California bill to empower bar & restaurant owners in lease renegotiations is dead

Senate Bill 939 would have allowed commercial tenants to renegotiate leases after losses

Scott Wiener, Lena Gonzalez
Scott Wiener, Lena Gonzalez

A proposed state bill to give commercial tenants a slew of powerful tools in lease negotiations was shot down this week, even after its authors dialed it back.

The latest version of Senate Bill 939, which largely would have benefited bar, cafe and restaurant owners, was voted down by the California State Senate’s appropriations committee, according to Commercial Observer.

The bill would have allowed tenants to trigger lease renegotiations if they lost more than 40 percent of their revenue or were forced to operate at 25 percent reduced capacity. It also would have created a statewide commercial eviction moratorium through the coronavirus state of emergency.

Earlier versions of the bill had a longer moratorium term and would have allowed tenants to break leases during renegotiations if an agreement wasn’t reached within 30 days.

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Those provisions would only apply to businesses and nonprofit organizations with fewer than 500 employees. State senators Scott Wiener and Lena Gonzalez wrote the bill. Wiener is known for pushing several pro-development bills designed to address the statewide housing crisis.

They released a statement on the SB-939 vote, saying that “California faces the very real prospect of a mass extinction event for small businesses and nonprofits.”

The state has already instituted an eviction moratorium through the state of emergency, but it is subject to the discretion of the governor and California’s Judicial Council.

Housing advocates and academics have warned of a wave of residential evictions in particular once the state and local moratoriums are lifted. One UCLA study suggests that as many as 365,000 residential evictions could come after the moratorium expires. [Commercial Observer]Dennis Lynch