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On the awning outside Liberato Foods in Washington Heights is a simple message stating the mission of the market’s longtime owner: “SU NOMBRE JOSÉ LIBERATO, SU DESTINO VENDER BARATO.” Translated, it reads, “His name, José Liberato; his destiny, to sell cheap.”
For some forty years, that’s what Liberato has tried to do for his many customers — but now that mission may be in jeopardy as he faces a problem that is becoming all too common in this largely Hispanic neighborhood: His landlord is threatening to raise his rent.
Liberato’s not alone. On February 2, a group of small-business owners and Washington Heights residents gathered on the corner of Broadway and 169th Street to rally for a bill currently before the New York City Council designed to protect small businesses — many, like Liberato’s, owned by Latino immigrants. Some face eviction when their leases expire, unless they’re able to pony up what can amount to double or triple their current monthly rent. It’s a problem other neighborhood business owners say has spread “like cancer” through the outer boroughs and begun to eat away at Upper Manhattan.
“I’m here to show support for my neighbor,” says Manuel de la Cruz, owner of Friendo y Comiendo, a small Dominican restaurant on Broadway in Washington Heights. “Liberato is a landmark for our community. It’s been there for almost forty years [and] the landlord is raising the rent from $10,000 to $30,000. It’s a big problem because he has 25 employees. This is his whole life, and it’s closing — can you imagine what he’s feeling? It’s the one supermarket that has everything for our Dominican community.” (Liberato did not wish to be interviewed for this article.)
The City Council bill, known as the Small Business Jobs Survival Act, would give commercial tenants greater protection from exorbitant rent increases as well as rights to renew their leases and negotiate fair lease terms. Bronx Councilwoman Annabel Palma, who reintroduced the bill in June 2014, says commercial tenants deserve to have a fair lease negotiation process — which they currently do not. As things stand now, a building owner can refuse to renew a commercial tenant’s lease or levy rent increases with little notice.
“It’s not only the landlords that are responsible for pushing out small businesses, it’s also the lawmakers that are not doing what they’re supposed to do,” says Luis Tejada, a tenants’-rights activist and executive director for the Mirabel Sisters Cultural and Community Center, an advocate for the neighborhood’s small businesses and low-income residents. “The landlords can do whatever they want because, under the law, they have that power. They can displace you to get a more lucrative tenant.”
Among the bill’s staunchest opponents is the real estate industry itself. John Banks, president of the Real Estate Board of New York, declined an interview request from the Voice, but he did issue this statement: “For nearly four centuries, the one constant about New York City has been that it is always changing. The City’s dynamism, in part, is driven by its ever-changing population, building stock and mix of businesses. Understandably, some don’t like change. However, such feelings don’t justify unconstitutional legislation like the Small Business Jobs Survival Act.”
“I’m eager to know what is unconstitutional about allowing a business and a landlord, just like a tenant and a landlord, to have the opportunity to negotiate a lease,” says Palma. “It’s in anyone’s right to be able to negotiate. We’re not demanding leases. We are asking for an ability to negotiate.”
Tejada says substantive change won’t happen until elected officials advocate for policies that will benefit the community. “[Elected officials] know the situation. They’ve known for thirty years. But they aren’t doing anything about it.”
Tejada is not overstating the history. In 1985 — when then-Councilmember Ruth Messinger introduced what was known at the time as the Small Business Preservation Act — a bodega owner could rent space in Washington Heights and elsewhere for as little as $5 per square foot. The next year, Mayor Ed Koch created a handpicked commission whose members were bankers and real estate brokers who were pro-business and tilted heavily toward the side of commercial landlords. The bill died. Over the next thirty years similar bills have come forward only to die in committee.
Rents for small storefronts in Washington Heights have risen as high as $100 per square foot, according to the Real Estate Board of New York, a trade association for the industry. When a business can’t pay up, residents can count the days until a shiny new Duane Reade opens in its place.
Over the years, eight separate bills have tried to solve the small-business crisis, says Kirsten Theodos, an organizer with TakeBackNYC, a grassroots organization that lobbies on behalf of small businesses. None of the eight bills, she adds, ever reached the council floor for a vote. In 1987, Koch threatened to veto Messinger’s bill if it ever came out of committee — it didn’t. In 1988, the New York Times ran an editorial against commercial rent control, extolling the “free market” and asking, “What is the public interest in artificially protecting storekeepers who can’t meet a competitive market price?”
This summer, the Voice wrote about seven Latino-owned businesses, all located in the same Washington Heights building at 3800 Broadway, that were forced to close after being served with eviction notices. At that time, another version of the Small Business Jobs Survival Act was languishing in City Council; it didn’t have enough sponsors for a hearing.
“That bill would’ve saved them and all the mom-and-pop stores being pushed out by greedy landlords,” says Theodos. “All the landlords care about is maximizing their profits and aggregating space — they’re not concerned about how the businesses serve the communities and how longtime residents have their livelihoods impacted.”
Manhattan Borough President Gale Brewer, who served on Messinger’s staff in the 1980s, says she is readying her own version of a bill that would protect small-business owners. Her version — much more lax than the council’s measure — would require landlords to send a lease renewal notice to business owners six months in advance; if terms cannot be reached, the current lease must be extended for one year, though the rent can be raised by as much as 15 percent.
Brewer’s proposal is starkly different from what she pushed for when Messinger first offered her bill in 1985. That measure called for binding arbitration. In other words, the arbitrator would be like a judge — the ruling would carry the force of law. Koch threatened to veto the bill, but it never reached his desk.
Councilman Mark Levine, one of the sponsors of Palma’s legislation and a vocal supporter of small-business owners, says that bills with tougher protections have failed to pass for decades and that Brewer is pushing a more conservative proposal in hopes of getting something — anything — passed.
“She has become frustrated with the challenges of moving it forward and felt like she needed to introduce something that had a higher likelihood of passing so it could bring some relief to commercial tenants,” says Levine, whose district spans from the Upper West Side to West Harlem and Washington Heights. Brewer did not respond to numerous requests for comment.
Levine adds that the Small Business Jobs Survival Act has yet to receive broad support from the City Council. Though there are currently 28 co-sponsors, enough for a hearing, Councilmember Robert Cornegy, the Small Business Committee chair, is not one of them.
But business owners like Alexis Herrera, who owns A&H Photo Studio and Camera on 165th and Broadway, says something needs to be done before his lease is up in a couple of years, lest he find himself in the same situation as Liberato Foods.
“The landlord can say, ‘You pay $5,000? I’m going to raise your rent to $9,000,’ ” he says. “What am I going to do? I can’t pay that. I’ll have to get out. If I know my rent is going to be raised 1 percent or 2 percent, I can make a plan. But there’s no protection or law that says they can’t raise it more than that. They can say any price.”