State lawmakers on Monday proposed a law that would give commercial property owners a long-term tax break if they agree to renegotiate leases with their small-business tenants.
Under the proposal, the tenants would be offered so-called recovery leases, lasting at least 10 years and with limited annual rent increases, and the landlords would be eligible for property-tax abatements.
Commercial tenants restructuring their current lease, or those entering into a new lease for space left vacant for reasons other than eviction would be eligible to enter into a recovery lease, according to the bill.
“It is long overdue that we put into place relief measures to protect our small businesses that are at risk of closing or laying off employees,” said Assemblywoman Yuh-Line Niou of Manhattan. “If we do not put this legislation in place, more of our small businesses, which are mostly immigrant-owned, run the risk of closing and leaving our neighborhoods without the resources and vibrancy we need.”
The bill also would give the city room to add additional incentives or restrictions as it sees fit. City Councilman Brad Lander of Brooklyn is working with the Brooklyn Chamber of Commerce, the New York Hospitality Alliance and other groups to create the program’s specifics.
“With federal relief uncertain, we are proposing a new path for long-term stability and affordability for small commercial tenants,” Lander said. “By providing tax relief for commercial property owners, we can help small businesses lock in rents at stable, lower rates, a forward-thinking tool that will be essential for the rebuilding and recovery yet to come.”
“The possibility of negotiating a recovery lease with my landlord and affording him the benefit of real estate property-tax relief is a win-win situation,” said Amy Fonda Sara, owner of Zuzu’s Petals, a Brooklyn flower shop.
Small businesses have felt the brunt of the pandemic’s impact on the city’s economy. More than half of them are worried about permanently shuttering, according to a Brooklyn Chamber of Commerce survey.
With continued restrictions on capacity and indoor dining, the city’s restaurants and bars are struggling for survival. More than three quarters of them did not pay their full July rent, according to a New York Hospitality Alliance report, and 37% of them didn’t pay rent at all.
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August 18, 2020 at 06:00PM
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Lawmakers propose property tax break in exchange for commercial lease renegotiations - Crain's New York Business
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