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Councilmember Tony Avella (at podium) speaks at a June 17 press conference at City Hall.

Advocates say landlords extorting small businesses

Published: Thursday, June 18, 2009 11:58 AM CDT
By Patrick Hedlund 
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Small business owners across the city are being forced by landlords to pay money under the table or face losing their stores, a group of mom-and-pop advocates charged at rally on the steps of City Hall on Wed., June 17.

Led by Queens Councilmember Tony Avella, a candidate for mayor, the group condemned the practice of landlords demanding additional payments on top of rent to secure leases for tenants.

“These businesses who contribute to the economy in the city—who are the backbone of every neighborhood in this city—must be protected,” said Avella, who has requested a federal investigation into the practice. “The real estate industry in this city and the unscrupulous landlords must be regulated.”

According to a recent survey of 1,200 Hispanic small business owners conducted by the U.S.A. Latin Chamber of Commerce and the Bodega Association of the United States, nearly a third responded that their landlords demanded additional money as a condition to continue or begin lease negotiations.

“We believe this number is higher, because many small business owners did not understand the confidentiality of the survey and were afraid to get in trouble,” said Miguel Peribanez, president of the chamber of commerce.

“We don’t want to control the rent, we don’t want to control the landlord—we want to control the extortion and what they’re doing to us,” added Ramon Murphy, president of the Bodega Association. “We’re not going to recommend any immigrant make business here in New York because it’s so risky right now.”

The survey also found that 87 percent of Latino-owned small businesses felt they had no rights during the lease renewal process and 92 percent believed that the process favored landlords so much that they abused their power.

The former owner of a Harlem meat market, who spoke at the rally, claimed his landlord refused to renew his lease after 10 years at the location unless he paid $50,000.

“They’re raping our community, they’re raping our businesses, they’re raping our families and our children because they’re taking the food off their table,” said Quenia Abreu, of the New York Women’s Chamber of Commerce.

In response, Avella wrote a letter to the United States Attorney’s Office in the Eastern and Southern Districts asking for an investigation into this “illegal activity.”

“This is clearly a case of extortion, since the small business owners have no alternative but to pay this money or lose their entire business, which many have worked years to build,” Avella stated in the letter.

Councilmember Robert Jackson of Upper Manhattan introduced a bill last year that would force tenants and landlords into binding arbitration to negotiate a fair lease agreement if they can’t come to terms. Beyond that, the measure proposes setting rent increases that can’t exceed a certain percentage to ensure small business stability.

“We must stop them from stealing from small business owners, from trying to take their profits,” Jackson said. “If they want it, let them earn it like everybody else. Let them work 12, 14, 16, 18 hours a day.”

While the problem has affected immigrant-heavy communities more acutely, neighborhoods like Greenwich Village and Chelsea have also suffered, explained Community Board 2 chairperson Maria Passannante-Derr. “It’s pandemic at this point citywide,” she said. “There are up to 12 stores on Hudson St. alone that are empty, and the Village is starting to look like a ghost town.”

Passannante-Derr, who is also running for City Council in the Third District, supports Jackson’s bill and criticized recent small-business efforts supported by some elected officials as not doing enough. “I don’t think it’s an extreme remedy,” she said of Jackson’s proposed legislation, which is viewed as a form of commercial rent control. “I think it’s a good step forward.”


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