Does Mamdani mean business, New York’s small businesses wonder?

Ronny Jaramillo and Dana Morrissey, both of whom own and run a few small restaurants in south and central Brooklyn, are the owners and operators of the “Latin bistro and cocktail bar” Chela, a Mexican restaurant. But in recent years, they have faced mounting hurdles amid surging rents and floods.

Because they believe that New York City is becoming a harder place for small businesses like theirs, they are closely watching the mayoral election.

The American dream is being sold in New York City. However, it doesn’t feel that way right now. I don’t feel like New York City is welcoming business owners,]or] protecting businesses to grow, and to employ more people. Jaramillo told Al Jazeera, “I don’t believe that’s the environment right now.”

Small business owners in New York City are paying close attention to Zohran Mamdani, the city’s likely next mayor, and how his policies might address the growing difficulties they are facing.

Mamdani’s relationship with the city’s business community is complex. Although his suggestions for small businesses reduce fines and fees, many still face high rents, limited relief, and frequently operationally slowed down operations due to climate-related risks.

Mamdani’s candidacy has a lot of appeal because of how affordable he is. His campaign prioritises a rent freeze for rent-stabilised apartments and expanding housing development to ease the city’s shortage, for instance.

Businesses continue to face significant challenges on the commercial front, as there are few safeguards against being priced out, and neither his nor his rival Andrew Cuomo’s campaigns have provided any concrete solutions to this.

We literally got jacked at one of our locations, forcing us to close it. The rent went from like $8, 700 to $15, 500 … Unfortunately, there’s nothing that stops a landlord from doing so. No protection is provided, according to Jaramillo.

“It’s typical that a company has put a lot of money into that space and invested, especially a restaurant, only to discover that they’ve been completely priced out.” That’s definitely negative. The issue is that the Brooklyn Chamber of Commerce’s vice president of small business support, Mark Caserta, said there aren’t really any controls on that in our city.

Mamdani told Al Jazeera that he is exploring ways he can tackle surging rent prices for commercial real estate.

“We will make sure that every measure we can think of in our administration is how stability should be provided to all kinds of tenants, not just those in our residential areas.” At a Saturday event, Mamdani told Al Jazeera that there are instances of different strategies being used to guarantee more stable rents for commercial tenants.

One such case is in Pennsylvania, which has a state-level programme called the Office of Transformation and Opportunity, the campaign said.

However, that program emphasizes fast-tracking permits rather than commercial real estate’s price.

Mamdani’s main goals have been to lower small business fines and fees and to design a mom-and-pop tsar who would assist the city’s small businesses in navigating potential problems.

Cuomo’s plan, by contrast, doubles down on public-private partnerships, a strategy that has contributed to surging rents over the last two decades. Cuomo’s campaign’s plan to reduce the cost of commercial real estate was not responded to by Al Jazeera.

The city heavily invested in public-private partnerships to develop important corridors under former mayor Michael Bloomberg, who served three terms between 2002 and 2013. Large developers bought up properties, including buildings that housed small businesses, giving corporate landlords more leverage to raise rents and displace businesses with tight margins.

Small business owners are frequently overlooked in NYC’s public/private partnerships. Large-scale developments are typically favored by incentives and zoning advantages, while independent retailers are faced with rising rents, limited capital funding, and increased regulatory burdens. The result is that mom and pop tenants who give our neighbourhoods their identity are getting priced out”, Bernadette Brennan, executive director of the real estate agency SERHANT, told Al Jazeera.

Developers frequently leave vacant spaces, holding out for high-paying tenants like big box stores or luxury retailers, rather than leasing to small businesses. According to Mariamillo, this undermines the city’s cultural diversity.

“I think one of the things that we love so much about New York City is its diversity of business and small business. Many of the small business owners in our community struggle to make ends meet, according to Jaramillo.

The pressure has also been felt by other owners of businesses.

Josue Pierre, who owns the newly opened Caribbean-inspired burger joint Rogers Burgers in Flatbush, a Brooklyn neighbourhood with a large West Indian and Caribbean population, told Al Jazeera that while Mamdani’s plan is not perfect, he is encouraged by the candidate’s responsiveness to small business concerns, which he feels is lacking in Cuomo.

Given those two choices, Pierre said, “I’m going to choose the candidate who is actually open-minded about doing something for small businesses.”

Increased wages

Raising wages has been central to Mamdani’s campaign, and is overwhelmingly popular among voters, with 72 percent of New Yorkers supporting a $30 per hour minimum wage, according to Lake Research Partners. By 2030, Maddani has proposed a minimum hourly wage increase.

Pierre praised the importance of a work-study-consumer balance, as well as a wage increase.

“How you manage your labour is critically important, because that can make or break you. Why would they come here and purchase anything if they don’t have any disposable income, like they do with the rents? It doesn’t help us if the rest of the economy is prospering but working-class people are experiencing a recession bubble,” he said.

Jaramillo and Morrissey argue that rising wages could force restaurants to lay off workers or raise prices. This could put a strain on the restaurant industry’s survival because of the already high cost of living.

Mamdani’s campaign argued that small businesses will be better able to give their employees a liveable wage by lowering fines and fees associated with them and the costs associated with doing so. He pointed to heightened utility costs like water bills as a key factor driving up costs, shifting the blame to current Mayor Eric Adams.

According to Mamdani, “What I’ve also heard from these tenants is that they are also having to deal with a water bill that has been raised to the highest it’s been in 13 years.”

According to Mayor Adams, “this city is becoming more expensive, whether it’s for tenants, homeowners, or small business owners,” the price is being given to that category.

In 2024, water bills rose by 8.5 percent, the biggest increase since 2011.

Mamdani’s plan for wages has not changed.

Climate-related issues

Climate resilience is becoming a growing concern among businesses, particularly retail, which has suffered significant losses from repeated flooding in recent years. According to the Brooklyn Chamber of Commerce, floodwaters in Brooklyn destroyed 200 businesses in 2023. Some residents who lived in basement apartments tragically drowned as a result of the rapid inundation of many small, ground-level businesses.

Bar Crudo, a now-closed restaurant owned by Jaramillo and Morrissey, was among the hardest hit. Sewers backed up and flooded the restaurant, causing $ 15, 000 worth of damage, of which only $ 5, 000 was insured.

New York City has been reclassified as a humid subtropical climate by the National Climate Assessment, a category that is characterized by frequent and heavy rainfall.

Mamdani’s climate policy is ambitious, focusing on retrofitting 500 public schools to be more climate-resilient and usable as emergency shelters. He also supports reducing the city’s dependence on fossil fuels and increasing its use of renewable energy.

Owners like Jaramillo believe that Mamdani’s plans are forward-looking but do not address the immediate threat that flooding is posing to small businesses in troubled areas.

Mamdani’s campaign told Al Jazeera that one of its plans is to expand the city’s small business grant programme, which will help small businesses invest in infrastructure improvements, so they can afford flood-proof storage spaces and power generators.

Mamdani’s campaign also disclosed to Al Jazeera that it wants to create more parks as natural flood barriers to protect city streets and the businesses that line them.

Obstacles to the big business

Mamdani has faced significant opposition from powerful corporate interests. His proposed tax increases, which include an 11.5% corporate tax rate, instead of the current 7.25 percent, would be frowned upon by many businesses.

The governor would have to approve any tax proposals. New York state Governor Kathy Hochul recently endorsed Mamdani over Cuomo.

Some of New York’s wealthiest donors have supported efforts to overthrow Mamdani, including former mayor and Bloomberg LP founder Michael Bloomberg, who gave $5 million, hedge fund manager Bill Ackman, who gave $1.2 million, cofounder of Airbnb Joe Gebbia, who gave $ 2 million, and Alice Walton, who gave $200, 000 to political action committees supporting Cuomo.

The Alice L. Walton Foundation’s director has few ties to New York. Walmart has no stores in the city, and according to donor records, she is based in Bentonville, Arkansas, though she bought a Manhattan condo in 2014. Despite having little connection to the city, Al Jazeera inquired about her decision to donate to a candidate.

Republican nominee Curtis Sliwa has claimed that a few prominent donors have contacted him about withdrawing from the race over concerns that his long-shot candidacy would harm Cuomo’s chances of winning over Mamdani. His campaign has not substantiated the statement, despite Al Jazeera’s request.

Through the Partnership for New York City, a group of 300 powerful figures, Mamdani met with many of the city’s top business leaders after winning the Democratic nomination in July.

According to Mamdani’s campaign spokesperson, Dora Pekec, “He]Mamdani] has made it very clear that his administration will never tolerate unnecessarily hostile people,” he said.

Private discussions included JPMorgan Chase CEO Jamie Dimon, former UBS chairman Robert Wolf, and Kenny Burgos, the head of the New York Apartment Association, a landlords ‘ group that backed Cuomo, according to The New York Times.

The discussions centered on “the severe distress in rent-stabilized buildings and the need for assistance on operating costs, especially property taxes,” Burgos’ representatives told Al Jazeera. Kinny believed that Zohran understood the distress present in older, rent-stabilized buildings and that his message was clearly understood.

Source: Aljazeera