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Controversy Continues As Three File Minority Report:Commercial Rent Panel Makes Final ReportMY HUB TAYLORThe 15-member Mayor%u2019s Commission onSmall Retail Business released its finalreport June 4, and concluded that commercial rent pressures %u201care not imperilling theoverall prosperity of the city%u2019s retail sector%u201dand have not %u201cled to reductions in the varietyand accessibility of services available to consumers.%u201dAt the same time, three members of thecommission strongly disagreed with theseconclusions and issued a dissenting reportand accused the majority report of focusing%u201con a defense of the free market system instead of the crisis faced by manyneighborhoods and an increasing number ofmerchants.%u201dThe two reports, both roughly 100 pageslong, were issued nearly 13 months after thepanel was appointed by Mayor Ed Koch toexamine the rent problems faced by smallbusinesses. The commission was establishedduring the mayoral election year, followingtremendous pressure to protect the smallretail and service-oriented businesses oncommunity shopping streets from dramaticrent increases and displacement.The commission stirred controversy fromthe very beginning. Advocates of commercialrent control claimed that the composition ofthe panel was weighted in favor of real estateand corporate interests and away from theconcerns of small business operators. Thecommission was also criticized for the longdelay in issuing its final report until the CityCouncil went on vacation and for being unwilling to permit observers into its deliberations and hearings.In addition to the chairman, AlanAltshuler, dean of New York University%u2019sGraduate School of Public Administration,the panel included business people and community leaders from brokerage firms, banks,department stores and business organizations. Brooklyn was represented by two panelmembers: Elwin Larson, president ofBrooklyn Union Gas Co., and Ronald Shiftman, director of Pratt Institute%u2019s Center forCommunity and Environmental Development. Shiftman was one of the three architects of the minority report.BASED ON HARRIS SURVEYBoth final reports based their conclusionsand recommendations on data drawn from asurvey conducted by Louis Harris andAssociates. The survey was administered toretail merchants and consumers in 12neighborhoods throughout the city andstudied commercial rent, income and retailsales patterns in each of them. ThreeBrooklyn communities were included: Carroll Gardens, Bay Ridge and Brownsville.The survey found a variety of rents, profitsand consumer habits throughout the city.In analyzing businesses that had been inplace for more than two years, the studyfound a 32 percent median rent increase forthe period. But, Carroll Gardens, one of thethree neighborhoods that exceeded this rate,was found to have experienced a 62 percentincrease. However, the neighborhood had oneof the lowest merchant turnovers in the sametwo year period.Merchants were also asked what problemthey felt was the most serious. Rent wasmentioned most frequently by 28 percent ofthe respondents. Ten percent of the CarrollGardens merchants, where the median rentper square foot is $7.12, ranked rent as themain problem, compared to 34 percent inBay Ridge.As a percentage of sales volume,neighborhood merchants reported that theyspent approximately 12 percent of their grossrevenue on rent, while earning 25 percent inprofits. In Carroll Gardens, an average of suepercent of sales volume is devoted to rent and16 percent to profit.EXPLORED TURNOVER PROBLEMMerchant turnover was another majorissue explored. Overall, 66 percent of themerchants throughout the city had been attheir locations for more than five years.Some 65 percent of the Carroll Gardensbusinesses had been at their current locations in the same period.Consumers were questioned about their accessiblity to and perception of the variety andprices of goods and services, and their reactions to new businesses opening in their%u2014 i-----1~u v t g u u v i U W U O .Roughly 90 percent of the weekly shopperssaid they purchased all their goods in theirneighborhoods. In Carroll Gardens, 94 percent said they used local dry cleaners, 88 percent used local hardware stores and 86 percent used local stationary stores. But,residents of Carroll Gardens were more likely to seek out a restaurant outside their community than any other neighborhood residentin the survey; 54 percent said they usuallywent elsewhere.When asked how retail turnover had affected the variety of retail products in theirneighborhoods, 44 percent said they saw nochange, 34 percent perceived improvementand 13 percent said there was a reduction.Following the survey, the commissionfocused on six policy options. Two options,non-intervention and rent control were notendorsed in either the majority or the dissenting reports. Two of the options, lease extention and supply expansion, were recommended by the majority and the two remaining options were embraced by the dissenting group.EXTENSION WITH INCREASEThe lease-extension option suggested wouldrequire non-binding mediation in cases of alandlord-tenant dispute over lease renewal.If the negotiations fail, the tenant would beentitled to a one-year lease extension with aSome Reactions to the Findings:15 percent rent increase.The supply expansion option is a rezoningpolicy that would seek to convert vacantspace to retail use. In the report, the commission said it had %u201cnot had time to explore all ofthe potential elements of a supply expansionstrategy in detail%u201d but it does recommendsuch actions as the conversion of secondstory space to retail use and the continuationof the city%u2019s Industrial and Commercial Incentive Tax Program for commercial spacerenovation.The minority report concentrated on moreinterventionary policies. The dissentingFollowing the release of the Small RetailBusiness Study Commission%u2019s majority anddissenting reports, retail merchants associations and commission members began voicing their concerns about the conclusionsdrawn from the information compiled byLouis Harris and Associates.In Brooklyn, one of the most vocalorganizations has been the Save Our ShopsCoalition for Small Business Preservation.The group issued a statement that called themajority report %u201cpredictable.%u201d%u201cObviously you can%u2019t expect progressiveideas to come from a committee that wasweighted in favor of the establishment,%u201d saidPam Miller, the coalition%u2019s chairperson.Miller thought the committee should havebeen structured like the former New YorkState Small Business Advisory Commission,a panel that earlier proposed a commercialrent control policy. Unlike the mayor%u2019s panel,%u201cwhich had three representatives from smallbusiness, the state commission had nine,%u201d according to Miller.Ronald Shiftman, the director of Pratt Institute%u2019s Center for Community and Environmental Development and a member ofthe dissenting group who wrote the minorityreport, said, %u201cThere is a problem with smallmerchants. In Brooklyn, we have the highestnumber of small businesses with leases upfor renewal in the next two years. The majority report had so much language orientedto a free market operation that it read like areport from the State Real Estate Board,%u201d hesaid.%u201cThe minority felt very strongly that somedegree of involvement had to come from thecity. We also thought there was real need fornon-profits and small businesses with ahistory of contributions to the community toreceive some special considerations for therole they play,%u201d added Shiffman, who accused the commission of being neither impartialThere is a problem withsmall merchants. In Brooklyn, wehave the highest number of smallbusinesses with leases up forrenewal in the next two years.nor serious in the work it was doing.As far as the reports%u2019 proposals were concerned, Miller said they did not do anythingto help the situation. %u201cIf you change the zoning to allow second story retailing, you evictthe people renting that space,%u201d she said.%u201cStudies have also proven that businessdrops off by one-third when you move it to thesecond floor or to a side-street location,%u201d shesaid. Miller advocates a lease-extension program like the one proposed in the minorityreport.%u2014R.T.Coming next week, the views ofBrooklyn retailers and community activists about the conclusions drawn by therepors and how they feel their businessesand their neighborhoods will be affected.group opinion said that the majority reportwas not taking a complete look at thestatistics compiled by Harris and Associatesand cited the 38 percent of the city%u2019s merchants who think rent is the most serious problem faced by their business as an issue thatneeds to be solved.WANT MORATORIUM ON EVICTIONSThe minority report called for an immediate moratorium on evictions due to afailure to renegotiate a lease, and a one-yearextension of leases for retail renters until thecity council has been able to work out a solution to the commercial rent problem.The report called for mandatory negotiation and binding arbitration as an %u201ceffectivemiddle-ground between mediation alone anda comprehensive system of rent control.%u201dThe dissenting opinion also proposed that theCity consider requiring landlords to notify alltenants of any intent to sell a building andgive the tenant a first option to purchase theproperty at fair market price.Aii addendum was added to the majorityreport that said it wanted %u201cto make known itsdisapproval of the dissenting group%u2019s proposals.%u201d The majority report said that %u201cthosewho urge a moratorium are also advocates ofrent stabilization or binding arbitrationlegislation for the long term.%u201d It added thatthe minority report %u201crelies in part on feveredrhetoric, on an unfounded attack on the Commission%u2019s procedures, and on the use ofnever-defined but emotion-laden terms suchas %u2018inequity%u2019, %u2018abuse%u2019, and %u2018rent-gouging%u2019.%u201dEach of the options suggested by bothreports would require legislation by the CityCouncil and State Legislature to put them into effect.Pay Homage to Walt Whitman in Birth AnniversaryEvent at Brooklyn Historical Society; Exhibit to ComeBY LIZ KOCHTwo roses, a spray of baby%u2019s breath and astanza of poetry were laid beneath the sign atthe Brooklyn Historical Society last week tohonor the anniversary of the birthday ofBrooklyn%u2019s most famous poet, Walt Whitman. With a small cluster of society staff onhand, the bouquet was laid in its place bystaff member Bob Hawkins who decided toBrooklyn Historical Society staffer Bob Hawkins and poetry therapist Linda Meisler,already at work on next year's centennial salute to Walt W hitm an, organized a birthdaytribute to the poet on June 3. Here they display a copy of his %u201cCrossing Brooklyn Bridge.%u201dInset is a copy of a rare edition of his Leaves of Grass.\begin a yearly tradition honoring the formereditor of the Brooklyn Eagle.%u201cThis is the first year we decided to honorWalt Whitman. He is Brooklyn%u2019s mostfamous writer,%u201d Hawkins explained at theshort ceremony on June 3. He pointed outthat although the poet was bom in LongIsland, he moved to Brooklyn beforereaching his fifth birthday and had his firstedition of work, the 1855 edition of %u201cLeaves ofGrass,%u201d typeset by a printer on CranberryStreet.%u201cThis ceremony is a prelude to a biggerWalt Whitman celebration, we will be holdingalready next year,%u201d Hawkins said. He wasjoined by poetry therapist Linda Meisler whois working with him on next year%u2019s festivities.%u201cWhitman was a poet of the people andnext year we hope to bring his poetry to theelderly, to children, to the common person,%u201dhe said.The event had originally been scheduledfor May 30 at the Fulton Ferry Landing onthe East River, but was postponed to June 3because of the threat of rain.The historical society also gatheredtogether a collection of books in honor ofWhitman, who was bom in 1819, including an1860 edition of %u201cLeaves of Grass.%u201d As part ofits ongoing tribute to the poet, among whoseworks included %u201cCrossing Brooklyn Ferry,%u201dthe society hopes to restore a print copy of theBrooklyn Eagle edited by Walt Whitman,currently in storage. In addition, the societyalso has a rare extended 1856 edition of%u201cLeaves of Grass,%u201d in their vault.The bouquet of flowers wrapped with a redribbon lying on the sidewalk did not catch thePVP o f m n n v n n c c p rc K v nn tk o o *ro o{ T h Ascrap of paper attached with words to his%u201cCrossing Brooklyn Ferry%u201d poem lay thereon the street for anyone passing along toread, particularly appropriate perhaps, forthe poet of the common man.%u2014L.K.June 12, 1986, THE P H O E N IX , Page 5