Policy Memorandum
Storefront Awning Violations
TO: The Department of Buildings, Department of Small Business Services, New York State Department of State
FROM: Viarlenis Acosta
SUBJECT: Storefront Awning Regulations
DATE: May 30th, 2017
Executive Summary
This memorandum proposes policy alternatives to address storefront awning regulations that are affecting small businesses in the Cypress Hills/East New York neighborhood in New York City. The lack and ambiguity of information, small business services deficit from city agencies and allowance of illegitimate awning creation and installment businesses are the main causes of this presented problem. I propose four alternatives and recommendations to address this matter, which include: mandatory key point communication in regard to awning regulations, payment plan and grace period extension, an advisory mediator, and legal support along with legitimizing illegal awning businesses.
Problem
I will like to present suggestions for communication on the process for awning creation, installation and code enforcement by the Department of Buildings to small business owners and/or property owners. As a Community Associate working with the Cypress Hills Merchants Association, I am obliged to express the concern by the recent waves of fines being issued to the small business owners and/or property owners along the Fulton Street commercial corridor, in East New York, Brooklyn by the NYC Department of Buildings. Small businesses in the area have been fined up to $5000 for their awnings on their storefront, including Civil penalties, and the licensed removal of their awning. The fines include: illegal signs per size requirements, displayed business information, permitted installation of electric work for signage lighting, permitted sign installation, exceeding the zoning regulations, and landmarks codes. Many of these laws passed without small merchants knowing or understanding them, hence they were not equipped with the information for remedial action and becoming subject to unjust practices by city regulatory agencies. Therefore, many fines reaching small business by surprise and unsure of where to start to seek permanent solutions to this inconvenience.
For the surveyed recipients of these fines, 67% of them have 5 employees or less, making these penalties a significant disadvantage to their costs. For one business owner, the fine is the equivalent to the profit of one month during this slower season. For “Fernandez Liquor Store”, the business owner, Leonel, says “I paid $20,000 for my awning, and I can’t imagine taking my awning down and throwing that investment into the garbage”. On the other hand, one of the property owners or landlord, to whom the fines are directly issued, said “if the tenant refuses to pay the fine, I will have to evict him. I am not covering the cost, it is not my awning.” Not only is this causing tension between landlords and commercial tenants (business owners), but also widening the gap in the relationship between city agencies and small businesses throughout New York city.
This neighborhood was the first to be rezoned under Mayor Bill De Blasio’s administration, becoming an area to be redeveloped in the very approximate future . As an active team member of the Cypress Hills Merchants Association, we have received feedback from property owners being offered up to triple the amount of the price they originally purchased their property for. Some business owners fear they won’t be able to afford their spots, and longtime clientele will leave the neighborhood. From these separate tensions, suspicions have risen to the sequence of the issuing of these fines to the neighboring businesses. This suspicion has risen since fines are issued by the Department of Buildings, yet the regulatory agency makes these unannounced visits to businesses when they receive direct complaints from consumers and/or residents. These direct complaints can be easily made online or by calling 311. For Manuel G., owner of Genesis Jewelry Store, this has been an ongoing ordeal. He said “$8,000 later, this is what I am left with. I’ve had more than one complaint but I am here to stay,” referring to the suspicion that this is a displacement tactic from interested buyers that are flocking into the community, along with the removal of his once attractive awning, to a flat, unappealing banner as its replacement. This issue is reminiscent of similar occurrences in other boroughs of the city, when the law was first passed and deeply affected vibrant commercial areas like Corona, Queens. “The crackdown, which allegedly has been targeting largely minority-owned businesses along commercial strips on Roosevelt Avenue and 103rd and 104th Streets, has forced many owners to tear down their awnings and pay thousands of dollars in fines. As businesses take down their awnings and struggle to pay the fees, Roosevelt Avenue has begun to resemble a ghost town.” Both neighborhoods with a similar commercial climate, nonetheless we are looking to protect our small business owners, inform and educate the rest of those on the corridor to avoid Cypress Hills to from having the same destiny.
Others affected on the same block on one day were thirteen businesses, 88% of them being in business for five years of more with an average summons was of $3,350. For those many complaints to be filed in on one day, the association and other business on the commercial corridor on now on alert and fear if further waves of complaints are yet to come. And for those business that have a significant amount of time on the corridor without previous violations are confused with what they are not in compliance with and what are the quickest, low or no cost solutions to this.
Along with the costs of fines and possible replacement of the awnings, many of the small businesses complained about the awnings that were created and installed illegally by awning manufacturers. It is unreasonable that there are awning manufacturers receiving payment for illegal work. A few of them no longer existent and others, in operation and causing a latent problem for the businesses they are contracted by. Any business openly selling illegal items will be shut down immediately, why hasn’t this been the case for these businesses? Not until the connection was made between a representative of the Division of Business Services at the Department of Small Business Services, were the members of the Merchants Association made aware of a list of licensed awning manufacturers in New York City, along with the need to have a licensed architect, licensed electrician and understand their corresponding zoning regulations. This information is accessible online, yet difficult to access, especially considering that 72% of the surveyed businesses do not advertise online or do not use email at all.
OPTIONS
Policy Option 1
According to the NYC Department of Consumer Affairs “Approximately three months before your license expires, DCA will mail you a license renewal package. You must renew your license before it expires in order to continue operating your business and avoid fines.” This, and when a business owner first issues a business license, will be an ideal point of mandatory contact that small businesses have with NYC Consumer Affairs Department, in which the department can update the business owners of ways to remain in compliance with New York City’s regulations. To foment effective communication between stakeholders, there is a need for transparency in information. At this point of interaction, the business owner should be informed of all updates in regulatory laws before completing his/her payment, hence both parties in liability with their contract. It will be a cost of additional staff if the business owner is going in person to the NYC Consumer Affairs Department to issue or renew their license. If it will be completed online, a feature/pop-up will be presented before finalizing the payment of the issuing or renewal of the business license, with the updates presented to read at that moment and available to download in a PDF file that can be saved. If the payment is issued by mail, the information should be delivered to the mailing address from which it was received. To cover the cost of these adjustments, the pricing of the renewal can have a minimal increase yet significant prevention from exorbitant fines.
Policy Option 2
This option entails the extension of the payment grace period for small businesses. The violations issued by New York City Department of Buildings(DOB) allow business owners one month to issue a payment or dispute it in court from the violation issue date. For the dispute to carry out in the business’ favor, “Property owners must correct the issues listed in the DOB violation. Once completed, provide supporting documentation that shows the work has been performed to the Unit that issued the violation. The team will then dismiss the violation. To remove the violation from the property’s record, the condition must be corrected and proof of that correction must be provided to the issuing Unit before the violation is removed from the property’s record. Where the DOB violation pertains to a DOB civil penalty, payment must be made to the cashier.” This process includes hiring a licensed awning removal company, a licensed sign hanger , and issue a new permit for the awning. If that awning is illuminated, an electrical permit will be required as well. The fine for up to $5000 to the corrective actions to dispute the same will approximately have the same cost. For a small business’ bottom line, this disbursement can be detrimental in the span of 30 days. The extension on this grace period can serve as a support to the business owner, whom in the majority of cases analyzed, still has to cover their fixed costs to continue to be in business, as well as generate additional funds to cover the violation. As one payment option, an extension to this payment grace period, the business owner can prove that they are in the process of making the corrective actions with email records or payments to licensed stakeholders, while the aggregate the funds in at least 60 days. Another payment option should be a tailored payment plan, that can be determined by the profit and loss that the business can prove in the previous months and comparison of the time of the issued violation to that time in the previous year. This will not have any cost for city agencies, yet can support small businesses in accommodating the needs, without causing such a considerable financial burden.
Policy Option 3
Maintaining business owners informed and updated on awning regulations and general guidelines can prepare them with the necessary tools to remain in compliance with such. In conjunction with the NYC Department of Small Business Services, the Merchants Association of Cypress Hills can provide all businesses on the Fulton Street commercial corridor with printed material in their language, served by a mediator/surveyor to have an advisory role. This program associate will be educated and updated on all guidelines and can relay the messages in simple language to small businesses. The city’s leading role should be to retain lawyers whom can support small businesses when they have become to victims of unprincipled awning companies, and the associate have access to connect businesses he/she has surveyed that need this particular service. Holding these awning companies accountable will be required to bring fairness to this unstable process and relieve the small businesses of this predicament.
Policy Option 4
Lastly, NYC Consumer Affairs Department has a responsibility to ensure that the licensed businesses should also follow the items that are produced and sold at their establishment. The awning businesses that are making a significant profit from illegal work are not being penalized for violating the same regulations that other small businesses are being held accountable for. Mr. Chief, a veteran business owner in Cypress Hills says “I had issues with my awning, yet the business that created it no longer exists” . Many of the awning business get a good run, creating exuberant awnings, up to $25,000 including electric work and installation. As soon as they receive a good number of complaints from clients in regards to awning violations and the request for refunds, the awning businesses opt to close shop and relocate under a different name. The City of New York can opt to expand the number of businesses licensed, provide a legit product and service, as well as all small businesses working together and in compliance with New York City’s regulations. Getting the awning business licensed can generate necessary funds to implement such a program, and allow these small businesses to continue to further develop instead of having to relocate or move their businesses when a client exposes their wrong doing.
Recommendations
Our Common Goals
With our ever changing commercial environment, in the array of diverse neighborhoods in New York City, our local government need to continue to represent and protect the constituents that keep the city’s economic path on an upward trajectory. These storefront awning regulations have become a significant barrier for smaller businesses, and the enforcement has been coarse upon trying times. Both leading agencies have missions aligned with this statement: “The NYC Department of Consumer Affairs (DCA) protects and enhances the daily economic lives of New Yorkers to create thriving communities. The DCA empowers consumers and working families by providing the tools and resources they need to be educated consumers and to achieve financial health and work-life balance. It also conducts research and advocates for public policy that furthers its work to support New York City’s communities.” “The NYC Department of Small Business Services (SBS) helps unlock economic potential and create economic security for all New Yorkers by connecting New Yorkers to good jobs, creating stronger businesses, and building thriving neighborhoods across the five boroughs.” According to these undertakings, I highly recommend taking these policy options into consideration, utilizing the non-for-profits as the liaisons to further improve the economic development of our city, and the relationships between all stakeholders.
Equability, Education and Collaboration
Our under-served communities are working hard to strive and survive. With the lack of education and resources reaching certain corners of our city, we highly recommend looking to those local stakeholders whom seek to connect our small businesses to resources to reach their optimal potential. Through crucial liaisons between city agencies and our small businesses, we can assess the needs of our small businesses to be able to provide them with viable solutions. This will not only provide the small businesses the opportunity to access the tools to succeed, but will also provide them with an equitable prospect to pursue their own goals.
A key start is through access to information and updates through community liaisons, local community based organizations. Being able to hire a program associate to share printed materials, advise and gather information on the needs of the small businesses can provide them with an opportunity to become and remain in compliance with the city agency’s regulations. As a representative on a grass roots level, data collection can be shared and serve city agencies to continue to reshape ordinances to meet the needs of our communities. Collaboration between all stakeholders can only better relationships and guarantee effective delivery of services and progress in the city’s economic development.
A combination of the policies presented will be ideal, aiming to tackle all major barriers from the problem in question: informing small business who are unaware of the awning regulations, those small businesses who have been affected already with financial and legal support, advisory support for preventative measures and city enforcement to illegitimate businesses. With local stakeholders already doing much of the grass root work, it can decrease cost in the implementation of these policies presented. Having substantial data can allow the efficiency of the creation of resources to better serve all our constituents.
Summary
The awning violations that are affecting more and more businesses in Cypress Hills East New York are alarming and causing concerns to small business of the area. Not only will this hurt the façade of their business, but the financial burden this may cause along with the loss of business makes it much harder for them to continue to envision success in the recently rezoned neighborhood. There is a need to for our city agencies to be held accountable for the ineffective communication that has led to injustices for the small businesses throughout New York. These small businesses are struggling to survive and thrive in our ever changing commercial environments and violations such as the awning problem presented simply adds more tension to this process. As stakeholders, holding small business owners responsible for their practices to be legit, despite the service provided should be the same for regulatory agencies should be as well, with their implementation of new law compliance.
Please contact me if you have any questions or require any additional information. Thank you for your time and attention.
https://www1.nyc.gov/html/lpc/downloads/pdf/pubs/App_Guide_Awning_Installation.pdf
Interview conducted by Viarlenis Acosta with local businesses
Interview conducted by Viarlenis Acosta and Raquel Olivares with local businesses
http://www.nydailynews.com/new-york/brooklyn/city-council-passes-plan-transform-brooklyn-zone-article-1.2609215
Interview conducted by Viarlenis Acosta with local businesses
https://www.dnainfo.com/new-york/20160420/east-new-york/heres-how-east-new-york-rezoning-plan-could-affect-you
https://www1.nyc.gov/site/buildings/renter/file-a-complaint.page
Interview conducted by Viarlenis Acosta and Raquel Olivares with local businesses
http://www.qchron.com/editions/western/legislation-tries-to-protect-small-businesses-from-awning-trouble/article_864ba47e-190e-5859-8866-e8e351856c2c.html
Interview conducted by Viarlenis Acosta and Raquel Olivares with local businesses
Interview conducted by Viarlenis Acosta and Raquel Olivares with local businesses
https://www1.nyc.gov/site/dca/businesses/licenses-renew.page
http://www1.nyc.gov/site/buildings/business/resolving-violations-dob.page
https://www1.nyc.gov/assets/buildings/pdf/sign_hanger.pdf
Interview conducted by Viarlenis Acosta with local businesses
http://www1.nyc.gov/site/dca/about/overview.page
http://www1.nyc.gov/site/sbs/about/about.page