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written by Bryan Cohen for Capitol Hill Blog October 26, 2015

You read that right. Capitol Hill restaurant and nightlife owner Dave Meinert and socialist City Council member Kshama Sawant are teaming up to unveil a “rent stabilization” plan Tuesday for Seattle small businesses.

According to a short announcement sent out Monday evening, the plan will skirt the statewide ban on rent control which the Sawant office says does not apply to commercial properties. You can read the RCW section here. “Business owners can have few options when faced with drastic rent increases, as relocation costs can be prohibitive,” reads the announcement.

UPDATE: Details of the plan — including proposals for rent stabilization, a “portable retirement account” system, and expanded late night transit to help “swing shift” workers commute — are below.

Meinert, who owns Lost Lake, the Comet, and Ernest Loves Agnes, has tussled with Sawant in the past over the $15 minimum wage issue, making the pairing a little unusual. The two apparently started having more productive conversations while pounding out the final minimum wage deal on the mayor’s Income Inequality Advisory Committee last year.

“Kshama and I have been talking/meeting since (then),” Meinert said in an email to CHS. “Lately we started discussing the displacement of small business and how it is similar to the displacement of residents.”

Meinet’s Comet also played host to an appearance by Socialist Alternative-championed Bernie Sanders this summer.

There are few examples of true commercial rent control efforts to point at in major cities — or minor ones, for that matter. In New York, the movement has ebbed and flowed for decades, peaking again this year. Here’s how a proposed bill would work in NYC:

The tale of the Small Business Jobs Survival Act (better known as the SBJSA) in the City Council is a long yet uneventful one. Basically, the bill — which, in structure, is very similar to its upstate counterpart — has been floating around the chambers of City Hall since 2008. (Last year, Gotham Gazette dove into its reintroduction.) It would let commercial tenants have the right to lease renewal ten years or more. If a landlord wants to raise rent, mediation with the tenant would be mandated, and, if the parties don’t come to an agreement, an arbitrator would make the final decision.

While the teaming of Meinert and Sawant might be a bit of a surprise, the two have collaborated before. Meeting records show Meinert met with Sawant in May 2014 shortly after the mayor announced his minimum wage task force.

Sawant’s small business announcement comes in the final stretch of her bid to represent District 3 at City Council. While she has criticized large corporations in the past for eroding small business, her fight for $15 had a chilling effect on many local owners. According to the Monday media release, Sawant will unveil additional proposals aimed at helping small businesses on Tuesday.

Earlier this month, Sawant challenger Pamela Banks unveiled her small business plan and a group of Capitol Hill business owners supporting her run. The Banks plan would create a city lending program and a “Small Business Advisory Committee.” The two candidates also discussed their small business proposals at a Greater Seattle Business Association forum in September.

The small business “rent stabilization” plan will be unveiled Tuesday morning at City Hall.

SEATTLE – Councilmember Kshama Sawant will join with Seattle nightlife industry leader David Meinert and other small business owners tomorrow to unveil a plan to pursue rent stabilization for Seattle’s small businesses.  Business owners can have few options when faced with drastic rent increases, as relocation costs can be prohibitive. While the state statute prohibits rent control for residences, there is no such law for commercial properties.

Councilmember Sawant will also unveil additional proposals intended to support small businesses, and their workers, tomorrow. The small business initiatives tie directly to the City’s proposed 2016 budget, which is currently undergoing Council review.

WHAT:

Announcement of plan for rent stabilization for small businesses, other small business initiatives

WHERE:

Seattle City Hall

Lobby, First Floor

600 4th Ave., Seattle 98104

WHEN:

Tuesday, October 27

9:00 a.m.

WHO:

Councilmember Kshama Sawant

David Meinert

Small Business Owners



The Plan:

Like so many working people, the majority of Seattle’s small businesses and independent self 
-employed individuals struggle to get by. They face ever-increasing rents, poor access to capital, and limited help from City agencies. Too often, small businesses that are integral to a neighborhood’s character are displaced. This is
especially true for women and minority owned businesses.We have come together to propose a series of innovative, progressive policies to strengthen independent and small businesses and to provide a better environment for artists. Both are important to Seattle’s thriving economy and culture. We find common ground in our belief that the City government should prioritize the needs of working people and small businesses, rather than giving special breaks to big developers and corporations. Together, we present seven ways to begin improving conditions for small businesses and their workers.


1. Commercial Rent Stabilization to Benefit Small Businesses
Just like for workers, one of the biggest challenges facing small businesses and artists in Seattle is theskyrocketing cost of rent. While the 1981 Washington State ban on the regulation of rent blocks the City ofSeattle from legally putting limits on rent hikes in the residential housing market, the ban does not apply tocommercial leases.Enacting a rent control policy on commercial property will disproportionately benefit small businesses thatotherwise struggle to sustain their storefront operations and compete with big business outlets. It will also helpartists who struggle for studio space in the urban core of the city. During the current City budget discussions,Councilmember Kshama Sawant will be moving a Statement of Legislative Intent for the City to commission astudy and propose draft legislation to enact commercial rent stabilization in Seattle. This would form the basisfor the City Council to pass an ordinance in 2016.


2. Portable Retirement Accounts for Workers in Small Businesses
Many small businesses face disadvantages compared to big business in attracting and retaining employees. In sectors of the economy with high labor turnover and precarious work, particularly restaurant and retail, small businesses face challenges providing employee benefits. Seventy five percent of Washington workers employed by businesses with fewer than 100 employees do not have a pension or retirement plan.A City-sponsored pension plan would allow small businesses the choice of easily contributing into a portable pension account. This would increase pension benefits for workers at small companies who change employers or have multiple employers. It would also save small business the overhead of running their own plans and help them compete with larger businesses that have benefit packages. The Economic Opportunity Institute has drafteda proposal for such a plan. Increased investment in affordable workforce housing will also help Seattle small businesses have a larger pool of workers to employ.

3.Expand Late Night Public Transit
Seattle’s nightlife and entertainment sectors are an integral part of our city’s livability, economic vitality, and our small business community. But the limited availability of late-night public transit limits customers’ access to these businesses, imposes a serious burden on workers in these industries and other swing shift workers, and hinders public safety, especially for women and LGBTQ people.A world-class mass transit system, including 24 hour service for our buses, streetcars, and light rail, will bring huge environmental, social, and economic benefits for Seattle. Rather than wait for Olympia to provide full funding for public transit, Seattle can and must lead as was done in 2014 with Proposition 1.The City Council can immediately fund a significant expansion in late night service for Metro by re-instating the business head tax (with exemptions for very small businesses) and increasing taxes on commercial parking lot operators. We also renew the call for Washington State to give cities like Seattle the ability to regulate the hours for its bars.


4. Expansion of Social Service Outreach for the Homeless, People with Mental Illnesses and Addictions
The alarming growth of homelessness and the lack of social services for people struggling with addiction or mental illnesses are unacceptable and especially outrageous in a city as wealthy as Seattle. Small businesses are impacted by this in a variety of ways, including property and street crime.Our city needs to make it a top priority to end homelessness and expand social services. First and foremost, this means a significant increase in funding for human service providers as part of a comprehensive plan developed in close discussion with social justice advocates.We strongly support the proposal for opening a new Urban Rest Stop in Capitol Hill and other neighborhoods.We need progressive and creative approaches to addressing crime, such as expanding the LEAD, HOST and SYVPI programs rather than a heavy handed “law and order” strategy.
 Attention to basic infrastructure, such as quality ADA compliant sidewalks, good street lighting, and more regular garbage collection in the busiest parts of the city are also simple steps which can help reduce crime.We support using progressive taxes to fund these programs, such as business taxes, developer impact fees, anda municipal income tax on the wealthy.

5. Municipal Bank & Low-Interest Loans
Small businesses face major disadvantages in competing for affordable credit, especially from the large banksthat dominate our financial system.The City of Seattle should establish a public, municipally-owned bank rather than continuing to contract withlarge private banks like Wells Fargo. A Seattle municipal bank would have a public benefit mandate to providethe same access to low-interest loans to local small businesses and homeowners that big businesses enjoy. Itcould also help finance progressive infrastructure projects like building affordable housing, while directing anyprofit made from interest back to the City. A municipal bank could also help the City address critical communityissues such as the Somali remittance crisis.For background on municipal banking in Seattle, see this article in The Urbanist.

6.Priority for Local Small Businesses in Commercial Leasing
Our city’s economic policy should give priority to local small businesses and artists rather than large chain stores, franchises, or big box retailers. Small businesses face challenges in gaining access to prime commercial leases, which are overwhelmingly given to large companies. The City should commission a study on how City policies(zoning, taxation, regulations, etc.) can be leveraged to advance these goals through legislation.

7.Seattle Needs a Small Business Task Force
The City of Seattle has no task force or commission dedicated to addressing the challenges facing local small businesses. Big developers and corporations have many avenues for their needs to be addressed by the City government, but all too often, truly small businesses and artists are ignored. A local small business task force, including micro-businesses, should be established to study and make recommendations, starting with the proposals we have laid out above.


ENDORSERS:
Kshama Sawant, Seattle City Councilmember;

David Meinert, owner, The Five Point Cafe, Comet Tavern, & others
Molly Moon Nietzel, Molly Moon’s Homemade Ice Cream; K. Wyking Garrett, AfricatownSeattle.com which features and highlights Black-owned businesses and community; Marcus Charles, owner, Neumos & Crocodile Cafe; Mike Rodriguez, Restaurant Opportunities Center United; Sharon Blyth-Moss & Shirley Henderson, small start-up business owners; Ottman Bezzaza, owner, Med Mix; Paula Lucas, owner, Le Frock; Sonja Ponath, small landlord, former small business owner; Ed Beeson, owner, Gigs-4-U; Katey Pierini, licensed massage therapist; Luis Rodriguez, owner, The Station; Shontina Vernon, musician, writer, theatre artist & educator

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