Small Businesses Look To Albany For Rent Relief


Earlier than the pandemic, Yeworkwoha Ephrem paid $9,800 a month in lease for her Ethiopian restaurant Ghenet, in Brooklyn’s Park Slope. However after COVID-19 shut down town in March, Ephrem stated she wasn’t in a position to pay her landlord. Not like different eating places, she couldn’t construct a sidewalk eating area and stated there weren’t sufficient deliveries and takeout orders to carry her enterprise again to something resembling regular.

“I actually felt responsible,” she stated, sitting in her empty restaurant that used to have the ability to host as much as 65 folks. 

Ephrem certified for a small enterprise mortgage and federal assist via the Paycheck Safety Program (PPP) to pay her 9 remaining workers (she stated 4 left on their very own). In the summertime she approached her landlord about paying lease. “I ask him if I can provide him $6,000 in any other case I should shut,” she defined. “He agreed with that.”

However she stated it’s nonetheless an enormous stretch. The 75-year-old restaurant proprietor stated she can not benefit from even restricted indoor-dining beginning this weekend as a result of she’s received diabetes and fears for her well being.

“Proper now no cash’s coming to me, completely no cash’s coming to me,” she stated. “All the pieces I’m doing is for the workers and the lease to maintain the restaurant open and going.”

With considerably fewer prospects, shops and eating places throughout town haven’t been in a position to pay the lease. Nobody is aware of precisely what number of have closed, from the Document Mart within the grungy Occasions Sq. subway station to neighborhood dry cleaners and a favourite Thai restaurant in Jackson Heights. There are estimates that no less than 4,000 closed completely by the center of final September, primarily based on Yelp listings. And the moratorium on industrial evictions expired final month.

To assist these companies, Albany lawmakers are contemplating laws known as Save Our Storefronts. It will apply to these with 25 or fewer full-time equal workers that may doc shedding greater than half their income due to COVID-19.

For these qualifying companies, landlords would cut back their month-to-month lease by 20%. The tenant would then pay as much as one third of that new, decrease lease. The state would use a brand new $500 million fund to pay the owner the distinction, enabling them to get 80% of their regular month-to-month lease.

For Ephrem, that might lead to paying about $2,500 a month — a lot lower than the $6,000 she’s now contributing, and which nonetheless isn’t the total lease. 

“At the very least I can pay myself a little bit bit,” she stated, if the legislation is handed. “I’ll be capable to provide you with totally different dishes like I used to do.” Ephrem had reduce on meat entrees to save cash.

Yeworkwoha Ephrem and another woman cook food over a stove in the kitchen


Yeworkwoha Ephrem and one in every of her workers at Ghenet

Beth Fertig / WNYC

Her landlord, Pedro Rodriguez, stated he helps the proposal in Albany. His household has owned the constructing on Fourth Avenue and Douglass Avenue because the Nineteen Seventies, and he stated Ephrem has been faithfully paying since she leased the area in 2007.

“It’s going to assist us and it’s going to assist the tenant as nicely,” he stated, after studying about Save Our Storefronts. Receiving 80% of the lease is best than the 60% he’s presently getting, he stated, and sufficient to assist with bills.

“I’ve mild, gasoline, taxes on the constructing, upkeep on the constructing,” he defined. 

However Rodriguez wonders how lengthy he must wait to be reimbursed by the state for the remainder of his lease, and if the method would turn out to be too difficult. 

The Actual Property Board of New York is elevating comparable questions.

“We help assist to small companies,” stated Paimaan Lodhi, the Actual Property Board of New York’s senior vice chairman of coverage and planning. “We help direct assist to small companies. This invoice is overly difficult and seeks to change leases and that’s not essential. Essentially the most impactful factor that the legislature or governor may do is present direct aid to small companies.”

REBNY additionally issued a report final month discovering eight retail corridors in Manhattan skilled their lowest common asking rents in no less than a decade after the pandemic struck, one other unhealthy signal for landlords.

Save Our Storefronts was proposed final yr by Assemblyman Harvey Epstein and Senator Brad Hoylman, each of Manhattan, and it by no means superior. However the sponsors consider they’ve a greater shot now as a result of New York may get greater than $23 billion in federal assist from the Biden administration, which can be utilized to arrange the $500 million fund.

“Final yr, we did not have the federal {dollars} to do it,” stated Epstein. “This yr, it seems to be like we’re extra prone to have federal {dollars} coming in and probably have further state income.”

He famous that progressives are urging Albany to boost taxes on the rich and Democrats now have a supermajority within the state senate. Laws has additionally been proposed to increase the moratorium on evictions for industrial tenants and supply further assist for small companies.

Epstein acknowledged landlords would “take a haircut” by being required to decrease their lease by 20%. However he stated they’d nonetheless get 80%, which is greater than many tenants are presently paying.

“It isn’t full compensation, however simply compensation and what’s essential to make sure that they will proceed to have the industrial tenant,” he defined. 

Some have raised issues that landlords may sue in the event that they consider the federal government is violating the Structure’s safety in opposition to taking property with out simply compensation.

As for issues in regards to the paperwork, Epstein stated companies at the moment are in tax season, and determining how a lot cash they misplaced. He stated that ought to make it simple for them to submit qualifying paperwork. If the laws makes it into the state funds, which is due on April 1st, small companies could possibly be compensated rapidly. And he stated conversations proceed about whether or not it would make extra sense for landlords to use on behalf of their tenants.

Boosters of Save Our Storefronts see one different upside: a “reset” for industrial rents.

“Making a residing as a small enterprise proprietor or a restaurant in an enormous restaurant in New York is nearly not possible now due to the outrageous rents,” stated Linda Pagan, proprietor of The Hat Store NYC in SoHo and an organizer with Save Our Storefronts.

“Folks went out of enterprise in a short time as a result of they have been barely making it,” she defined, pointing to massive retailers in her neighborhood equivalent to French Connection.

Pagan wouldn’t disclose the month-to-month lease for her small store, however stated she was not in a position to pay something from March to June whereas she was closed. These are the height months for promoting high-end hats due to commencement ceremonies and Derby Day events. Pagan stated she received a small enterprise mortgage and PPP assist and began paying half her lease later final yr.

“My landlord noticed that as an indication of goodwill. However we have not come to an association in regards to the again lease.”

Tenants are nonetheless on the hook for the lease they owe, even when the eviction moratorium is prolonged, as some lawmakers have proposed.

If authorised, Save Our Storefronts may additionally assist companies that didn’t qualify for federal pandemic assist. Tomislav Kajic needed to delay opening his new Astoria restaurant Hutch till October, and stated he has barely gotten any prospects because the climate turned chilly. In January, his state senator, Michael Gianaris, visited to speak in regards to the proposed laws. 

“I actually wished to consider him, that it was vital to get this carried out,” stated Kajic.

He claims the senator stated he would order meals from Hutch the subsequent day, however he by no means noticed that order come via. He’s doubtful about assist from Albany, saying it might be a “big shock that the federal government really does one thing for us for a change.” However he’s nonetheless holding out hope.