This thoughtful article doesn't have all the answers to the mall-ification of NYC, but I think it has some good ideas and does a really great job pointing out the issues, and discussing some ideas that have been proposed to help small retail businesses thrive.
As manager of a couple properties with small retail businesses in their store fronts, I am pretty familiar with the struggles. The idea that banks won't finance new construction unless "credit tenants" (aka national retailers such as banks or drug stores or big brands) anchor the retail was news but not a surprise to me. Now we see why every time a new condo goes up, Starbucks goes in on the ground floor (not that I'm complaining, mind you!).
As for some of the solutions, well, I feel they cause additional issues. Mandatory 10 year leases aren't likely to work - because people who start small businesses have high failure rates and won't make it to 10 years in business. So then banks considering mortgages will discount the values of those 10 year mortgages.
Mandating one three-year extension at the outset of the initial lease might fly. But how does that do anything but pass the buck down the road, when retail rents have gone further up and the small business must somehow make an even bigger jump?
Mayor De Blasio made some noise last week about charging landlords who "keep their storefronts empty" waiting for tenants who will pay high rents. How does he decide on who is doing that? Is there a mandatory time frame? A specific asking rent that would trigger the charge? A combination of the two? Do they spend money every year indexing average asking rents in various neighborhoods? Obviously asking a Soho rent in the Bronx is unrealistic, but what's an outrageous Soho rent?
The idea of giving FAR bonuses to landlords who are going to include retail has legs. There are a lot of neighborhoods - mine included - where retail storefronts are in need. Whether it's a small or large business in that store front, we could use more stores! So why not allow any building on a large (perhaps defined as 4-lane, two way streets?) automatically have a commercial zoning for the ground floor, and allow the developer a bonus sq footage? It's likely to benefit the neighborhood better than the "plaza" bonuses, many of which plazas remain shuttered to the public even after heavy coverage from a few years ago.
Another option mentioned was the implementation of restrictions of proximity for ubiquitous businesses such as banks in certain areas. I grew up in a small town in Northern Virginia that had such an ordinance - against fast food restaurants. They couldn't be less than 500 feet from each other. So when Taco Bell wanted open up about 400 feet from the existing McDonalds - well, that was a fight (that resulted in a variance allowing Taco Bell to open, although the McDonalds eventually relocated further away and a carpet store took over its old space.). But overall I think it did do something for our little town. So, as then-Councilwoman Brewer said, "it's one tool in the toolbox."
I would like to see a bit more self-policing from landlords - especially long time landlords who have substantial equity in their properties and aren't faced with a refinance every few years. Have 3 storefronts? Try to get or preserve a small business in one of them. Lobby for tax breaks for long term tenancies of small (fewer than 3 locations) businesses. I'll point out that since landlords with commercial spaces must submit Real Property Income & Expense statements annually to the city - disclosing rent rolls and income - their property taxes are already determined based on existing income, so lower rents *should* result in lower property taxes. In other words, if your property isn't beholden to a mortgage bank, then you can afford a slightly lower retail rent.
Ultimately, it's going to take agreement among many stakeholders to achieve a new equilibrium that saves NYC from going suburban.
Saving small businesses in New York: what are the solutions? - Curbed NY:
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