Manhattan Small Business Owners Say Commercial Real Estate Tax Cut Will Be Lifeline
NEW YORK (CBSNewYork) -- A long battle to save local mom and pop shops has ended in victory.
As CBS2 Political Reporter Marcia Kramer reported, Mayor Bill de Blasio and the City Council have struck a deal to reduce the commercial real estate tax for small businesses.
"Life-savin," said Imsil Lim, owner of Vanity Fair French Cleaners & Tailors, "because we all work very hard, you know, but everything was so high that we might not be able to make it."
Lim's cleaners is located at 27th Street and Third Avenue in Kips Bay. She said the news that the mayor and the City Council have agreed to reform and reduce the commercial rent tax is a lifeline that could help her and thousands of other neighborhood stores keep their doors open.
Now, they will not have to pay something that is like a sales tax on a business' rent.
"If the taxes go down a little bit, it will help us out – surviving," Lim said.
What the tax reform bill aims to do is to end the proliferation of vacant storefronts with "for rent" signs.
In a quick survey, CBS2 found a dozen empty storefronts on a 10-block stretch of Third Avenue between 61st and 71st streets on the Upper East Side. More and more mom and pop stores are being forced out by the high cost of doing business.
"This is not going to be a gift to the big banks or drugstores or coffee shops that have a million locations," said City Councilman Dan Garodnick (D-4th). "This is for the community-based organizations and commercial businesses that really are struggling."
The commercial rent tax affects Manhattan businesses that are located below 96th Street and above Chambers Street, whose rent is above $250,000 a year.
The new bill will raise the rent threshold to $500,000. About 1,800 businesses will now pay no tax – saving about $13,000 – while 900 more will see a reduction of $11,300.
"We'd be able to (put) more money towards the business and also hire more people," said Charles Ward, manager of Whitman & Bloom in Kips Bay.
The Mayor's office said it is also trying to help small businesses in the outer boroughs by reducing fines against small businesses by 40 percent, providing free consultations to help them comply with health and safety rules, and a "love your local" initiative to help small businesses get grants of up to $90,000.
"It might give somebody a leg up to hold onto their business longer," Ward said.
The bill is expected to pass the City Council on Thursday and to be signed by the mayor. It will take effect July 1 – the start of the next fiscal year.