BILL NUMBER: S1451
SPONSOR: KAVANAGH
 
TITLE OF BILL:
An act to amend the real property tax law, in relation to creating the
Neighborhood Small Business Rent Increase Exemption
 
PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this bill is to authorize the City of New York to enact a
local law providing for property tax abatements to property owners who
enter into long-term, affordable leases with their commercial retail
tenants.
 
SUMMARY OF PROVISIONS:
Section one of the bill titles the act "Neighborhood Small Business Rent
Increase Exemption."
Section two of the bill adds a new Title 7 to Article 4 of the real
property tax law, titled Tax Abatement for Limiting Rent Increases on
Neighborhood Small Businesses In a City of One Million or More Persons.
This new title allows for the City of New York to enact a local law in
which non-residential or mixed-use buildings which lease space to small
retail businesses employing 50 or fewer people shall receive an abate-
ment of real property taxes for up to ten years, calculated using the
small business tenant's percentage share of the building's total square
footage multiplied by a prescribed abatement base: the lesser of $2.50
of tax liability per square foot or 50 percent of the tax liability per
square foot. In no event shall the abatement exceed the tax liability to
the eligible business.
In exchange for a property tax abatement, the landlord must enter into a
ten year lease with a small business tenant and include within the lease
a tenant renewal clause that limits rent increases to no more than three
percent annually.
New York City's department of finance would administer any tax abatement
program enacted through such local law.
Section three of the bill sets forth the effective date.
 
JUSTIFICATION:
Small businesses are a critical part of the fabric of New York City's
neighborhoods. These shops provide the rich character and history New
Yorkers treasure, employ residents in their communities, and drive the
city's local economy. According to a report by the New York City Council
in December 2017, small businesses employ more than 600,000 individuals
and "retail diversity" the presence of a large number of goods and
services in a neighborhood - is connected to the health of both a commu-
nity's local economy and residents.
Despite the importance of small businesses to New York City, many are
going extinct. Rising rents and falling income - due, in part, to the
ever-growing threat of e-commerce giants and the presence of chain
retail stores - are pushing more and more local shops to close.
This legislation supports small businesses by authorizing the City of
New York to create a new tax abatement for landlords that enter into
long-term leases that include affordable rent increase clauses with
small businesses. The bill will incentivize New York City property
owners to keep small businesses in neighborhoods across the city.
 
PRIOR LEGISLATIVE HISTORY:
2024: S2962a (Kavanagh) - REPORTED AND COMMITTED TO FINANCE
2023: S2962A (Kavanagh) - REPORTED AND COMMITTED TO FINANCE
2022: S2957 (Kavanagh) - COMMITTED TO RULES consideration in real prop-
erty taxation
2021: S2957 (Kavanagh) - COMMITTED TO RULES/A2418 (Niou) held for
consideration in real property taxation
2020: S2298 (Kavanagh) - REFERRED TO CITIES/A7218(Niou)- referred to
real property taxation
2019: S2298 (Kavanagh) - REFERRED TO CITIES/A7218(Niou)- referred to
real property taxation
2018: S8748 (Kavanagh) - REFERRED TO CITIES
 
FISCAL IMPLICATIONS:
To be determined.
 
EFFECTIVE DATE:
This act shall take effect immediately.