Bill Seeks to Make Mom-and-Pops Viable Again

For years, co-op and condo boards regarded commercial space in their buildings as a blessing – source of vital income that helped balance the budget and boost the value of apartments. But with the rise of online shopping and the resulting decline of brick-and-mortar retail, an old blessing has become a new curse. Many boards find themselves scrambling to lease their retail space – by lowering rents, accepting once-undesirable businesses, agreeing to long-term leases with outside investors, or even selling their once-sacrosanct commercial space. The New York Post reports a recent “epidemic” of retailers begging for rent reductions. 

Now the city’s beleaguered retailers might be getting relief from an unexpected source. City council member Robert Cornegy, who represents Bedford-Stuyvesant and Crown Heights, tells The Real Deal he plans to introduce legislation by the end of the year that would offer developers incentives like tax breaks and additional development rights if they agree to give retailers space in their projects at below-market rents. The goal would be to make it easier for smaller stores to find space and stay open in the city. 

“Long term, mom-and-pops can’t afford to stay, no matter what services they provide,” Cornegy says, “so we’re asking for developers not to look at what the current rate or forecasted market rate is, but do below that.” 

Cornegy stresses that the city already has similar standards in place for affordable residential units. He specifically cites New York’s FRESH Program as a good point of comparison, which offers companies tax reductions and zoning incentives if they build a grocery store with their projects in areas considered underserved. 

Juan Barahona, principal of SMJ Development, says that in the current retail climate, it may make more sense for landlords, including co-op and condo boards, to at least occasionally target smaller local stores instead of large national chains. 

“For developers and landlords to just always presume that we’re going to land a big credit tenant and that the music is just going to keep playing, I think it’s a little naïve,” he says.