Category Archives: Government

Citywide Business Coalition Unites Against Paid Sick Time Bill

Irene LoRe, executive director of the 5th Avenue BID, and Carl Hum, president of the Brooklyn Chamber of Commerce after the City Hall press conference.

Small business owners from across the five boroughs of New York City, chambers of commerce, non-profit organizations, trade associations and more gathered on the steps of City Hall to speak out against the New York City Council’s proposed Paid Sick Time bill (Intro No 1059). The group, representing an unprecedented and diverse coalition, says the bill will hurt the city’s economy and local businesses.

“While Intro No 1059 is well-intentioned, its impact, both short and long term, will be damaging to the business community to the tune of about two to three billion dollars in new costs. Our business and non-profit communities are trying to weather current economic challenges, maintain current levels and look toward future growth through job creation, yet they are being asked to shoulder this latest burden,” said Jack Freidman, Queens Chamber of Commerce. “How can the City’s business community compete when they are at such a disadvantage?” he added.

“Our printing company has 32 full-time employees. We currently offer six paid sick days and forcing us to offer nine paid sick days will cost our business another $30,000 per year and that will be a burden on our company which is challenged by this current economy. I will have to cut down on their vacation time to cover these costs,” states KY Chow, GM Printing in Long Island City. In addition, other businesses have indicated that they will scale back on other benefits as well as reconsider new hires and expansion plans. Continue reading

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Commercial Real Estate Distress Far From Over, Survey Shows

With high unemployment pushing up vacancies, no credit capacity, and property values plummeting, commercial real estate markets remain extremely stressed with little prospect for significant near-term improvement, according to The Real Estate Roundtable’s latest quarterly survey of senior commercial real estate executives.

All three indices tracked by the “Sentiment Survey” have risen considerably since the near-collapse of financial markets last fall–a reflection of respondents’ collective sense of relief at having survived the worst of the turmoil, and the extreme uncertainty and paralysis of last year giving way to a greater sense of acceptance of market realities. However, the latest numbers–particularly the “Current Conditions” reading of 56–remain well below the ideal 100.  An overall index of 100 means all survey respondents have answered that conditions today are “much better” than they were a year ago, and will be “much better” 12 months from now.

“The problems now are more clearly defined and there’s a grim sense of reality setting in, but that’s a long way from saying markets are stabilizing or that conditions are on the mend,” said Roundtable President and CEO Jeffrey DeBoer. “With job losses mounting, consumer confidence in the doldrums, and a relapse of the recession still possible, additional policy action is needed to restore credit availability–the lubricant of the economy and job creation–and to address the equity shortage resulting from falling commercial property values,” DeBoer continued.

An overwhelming majority of the 100+ respondents in the Q4 survey said property values are down today vs. a year ago, although the percentage declined to 77 percent from 93 percent in the previous quarter. But respondents were far from optimistic about future valuations, with 71 percent saying they expect values to remain “about the same” or to erode even further in the next 12 months.

“So-called “zombie buildings” and empty storefronts on Main Street will only mean bigger budget shortfalls for local governments, more layoffs for construction, hotel and retail workers, and further devaluation of investment portfolios held by individual and institutional investors,” DeBoer added. Continue reading

Anti-Business Party Wins City Elections

As if the commercial real estate industry in New York City doesn’t have enough to worry about, the Working Families Party, which launched a major campaign last spring in Albany to push for stronger rent laws, claimed major victories in the September 15 Democratic primary and September 29 runoff.

 A March 10, 2009, press release on the WFP Web site said repealing vacancy decontrol was a top priority. The measure died last spring, but Dan Cantor, executive director of the WFP, promised on the night of the runoff to revive the issue. 

John Liu, who was supported by the WFP, won the Democratic runoff for New York City Comptroller with a little more than 26,000 votes. Around 228,000 New Yorkers voted in the runoff, with about 127,000 voting for Liu and 101,000 voting for David Yassky.

The WFP Web site boasted that Liu and Bill DeBlasio, the winner of the runoff for Public Advocate, were victorious because of the WFP’s coalition of neighborhood leaders, union members, tenant activists, advocates for the homeless, and just good old-fashioned civic-minded citizens.

Less than 8 percent of New York City’s voters voted in the runoff and the winning candidates were supported by a coalition that is anti-business, hostile to the real estate industry, and an advocate for tax increases. This at a time when the city is suffering from more than 10 percent unemployment and New Yorkers are desperate to find jobs. The  unions making up the core of the WFP haven’t suffered massive job losses experienced by those working in small businesses, retail, media, advertising, finance, real estate, nonprofits and other sectors.

As part of its anti-business agenda, the WFP is now advocating that the City Council force small businesses to provide paid sick time. The Five-Borough Chamber Alliance affirms its opposition to Intro. No. 1059, Provision of Paid Sick Time Earned by Employees, that will mandate businesses – regardless of size – to provide paid sick time.  Businesses with 10 or less employees will be required to provide five days of sick time to all employees and businesses with 10 or more employees will be required to provide nine days sick time for all employees.  Businesses found in violation will be subject to $1,000 fine for each infraction.

Ed Koch and David Yassky wrote about the WFP threat in the New York Daily News on October 7, 2009.  “..as ‘liberals with sanity’ we see danger when narrow agendas overwhelm the public good. That happened this spring when the WFP masterminded a whopping 9% increase in state spending in a year when the state’s economy is actually contracting. The spending was financed by a steep tax hike and in part by more than $6 billion in one-time-only federal stimulus money–which will leave a gaping budget hole for next year.

“Or a few years ago,” the article continued, “when the WFP pressured a majority of the City Council members to sign on to a proposal for a ‘stock transfer tax’ in New York City. Sticking it to Wall Street may sound good to a lot of people–all the more so now–but a moment’s thought should tell you that the idea would be ruinous for New York.”

“The problem is the WFP is driven not simply by ideology, but also by the very specific interests of its component parts–namely, the city’s largest labor unions. These organizations have a very direct financial stake in the state and city budgets, an interest that is often at odds with public interest.”

See the full article here:

http://www.nydailynews.com/opinions/2009/10/07/2009-10-07_the_working_families_threat.html

Times Reports Debt-Securitization Markets Still in Disarray

The New York Times reported today that even though the government funneled billions of dollars into major financial institutions after the financial crisis began last year, credit is still tight because the debt securitization markets aren’t functioning.

The article by Jenny Anderson explained that the securitization of corporate loans, home mortgages, commercial real estate, student loans, and others made up roughly 60 percent of the credit in the United States before the crisis, and that private investors abandoned them after the collapse of subprime mortgage market.  For example, securities backed by home loans fell from $744 billion in 2005 to $8 billion in the first six months of 2009.  

Experts quoted in the article said the securitization markets are critical to increasing bank lending and economic growth. Of particular concern are the “$50 billion of securitized commercial property loans due to be refinanced in the next year. If this can’t be done, a toxic mix of declining property prices and maturing loans could lead to fresh losses at many banks” Anderson wrote.  The government has used the Term Asset-Backed Securities Loan Facility (TALF) to encourage investment in these markets.

Access the article here http://www.nytimes.com/2009/10/07/business/economy/07shadow.html?emc=eta1

A Bit Better, but Very Far from Best

William Dudley, president and CEO of the New York Fed

William Dudley, President and CEO of the New York Fed

 

New York Fed President and CEO William C. Dudley said in a recent speech that the capitalization rate for commercial real estate has climbed sharply and income generated from real estate has been falling, resulting in “rollover risk” when commercial real estate loans and mortgages mature and need to be refinanced. He predicts more pain lies ahead for the sector.

Here’s the full text of his Oct 5, 2009 remarks at the Fordham Corporate Law Center Lecture, New York. Continue reading

Kings Highway BID Distributes Recession Survival Guide

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The Kings Highway BID presents Recession Survival Guides to businesses at the BID’s Annual meeting. Shown here left to right: Sidney Haimowitz, a property owner on Kings Highway and owner of Haimowitz Insurance; Phil Nuzzo, executive director of the Kings Highway BID; Nancy Herbst, vice president and branch manager for HSBC, Leon Fonfa, senior development manager for the New York City Department of Small Business Services; and Malcolm Newman, a Kings Highway property owner and president of the Kings Highway BID.

Did you know that the New York State Department of Labor has a layoff prevention program? Or that through the 2009 American Recovery and Reinvestment Act the SBA is offering short-term loans to businesses that need help making interest payments on qualifying debt? Or that the IRS has extended the carry back period for Net Operating Losses from two to five years?

The Kings Highway BID wants to make sure the businesses in its district know the answers to these questions and more. To reach that goal, it has created a Recession Survival Guide, a folder full of information about the federal, state, and local programs available to help businesses manage during the economic downturn. The first copies were distributed at the BID’s Annual Meeting, and the remainder will be distributed to businesses on Kings Highway in the coming weeks.

“We researched the recovery programs available and included in this folder information about those we thought would be most beneficial to the businesses in the BID,” said Phil Nuzzo, executive director of the Kings Highway BID. “We hope that the programs highlighted will enable businesses not only to survive the recession, but thrive on Kings Highway for many years to come.”

The following are examples of what the Recession Survival Guide includes:

More information about the Kings Highway BID is available at 718-645-1100.