De Blasio to retail landlords: Fill the space or prepare to pay the tax

Mayor wants to see an end to property owners sitting on useful store space

New York /
Apr.April 02, 2018 02:30 PM

Mayor Bill de Blasio and an empty retail unit on Greene Street in Soho

Vacancy rates along Manhattan’s prime shopping corridors have exploded in recent years, as rents stagnate and building owners would rather wait out the market instead of chopping their prices. That’s led to a new form of blight in neighborhoods like the Upper West Side and Soho that are hardly known for it.

Mayor Bill de Blasio, speaking with Brian Lehrer on WNYC last week, said he’d like to do something about it–or would like the state to, anyway.

“I am very interested in fighting for a vacancy fee or a vacancy tax that would penalize landlords who leave their storefronts vacant for long periods of time in neighborhoods because they are looking for some top-dollar rent but they blight neighborhoods by doing it,” he said. “That is something we could get done through Albany.”

The New York Post reported that Manhattan’s vacancy rates doubled from 2.1 percent to 4.2 percent between 2012 and 2017, citing a City Council report published at the end of last year.
“Many landlords prefer to wait for area rents to increase before committing their real estate to long-term leases with relatively fixed terms,” the report concludes.“If these landlords have deep pockets and large property portfolios, it may make more financial sense to claim a tax loss on vacant property than to rent at a non-optimal value.”

The newly elected speaker of the city council, Corey Johnson, has previously supported commercial rent control measures that could effectively bring many rents in the city and, for landlords, eliminate the option of waiting on a market rebound before leasing again.

In October, The Real Deal reported that retail sat vacant in nearly $1 billion worth of newly-bought Soho real estate. [NYP]Will Parker


Related Articles

arrow_forward_ios
Clockwise from top left: 312 West 34th Street, 61 North 9th Street, 639 Classon Avenue, and One Fulton Square (Credit: Google Maps)

These were the top 10 NYC retail leases in July

These were the top 10 NYC retail leases in July
Ricky's at 830 Broadway (Credit: NYC Go)

Ricky’s, iconic NYC beauty shop, faces
more closures

Ricky’s, iconic NYC beauty shop, faces
more closures
From top, clockwise: Cushman & Wakefield's Joanne Podell, Showfields' Amir Zwickel, Appear Here's Josh Yentob, Brookfield Properties's Mark Kostic (Credit: Getty, LinkedIn)

When it comes to retail, “real estate in New York is fundamentally broken”

When it comes to retail, “real estate in New York is fundamentally broken”
258 8th Avenue (Google, Target)

Target planning yet another NYC store in Chelsea

Target planning yet another NYC store in Chelsea
Churchill Real Estate's Justin Ehrlich and 381 Broadway (Google Maps)

Two-year Tribeca foreclosure saga continues with lawsuit over $20M

Two-year Tribeca foreclosure saga continues with lawsuit over $20M
Adam America's Omri Sachs and Dvir Cohen with 2503-2509 Broadway (Google Maps; Adam America)

Adam America secures $63M in financing for Upper West Side project

Adam America secures $63M in financing for Upper West Side project
Convene CEO Ryan Simonetti (Convene)

Convene closes Manhattan locations as corporate events fail to return

Convene closes Manhattan locations as corporate events fail to return
New York City District Council of Carpenters’s Monitor Glen McGorty (iStock; LinkedIn)

NYC carpenters union changes how it roots out mob ties

NYC carpenters union changes how it roots out mob ties
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...