It’s no secret that brick-and-mortar retail is suffering in New York City. And for co-op and condo boards with street-level commercial space, this trend has been financially punishing. Help may be on the way – or not.
The New York City Council has passed five bills designed to get a better grip on the problem, which has been widely attributed to unrealistically high commercial rents coupled with the relentless rise of online shopping. As reported by Gothamist, three of the bills will require building owners, including co-op boards, to provide the Department of Finance with annual data. The information, to be submitted as part of the annual Real Property Income and Expense (RPIE) report, includes the size of the commercial space, the duration of vacancies, the annual rent charged to every commercial tenant, rent escalations, and concessions. After gathering the data, the bill’s sponsors hope to advance legislation to help owners of small businesses.
"We have witnessed the loss of far too many small businesses in the last several years, leaving only empty storefronts behind," says Helen Rosenthal, the city council member who introduced the storefront-tracking bill. Mayor Bill de Blasio is expected to sign the legislation into law.
Community groups as well as small-business advocates have largely been in support of the legislation. Among those who signed on to the bills were the Association for Neighborhood & Housing Development, UWS Save Our Stores, Cooper Square Committee, Fourth Arts Block, the NYC Artist Coalition, and Street Vendor Project.
Some co-op advocates are not so enthusiastic. “It’s a fishing expedition,” says attorney Benjamin Williams, who heads the property tax group at the law firm Rosenberg & Estis. “The city council doesn’t know why it wants this information, and compiling it is going to be a burden on co-op boards and their professionals.”
The legislation also raises unsettling questions, according to Williams. To wit: will the city impose a vacancy tax on owners of empty commercial space? Will it enact protections for commercial tenants similar to the protections for residential renters recently enacted by the state Legislature?
Williams adds that the abundance of vacant retail space has spawned a groundless urban myth. “Some people have a misconception that landlords get a tax break for vacant commercial space,” he says. “That’s just not true. Co-ops pay tax on their commercial space whether it’s leased or not.”
Co-op and condo board business broken down into bite-sized bits - 2 stories each week. Read now on all digital devices.
A free digital resource for co-op/condo board directors. Published twice a month. Read now on all digital devices.