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Manhattan Commercial Real Estate Tax Is Driving Businesses Under, Critics Say

NEW YORK (CBSNewYork) -- A demand for mayoral intervention was issued Tuesday – in the form of a simple tax reform to help stem the glut of empty storefronts in some of the city's nicest neighborhoods.

As CBS2 Political Reporter Marcia Kramer reported, it is being presented as a new and pressing problem for Mayor Bill de Blasio – who wants a second term.

"Are you listening," said small business owner Natasha Amott.

It is a simple question to the mayor from Amott, who said she is drowning in what she calls an unfair tax that is contributing to the abundance of empty storefronts all over Manhattan.

"Do you understand that this is not a tax tied to sales?" Amott said. "It's tied to the simple fact that I'm already paying a high rent in Manhattan."

She is talking about the city's commercial rent tax, which applies only to Manhattan businesses below 96th Street and above Chambers Street whose rent is above $250,000 a year.

"Businesses in Manhattan are getting squeezed to the point where they just can't survive," said city Councilman Dan Garodnick (D-4th). "We are stepping on the neck of small businesses."

Garodnick has introduce a bill that would bring relief to 3,400 businesses – 40 percent of those who pay the tax – to prevent them from becoming yet another statistic in what some call Broadway blight. He would only tax those whose annual rent is north of $500,000.

The price tag for the bill is $52 million, which Garodnick said is small potatoes in a city with over $84 billion.

Amott, who with husband Jeffrey Patten owns cooking store Whisk on Lower Broadway, actually called the mayor's radio show several months ago to get him to focus on her plight. She said he brushed her off.

"They believe the mayor is viewing this as, you know, wealthy business owners having to pay a little extra tax, and what's wrong with that?" she said. "I'm not a wealthy business owner. I am a small business owner trying to do well."

The Mayor's office said the city cannot afford the reform.

"At this time, especially given the uncertainty about the federal budget, health care and tax reform, we don't feel it's the right time to take major action on the commercial rent tax," said de Blasio Deputy Press Secretary Freddi Goldstein.

Goldstein pointed out that the mayor has greatly reduced fines for small businesses.

But Amott countered, "I can't imagine that people are facing $15,000 worth of sanitation fines each year, which is what my commercial rent tax bill is."

A total of 41 out of the 51 City Council members said it is imperative to pass a bill that would end the glut of empty storefronts. Forty-one votes is a veto-proof majority if the bill gets to the floor for a vote.

Garodnick hopes that the bill will be voted on this fall and that the mayor will change his mind about supporting it. The worry is that the mayor will try to get the City Council speaker to prevent a vote.

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