BY SHARON WOOLUMS | Four years ago, I started a quest to find out which candidates had a real solution to stop the closing of our small businesses and save the character of our beloved Village.
In most American cities during an election this would be an easy task. New candidates would welcome the opportunity to show off problem-solving skills, while incumbents highlight their progressive records of accomplishments. But this is New York City politics where the party most responsible for causing this crisis and blocking real solutions has the most powerful lobby (the Real Estate Board of New York) pouring huge sums of real estate cash into the election.
Self-proclaimed “progressives” were elected by pledging to steer the city in another direction from Mayor Bloomberg’s pro-real estate policies and end economic inequality. Yet a bill before this progressive legislation, the Small Business Jobs Survival Act, giving business owners rights to lease renewal and to negotiate fair lease terms, is denied a public hearing while weaker proposals with no possibility of saving a single business are promoted.
Responses from lawmakers to my quest ranged from “no comment” to the S.B.J.S.A. has legal problems. I needed to find out if these claims were substantiated by credible legal review of case law. Small business advocates claim they were merely a phony legal roadblock cooked up by REBNY and the City Council Speaker’s Office to stop a vote on legislation regulating lease renewals while giving politicians cover for doing nothing as the crisis worsened.
Over my four-year series on solutions to save small businesses, whenever the “it’s not legal” answer was used, I asked lawmakers to send me legal documents supporting their claims. No response.
But guess what, politicos? Legal facts matter!
The S.B.J.S.A. is the most legally vetted piece of legislation in New York City’s history. The scrutiny of its many versions spans 30 years, including legal oversight by the city’s Law Department, a special public hearing prior to a vote by committee, two amendments to the bill recommended by the City Council’s Legal and Legislation departments, two motions to discharge the bill from committee, 11 public hearings at which REBNY could challenge the act’s legality, support by seven prime sponsors over the years who submitted the bill to Council Legal for review, 18 years of court rulings (many from the state’s highest court, the Court of Appeals) and, most importantly, a vetting by an independent legal review panel of the bill’s constitutionality held in the Bronx courthouse.
On May 7, 1985, former Mayor Ed Koch and Council Speaker Peter Vallone created the Small Retail Business Study Commission, exploring the impact of higher rents on merchants. They appointed Frederick A. O. Schwarz, the city’s corporation counsel (the head of its Law Department), to oversee legal questions. The committee requested the Law Department do legal research to determine if the city had authority (“home rule”) to enact commercial rent-regulation legislation.
On June 3, 1986, the Law Department issued case-law findings to the commission, concluding, “These cases illustrate clearly that the City has broad powers to regulate economic activity if a public purpose is served.” This legal conclusion from the corporation counsel has never changed publicly in more than 30 years. The Law Department cleared all options, including the S.B.J.S.A., introduced by then-Councilmember Ruth Messinger, as being fully constitutional and within the city’s authority to enact.
A minority report led by Ron Shiffman, founder of Pratt Institute’s Center of Community and Environmental Development, favored Messinger’s plan for binding arbitration between landlords and merchants. If it was felt the minority-supported arbitration bill was unconstitutional or the legal power was lacking to enact it, the majority members would have brought these facts out in their lengthy dissent against the minority report, which was never mentioned.
In October 1988, a special City Council hearing devoted to the legality of the original Jobs Survival Act was held prior to a decision on whether the Council’s Economic Development Committee would vote on the bill.
The main testimony came from the corporation counsel — again, that’s the city’s own Law Department — which, after extensive research on New York State’s Commercial Rent Control Law and the many court decisions about it — concluded that the bill was constitutional and that the city had power to enact it.
This legal conclusion, grounded in 18 years of extensive litigation in state courts, cited many cases and rulings from the state’s highest court, the Court of Appeals. The Economic Development Committee subsequently agreed and scheduled a vote on the bill for Dec. 1, 1988 — but it was never followed by a vote of the full City Council.
On Nov. 12, 2010, a legal review panel was held at the Bronx courthouse. All parties were invited to give arguments supporting their legal claims.
In December 2010, the legal review panel released its final report: “The Small Business Survival Act, as it is presently written, is fully constitutional and legally sound to withstand court challenges. The legal assessment of the Small Business Survival Act by the Legislative Division and The Office of the General Counsel, ‘that the bill is vulnerable to the legal challenges,’ is an inaccurate legal assessment of the bill due to an excess reliance upon a deficient evaluation of a single court decision handed down in 1987 in another state, California.”
Neither the city’s corporation counsel nor REBNY attorneys responded to the legal review panel’s findings. The powerful Mayor Koch and Speaker Vallone failed on legal grounds to stop a Council committee vote on the original Jobs Survival Act. Twenty-five years later, Mayor Mike Bloomberg and Council Speaker Christine Quinn, however, did succeed in stopping a committee vote on the bill on alleged legal grounds that were never debated. Meanwhile, current Mayor Bill de Blasio, Speaker Melissa Mark-Viverito and the Council leadership are so afraid of the S.B.J.S.A. that they will not even allow a public hearing on it, which would force REBNY and the speaker’s Council attorneys to substantiate in public their challenges that the bill “isn’t legal.”
While small businesses are being destroyed and jobs lost, why do “progressive” lawmakers make false claims against legislation that is likely the only real solution to end the crisis and save our local economy’s backbone? Perhaps they know something “We, The People” don’t — that we no longer have a democracy of, for and by the people and that REBNY controls City Hall.
