just when the rent situation's getting better for you, you try to ram this rent bill through the council. Of course, the current recession has already led to the record shuttering of local stores; creating a situation where some falling rents don't come close to alleviating the current plight of the store owners.

But all of this back and forth elides for us the more severe underlying issue-the absolute heinous business climate in the city, one that is precipitated by a big government culture that the permanent government (including the real estate moguls) have done little to address. And the mayor's role here has not been insignificant.

We get as nice glimpse of this in a NY Post editorial today on Bloomberg's labor policy. Under the mayor, city government has grown almost exponentially, with municipal labor being aggrandized by a chief executive who apparently shares their grand vision: "Maybe this is Mayor Creampuff's -- er, Bloomberg's -- idea of driving a hard bargain. "There are newspapers that think we've been too generous with our unions," the mayor said recently. "I don't happen to think so. If you want great services, you have to have good people . . . You have to pay them fairly." It's an odd message to send at a time when the city's facing a $5 billion deficit -- and negotiating a new contract for its 80,000-plus schoolteachers."

All of this underscores the real challenge that has led to crisis pushing the organizing efforts behind the Small Business Protection Act-the size and scope of government; and the tax and regulatory structure that makes it so difficult for small businesses to survive in NYC. Put simply, Bloomberg's philosophy of government isn't that dramatically different from that of the Working Families Party-and it is this philosophy, along with those who promote it, that need to be confronted before the city's finances collapse completely (along with those of NY State).

Which is why we were disappointed-but understood-when the coalition behind the current protection measure made a deal to support the Paid Sick Leave Bill sponsored by the WFP. As the Observer points out: "The bill's supporters are no political fools. A set of small-business owners appear to have formed a pact with the increasingly influential Working Families Party to push the legislation. At a hearing last week on the WFP’s top priority, a paid-sick-leave bill, the small-business owners testified in favor of the commercial rent bill, which generally is opposed by businesses, as it adds to their cost. The WFP recently sent a letter of support to the Council in favor of Mr. Jackson’s bill (the group has previously said it is in favor of the legislation)."

Not a really good move in our view, but made in desperation since the WFP's opposition to protection would thoroughly sink its chances of passing. But these bedfellows are just too strange for us-and the short term gains aren't worth the deal with the forces that are, to us, deleterious to the long term health and survival of Mom and Pop in New York. The sick leave bill symbolizes the forces that are deadly for small business success.

The more meritorious and challenging battle, is the one that looks to confront the deteriorating business climate-and does so by aligning businesses, both big and small, with the city tax payers and homeowners. This is a righteous fight that, in the long run, will do more for the little guys than the current rent protection bill will ever do.