The New York City Council Committee on Small Business Proposals

The New York City Council Committee on Small Business Proposals

Intro. 90 (Brewer)

Storefront Business Bill of Rights

*more details below

This legislation would establish a comprehensive regulatory framework governing leases for many ground-floor and second-floor retail storefronts in New York City. Among other things, it would:

• Require owners to provide extensive disclosures before accepting an initial rent payment, including historical and projected operating expenses, certificates of occupancy, and information regarding violations and construction history.

• Prescribe lease renewal and negotiation procedures based on lease length.

• Grant tenants rights to extend leases under certain circumstances even when the parties have not reached agreement on renewal terms.

• Cap rent increases during extension period.

• Create a private right of action allowing tenants to seek penalties, damages, attorney's fees, and injunctive relief for alleged noncompliance.

This proposal would represent one of the most significant City-level interventions into commercial leasing relationships in recent years. REBNY has significant concerns about its impact on contract negotiations, leasing flexibility, and litigation exposure.

Intro. 408 (Riley)

Small Business Marketing Assistance Pilot Program

This bill would require the Department of Small Business Services (SBS) to establish a pilot program that matches small businesses with social media content creators to assist with marketing and advertising. SBS would administer the program, conduct outreach, and report on its results. The bill is primarily a business assistance initiative and does not directly affect commercial leasing or property ownership.

Intro. 578 (Gutiérrez)

Reforming the Industrial Business Zone (IBZ) Boundary Commission This legislation would modify the governance of the Industrial Business Zone Boundary Commission by:

• Expanding commission membership.

• Requiring a two-thirds supermajority vote for changes to existing IBZ boundaries.

• Creating new conflict-of-interest restrictions for commission members.

• Increasing notification requirements regarding approved boundary changes.

The proposal could make future modifications to Industrial Business Zone boundaries more difficult and may affect long-term industrial, commercial, and redevelopment planning.

Intro. 874 (Maloney)

Legacy Business Registry and Preservation Fund This bill would establish a City-maintained registry recognizing businesses that have operated in New York City for at least 20 years and have made significant contributions to their communities. It would also establish a preservation fund that could provide grants to qualifying businesses and to property owners who enter into long-term leases with eligible legacy businesses facing displacement. The proposal seeks to preserve long-standing neighborhood businesses through recognition and financial incentives rather than through direct regulation of commercial leases.

Resolution 496 (Cabán)

Resolution Supporting Commercial Rent Control

Resolution 496 calls on the New York State Legislature to enact, and the Governor to sign, the New York City Small Business Rent Stabilization Act (A.5568-A/S.8319), which would establish a commercial rent control system and create a commercial rent guidelines board. REBNY strongly opposes this legislation. This State legislation would:

• Cap commercial rent increases and mandate lease renewals.

• Apply broadly to commercial leases and rental agreements across New York City, rather than being limited to a narrowly defined class of small businesses.

• Discourage investment and create financing challenges.

• Reduce leasing flexibility and increase regulatory uncertainty.

• Make owners less likely to lease space to newer and independent businesses.

Detailed Summary: Intro. 90 ("Storefront Business Bill of Rights")

Because of its potential impact on property owners, brokers, and retail tenants, we are including a more detailed summary of Intro. 90 below. Overview Intro. 90 would create a comprehensive set of legal protections and disclosure requirements for commercial tenants leasing storefront retail space in New York City. The bill would regulate landlord-tenant relationships for many ground-floor and second-floor retail spaces and establish detailed procedures governing renewals, extensions, disclosures, and enforcement.

Mandatory Landlord Disclosures Before accepting an initial rent payment, landlords would be required to provide:

• The certificate of occupancy covering the premises.

• Historical operating cost information covering the prior two years, including taxes, utilities, insurance, commercial rent tax, BID assessments, and other charges.

• Projected operating costs for the following two years.

• A ten-year history of known legal violations and construction activity affecting the property.

Lease Renewal Requirement For longer-term leases, the bill would:

• Require renewal offers or non-renewal notices to be delivered at least 120 days before lease expiration.

• Provide certain shorter-term tenants with limited lease-extension rights, including extensions of up to six months depending on lease length.

• Establish mandatory deadlines for tenant responses.

• Require renewal negotiations to occur through specified written procedures.

• Require both parties to use "best efforts" to reach agreement on renewal terms.

Similar procedures would apply to shorter-term leases, with adjusted timelines. Tenant Lease Extension Rights One of the most significant provisions would allow tenants to extend leases under certain circumstances when renewal negotiations have not produced an agreement. Depending on lease length:

• Tenants could receive a one-year extension option for longer leases.

• Additional extension rights would exist for three-to-six-month and one-to-three-month leases.

Rent During Extensions The legislation establishes capped rent increases during these extension periods. Depending on notice timing, permissible rent increases would generally range from 7% to 10%. Enforcement and Litigation Tenants would be authorized to bring actions against owners for alleged violations. Courts could:

• Impose civil penalties of up to 3% of a property's assessed value.

• Order compliance with the law.

• Award attorneys' fees, court costs, compensatory damages, punitive damages, equitable relief, and injunctive relief.