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The entry of Wal-Mart into New York City is the biggest
challenge to neighborhood businesses and local communities
in our city’s history. We have seen Wal-Mart’s impact all
over the country. Where Wal-Mart builds, downtown business
districts erode and often die. The loss of small business
is the first step in the decline of neighborhoods and the
loss of local identity.
It must be pointed out that the past
four years have not been kind to neighborhood retailers. On
the heels of the devastation of 9/11, real estate taxes have
been raised with impunity leading to intolerable rent
increases. Sales taxes have also been raised along with
garbage rates and cigarette levies. On top of all of this
the city has increased its exploitive enforcement policies
in order to balance its out-of-whack budget.
Now, in the face of the worst climate
for small business in over two decades, some city
policymakers want to encourage the proliferation of box
stores like Wal-Mart in New York. We cannot simply sit by
and let them do this. We must mobilize our resources, join
with our allies in the labor and religious communities and
activate the largest, most diverse coalition this city has
ever seen.
The immediate threat is on Staten
Island where two sites have been identified by Wal-Mart. All
of us need to understand that, even if we have no interest
in Staten Island, these developments are a threat to each of
us. If Wal-Mart gets a foothold anywhere in this city it
will make it that much easier for the company to build in
areas that might be a lot closer to your own stores or
businesses. We need to be united: a threat to one community
is a threat to all of us.
> Wal-Mart
Gretchen Dykstra, the outgoing chairwoman of the
Department of Consumer Affairs, has been trying to expand
the enforcement authority of her agency for the past three
years. In her first effort, the state legislature refused
to act on her bid to gain docketing authority for DCA. This
authority, if granted, would have, in our view, given the
Department the ability to act as both judge and jury in
enforcement actions against neighborhood retailers.
Undaunted, Commissioner Dykstra
convinced Mayor Bloomberg to include the same measure as
part of his 2003 Charter Revision package. Question 5, as
it was called, was editorially opposed by the New York
Times, the New York Post, and the New York Sun
and, more importantly, by the voters of New York city who
rejected the entire Charter package by a 70-30 margin.
Have circumstances changed so radically
that Intro 390, the current version of the DCA power grab,
becomes compelling? We certainly don’t think so and, we
would argue that, if anything, the changing circumstances
have made the case for the expansion of enforcement
authority ever less palatable than it was when first
introduced in 2002.
There is a need to thoroughly overhaul
the current enforcement and adjudication process. If we are
to truly become, in the mayor’s words, the “Opportunity
Society,” then enhancing the business climate for the
smallest and most vulnerable neighborhood retailers should
be the city’s goal. As long as an arbitrary and punitive
regulatory structure is maintained, however, the opportunity
slogans will remain empty rhetoric.
> Abuse of Fines and Stopping Intro 390
The twenty three mostly minority food
wholesalers in the Bronx Terminal Market have been targeted
for extinction by New York City’s Economic Development
Corporation in order to make way for the redevelopment of
the market by The Related Companies. It is understood that
the new development, approximately 1,000,000 sq. ft of
retail space, will be utilized for big box stores and other
upscale retail uses.
The city’s response to the plight of
the Terminal Market businesses has been nothing short of
outrageous. These firms, with aggregate gross sales of over
$300 million a year, have been offered a financial
settlement that is inadequate to compensate for the loss of
their livelihoods. At the same time, the so-called
settlement package fails to address the need to relocate the
23 businesses together, not as individual entities, but as
an aggregate market.
The strong possibility exists that the
Related Companies will try to develop the market site with
one or more big box stores. Over the past few years its
development schema has revolved around the big box concept
and this is unlikely to change, even though Related’s bids
to build two Costco stores in Manhattan and a BJ’s on Brush
Avenue in the Bronx were defeated through the efforts of the
Neighborhood Retail Alliance and the United Food and
Commercial Workers Union.
The Neighborhood Retail Alliance is
committed to stopping small business-destroying, anti-union
box stores. We are calling on the City Council to
investigate the blatant favoritism for Related and we are
asking the city’s Department of Investigation to open an
official inquiry into the relationship between Deputy Mayor
Doctoroff and Related. We are worried about the loss of an
important supply line for neighborhood retailers, and we are
especially concerned with the building of box stores that
will further erode the viability of neighborhood shopping
areas and those stores that are vital to the success of
local communities.
> Bronx Terminal Market
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On September 15, 2003 the maximum rate
for charging city retailers for their garbage collection
rose dramatically. The new rate, now based on weight rather
than volume, will effectively raise the collection cost from
the current $12.20 per cubic yard to a rate that is
equivalent to over $40 a cubic yard. This potential
tripling of carting costs comes on the heels of a post-9/11
recession that has had a devastating impact on neighborhood
retailers.
This bleak economic climate is one of
the primary reasons for the introduction of Intro 407, a
bill that would legalize the use of commercial food waste
disposers. The garbage rate hike would hit hardest those
food retailers who generate wet, organic waste. The use of
disposers would mitigate the rate hike by allowing stores to
grind the heavier garbage for disposal through the city’s
sewer and waste water treatment infrastructure. It
would also help decrease truck traffic - and its attendant
asthma-causing emissions, reduce the enormous rat
population, and decrease the need to build new transfer
stations.
> Legalization of Garbage Grinders
The New York City Newsstand Operators
Association, supported by the Neighborhood Retail Alliance,
has filed suit against the City of New York, the Department
of Transportation (DOT) and the Department of Consumer
Affairs (DCA). The purpose of the suit is to stop the
implementation of Local Law 64, the so-called street
furniture bill, because the law will force the relocation of
more than 60 newsstands in New York City, approximately 22%
of the remaining stands. An expert survey shows that as many
as 37 newsstands will be put out of business in Manhattan
immediately by the new law.
In addition the law deprives these
newsdealers, without compensation, of their long term
investment in the improvement of their stands and, by doing
so, violates their Constitutionally- guaranteed property
rights. Furthermore, the law will invite the suppression of
dissenting views by giving city bureaucrats sole discretion
to pull newsstand licenses.
Intro 430, a bill that would repeal the
city’s street furniture bill, sponsored by Councilman
Councilman Hiram Monseratte and also cosponsored by nine
other council members, is designed to protect the
livelihoods of these more than 60 newsstands. The
Dealers are hopeful that, based on this very clear evidence
of harm, the Council and the Mayor will develop a compromise
plan that, while fairly compensating the city, keeps all the
newsstands open and in the hands of the hardworking
newsstand dealers who are now operating them.
> Protecting Newsstand
Operators
Twelve years ago the Neighborhood
Retail Alliance was established to act as an umbrella
organization to wage a fight against a City Planning
Department proposal to rezone manufacturing land for
megastore development. The goal was to create a citywide,
broad-based coalition of small business and civic groups to
defeat the proposal. Our major emphasis was on the danger
that the plan posed for the New York City’s small and
mid-sized retailer and the threat that large scale
commercial development posed for neighborhood stability.
The defeat of the plan,
just as we envisioned it twelve years ago, could only have
been accomplished by activating a grassroots effort that
influenced individual council members through local
pressure. In the end, over 104 merchant groups and close to
75 different civic organizations lent their support to this
grassroots campaign.
A major boost to our own
efforts were the battles over specific megastore projects in
communities like Astoria, Maspeth, Laurelton, College Point,
Sunset Park and Ozone Park. We were able to generate
intense opposition to the overall rezoning plan because the
dangers of unregulated development were dramatically brought
home to many local communities when a particular megastore
was proposed for their own area.
In spite of all the hard
work, the public relations success, and the grassroots
lobbying, the final outcome was certainly not a foregone
conclusion. The pressure for the passage of the plan,
coming from powerful groups like New York City's real estate
lobby, was intense and included the considerable resources
of a strong and popular mayor. The City Council,
accustomed to compromise, was looking for any way to avoid
an outright rejection of the Mayor’s proposal.
Our lobbying effort,
however, narrowed the parameters of an acceptable
compromise. The issue of community oversight and review
became a non-negotiable issue – up to a point. The problem
was that the Council’s willingness to bend did not reach a
level that was acceptable to the Mayor. In this process,
exacerbated by the land use time clock running down, the
personalities of the Mayor and some of his key people
finally made it impossible to negotiate a compromise. As a
result, an extraordinary political victory for New York
City’s neighborhood retailers and the communities they serve
was achieved.
> Defeat of Giuliani's Megastore Plan
In an outcome that few would have
predicted, the application to build a BJ’s Warehouse Club on
Brush Avenue in the Bronx was sent to a resounding 13-0
defeat by the City Council’s Land Use Committee on
February 10, 2005. The negative vote was seen by many veteran
observers of the land use review process as unprecedented,
since BJ’s had seen its application approved by the local
area community board, the Bronx Borough President and the
City Planning Commission before it went down to defeat at
the Council. In addition, the BJ’s project had been
strongly supported by Councilmember Madeline Provenzano who
represents the community directly impacted.
What the defeat of BJ’s signals, however, is the greater
degree of oversight and scrutiny that all box store
applications, will receive when they are sent to the City
Council for disposition. It was the announcement that
Wal-Mart was setting its sights on New York City that
generated a higher level of interest and concern in the BJ’s
project, since the company’s business model and average
footprint are built on the Wal-Mart example.
The failure of the City Planning Commission to require a
through review of the BJ’s impact was seen by project
opponents as setting an unacceptably low standard as well as
an unacceptable precedent for the anticipated Wal-Mart
applications. Their belief was that box stores
represent a significantly new economic phenomenon that
requires intense scrutiny and, perhaps also, even higher
barriers to entry than those that are now customary in the
current land use process.
In addition, the City Council, perhaps as a harbinger of
things to come, had serious issues with the labor policies
that both BJ’s and Wal-Mart practice. A great many
council members felt that these abysmal labor records should
also be factored in when a land use application is
submitted. The prevalent belief was that an
application for a zoning permit was a request for special
dispensation from municipal government and, as such, was not
only purely discretionary but also should be reviewed with
the overall quality of these applicants in mind.
> Defeat of BJs in
the Bronx
The proposed Intro 621, comes amid an
already unfavorable small business environment. The
increased commercial real estate tax has raised retail rents
by thousands of dollars per store. Garbage rates, regulated
by the city, have been allowed to double and triple and the
cigarette tax, which we have labeled the bodega tax, was
legislated from 8 cents a pack to $1.50, an 1800% increase
that was the largest tax increase in the city’s history. The
result: an unprecedented $250 million income transfer from
bodegas, green grocers and newsstands, to the city and state
treasuries. In addition, city regulators have gone on
an enforcement rampage doubling and tripling fines while
reducing access to due process.
The largest largest flaw with Intro 621
is conceptual: Why would the City Council even consider the
expansion of vending, an activity that, in spite of its many
hardworking practitioners, creates an unfair competitive
environment for beleaguered neighborhood store owners?
More specifically, the bill would remove the current zoning
restrictions that limit vendor activity from certain areas.
Areas that were free from vendors will now be fair game. In
addition, probably in recognition of the results of the
removal of the current restrictions, the bill proposes a 55%
increase in the number of vendor licenses. With these
signals everyone should be aware that, along with the
proliferation of legal vendors, will be a similar profusion
of additional illegal vendors as well.
We also believe that enforcing of this bill would be
impossible. Already under the current system,
enforcement is lacking due to scare police resources and
this problem would only become worse if vendors were allowed
to set up on previously restricted streets. Not only
would vendors now be allowed to crowd city sidewalks, but
when they broke the law their fines would would be
dramatically lower than those applied to the legitimate
store owners who are paying those higher real estate taxes
to help keep municipal government solvent.
In addition, because of state law, food vendors are
basically unregulated and often are able to compete directly
and unfairly with local food stores. On long stretches along
Broadway on the Upper West Side vendors selling fruits and
vegetables have, owing to the overhead and regulatory
differentials, made it impossible for fruit store owners to
stay in business. What kind of message does this send?
Given all of these problems, the City Council should scrap
this legislation and convene a small business task force
that would take a look at this problem with proper input.
> Unneeded
Expansion of Vendors (Intro 621)
The passage of a confiscatory cigarette
tax by the Bloomberg Administration in 2002, the largest
percentage increase in city history, has led to a 60% drop
in sales at New York’s bodegas, green grocers, delis and
newsstands. This loss, estimated at $250 million a year,
has generated brisk black market street sales in every
low-income city neighborhood.
The Bloomberg bodega tax, when coupled
with a large state tax increase, has had an additional
consequence. Over half of all sales statewide have now gone
to Native American retailers who have been able to avoid charging
taxes on both cigarettes and gasoline because Governor
Pataki has, until now, refused to enforce the law.
Convenience store analysts estimate
that the state is losing up to $1 billion a year as a result
of the state’s enforcement laxity. This is a revenue stream
that could easily be tapped to address equity issues around
school financing. At the same time, enforcing the law will
also serve to bring sales of tobacco products back to the
legitimate stores where they belong.
When Mayor Bloomberg passed the tobacco
levy in 2002 store owners predicted that it would lead to
dramatic sales losses and an uncontrollable black market.
Six months after its passage, store owners held a press
conference to lament the economic harm done by the loss of
revenue caused by the tax. Bloomberg’s response: “It’s a
minor economic issue.” So when a tax on stock transactions
is proposed everyone screams about its devastating economic
impact. When vulnerable bodegas are targeted, however, the
mayor doesn’t even bother to express sympathy even after the
negative consequences of the tax are demonstrated.
Now the Mayor and the Governor are
proposing an additional increase in the tax without first
addressing the illegal sales fueled by non-taxed Native
American cigarettes. We will be pressing city and
state legislators not to green light this increase until the
Governor enforces the law and collects the tax from Indian
establishments. Otherwise, all this higher levy will
accomplish is to further injure tax-paying mom and pop
stores while failing to lower the number of smokers, the
supposed goal of this proposal.
> The
Cigarette Tax ("Bodega Tax")
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