PRESS INQUIRIES
Katy Feinberg
[email protected]
Today, the Partnership for New York City submitted the following testimony to the New York City Council Committee on Small Business.
Testimony as prepared for Kathryn Wylde, President and CEO of the Partnership for New York City.
There is no question that the resurgence of COVID-19 has greatly increased the challenges for the recovery of small business, particularly in the hospitality, retail and local services sectors. In July, the Partnership for New York City issued a report (A Call for Action and Collaboration) that projected as many as a third of New York City’s 230,000 small businesses might not survive the pandemic. The second surge confirms that pessimistic outlook.
Despite a substantial investment in making their facilities safe and healthy, abiding by all state and city protocols, “non-essential” businesses may be shuttered as the number of cases increase. It is important to support Governor Cuomo’s policy of “micro targeting” that only shuts down businesses that are proximate to specific hot spots, rather than shutting down the entire city or borough.
It is also important to push for federal action on another stimulus package that provides additional support to small businesses. The Paycheck Protection Program loans were adequate for three months, for those who got them, but cannot sustain businesses through what is likely to be a year of partial closure.
Finally, we need to develop a universal solution for how unpaid rent is going to be treated when the moratorium on evictions inevitably comes to an end. There are few small businesses that will have the resources to pay all their back rent. The moratorium is currently set to expire on January 1, 2021, which will result in many additional business failures and commercial vacancies. We need a national and local plan for how to deal with deferral of mortgage, rent and tax payments that creates a bridge for businesses to start generating enough revenues to survive and meet their obligations.
The Partnership has joined with the city Economic Development Corporation and the five borough chambers of commerce to establish the NYC Small Business Resource Network to provide a one stop shop for businesses seeking assistance. We secured a grant for the borough chambers from the Peter G. Peterson Foundation that enabled them to hire Small Business Support Specialists who are connecting local entrepreneurs to volunteer mentor and technical assistance providers as well as sources of loans and grants. To date, the 900 businesses that have tapped these services are among the city’s most vulnerable: they have an average of three employees, are 59% minority-owned, 48% women-owned and 29% immigrant-owned.
These businesses have clearly told us what they need. By far the greatest request was access to capital, highlighting the need for government to work with the private sector to ensure that there are resources, especially grants, available for restart costs. After financing, the most frequent requests are for help with marketing, business strategy, purchasing personal protective equipment, procurement opportunities and legal assistance. As the pandemic lingers, we expect businesses will need additional assistance with technology and moving more activities online so that they can continue to operate and generate revenue.
There is also need for clarity in regulations and enforcement. City inspectors are overwhelmed with the complexity of state and city requirements for different types of businesses. Timely, consistent guidance needs to be available to businesses and to the inspection teams from various city and state agencies. Some type of hotline for regulatory information and arbitration would be most helpful to manage enforcement and to help minimize violations and fines.
We expect the pandemic to end in 2021 with widespread vaccination, but we know that business losses will continue. The replacement of neighborhood retail sales with online shopping and on-demand delivery services has been accelerated by the pandemic and will not be easily reversed and the slow return of tourism will impede recovery for the hospitality and entertainment sectors. We hope the Council will work with the private sector to find solutions to these difficult and challenging problems.