The Real Deal New York

Activisits push zoning changes, rent control for retail

By Catherine Curan | April 01, 2008 04:02PM

On a Sunday early this month, anti-chain store firebrand Reverend Billy and the so-called Church of Stop Shopping, a group that advocates for mom-and-pop stores, will kick off its latest event at St. Mark’s Church in the Bowery.

Joining the Reverend — a performance artist who is known for his impassioned opposition to Wal-Mart, Starbucks and the like — will be a local activist group, the East Village Community Coalition.

The EVCC is working with the Pratt Center for Community Development on a new survey of the neighborhood’s retail, set for completion this spring.

“We want to call attention to this project, and how it can eventually lead to rezoning in the East Village to ban formula retail,” said Michael O’Neil, communications director for the Church of Stop Shopping.

While the battle between big chains and mom-and-pop stores has raged in New
York City for decades, this year, Reverend Billy’s call for zoning change is gaining new momentum, both among activists and in
city government.

City Council Members David Yassky and Gale Brewer are drafting legislation centered on tax reform and zoning changes to aid mom-and-pop stores. Meanwhile, community groups such as the EVCC and the Park Slope Civic Council are developing their own plans, which are gaining support from New Yorkers caught up in a nationwide trend toward shopping locally.

“People are starting to talk about an urban environment,” said Catherine Bohne, vice president of the Park Slope Civic Council, which is developing initiatives to help small stores. She is also the owner of the Community Bookstore in Park Slope. “Clearly, there is a real value in these places that is not being addressed within the system.”

Whether the clock will ever be turned back on deep-pocketed chains like Starbucks and bank branches is uncertain. Still, given that many threatened small retailers list skyrocketing rents as their biggest challenge, some store owners, including Bohne, have commercial rent control on their wish lists.

Most sources on both sides of the debate, however, view that as unlikely. The concept has been introduced in the state legislature without gaining traction, and also failed in New York City in the late 1980s.

Jeffrey Roseman, executive vice president at Newmark Knight Frank, said commercial rent control is “sort of a non-starter.”

“It’s never been done, and why should it be done?” he said. “It hurts the property owners, and you’re going to get properties that fall into disrepair, and people will not want to invest money in New York.”

Politicians and activists view zoning changes and tax abatements as more viable tools to help small shopkeepers. Yassky cited the example of one element of the Bloomberg administration’s controversial proposal for new zoning in Harlem: the stipulation limiting ground-floor frontage of banks, one of the most active competitors that small stores face.

But as the controversy over rezoning of Harlem’s main street illustrates, efforts to alter zoning tend to provoke strong reactions. In that case, a chorus of community opposition has greeted the proposal for bigger and taller commercial buildings on 125th Street. Landlords, meanwhile, are likely to line up against changes aimed at boosting mom-and-pop stores.

“It could be a big mistake, both hurting business and reducing tax revenues,” said Dewey & LeBouef partner Stuart Saft, a real estate attorney with a long track record of representing landlords.

Roseman said limits for commercial zoning didn’t seem to pass muster.

“What’s the authority, just, ‘We don’t want it here?’ To
arbitrarily say we don’t want any more coffee places, clothing stores or drugstores, I’m just not sure,” he said.

He cited local success stories like Paragon and Gracious Home and said that “chains don’t kill the mom-and-pop stores. Poor execution kills mom-and-pops. Paragon is a mom-and-pop, and they kick everybody’s butt.”

Small-store advocates know they face a tough fight, and Yassky and Brewer said they are consulting with a broad coalition. Their zoning proposal is likely to add an overlay to existing requirements, limiting the types of stores in a small area to non-chains or owner-occupied stores.

“We’re not trying to take whole neighborhoods, but carve out at least some space on commercial strips for mom-and-pop chains,” said Yassky.

Another component of the Yassky/Brewer proposal might well be a lower tax rate for owner-occupied small businesses, to help address the issue that owners can earn more by renting out their retail spaces to cell phone or bank outlets than by running their own stores. Since this move would not help mom-and-pops that merely rent, Brewer said the tax incentives may also be expanded to owners who rent to mom-and-pop stores.

For Brewer, who lives on the Upper West Side, aiding mom-and-pop stores took on urgency when she began counting bank branches and cell phone stores in her district four years ago. Her list now totals 61.

Meanwhile, Bohne, a neophyte to business when she took over the Community Bookstore in 2001, has inspired such loyalty that locals have stepped up as advisors and
investors to offset recent financial troubles.

On a recent rainy evening, she sold a children’s book to a young family at her store, joking about Mary Poppins as a Mozart sonata played on the stereo.

With Ken Freeman, president of the Park Slope Civic Council, Bohne is developing concepts to help small businesses compete. One idea is to create an urban conservancy akin to the nature conservancy, to buy commercial property and receive a tax deduction for renting the space to mom-and-pop stores.

“I’m not saying anything should be done that’s unfair to anybody, but … there should be some sort of incentive from the city if you’ve stayed a long time and can demonstrate a benefit to the community,” Bohne said.

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