AN ORDINANCE relating to commercial tenancies; temporarily restricting increases in commercial rents; authorizing repayment of late rent in installments for small businesses and nonprofits; declaring an emergency; and establishing an immediate effective date; all by a 3/4 vote of the City Council.
The Report of the City Council Agenda Item one Council Vote 119 766 relating to commercial tenancies temporarily restricting increases in commercial rents, authorizing repayment of late rent installments for small businesses and non-profits, declaring an emergency and establishing an immediate effective date all by a three fourths vote of the City Council. Thank you. I will move to pass council bill 119766. Is there a second? Second. It's been moved and seconded to pass the bill. Councilmember Herbold is the lead sponsor on this bill, so I will yield the floor to her to allow her an opportunity to address the bill first. I understand that there's also an amendment, but why don't we go in and address the underlying bill first and then we will consider the amendment? Fantastic. Thank you. So this legislation builds off of the rent moratorium for commercial tenants that Mayor Durkan proposed a number of weeks ago and is intended to address the sort of inherent tension between that moratorium and the fact that rent is still due for folks. It establishes a way for property owners to get paid and for small businesses and nonprofits to minimize their rent debt as it may accumulate over the period of this crisis. My office has heard from small businesses concerned about their ability to survive the public health emergency. I'm sure many other council members have heard those stories as well. Seattle Times writer Danny Wesley wrote a story recently that I think reflects a lot of what we see happening across the city. The difference between property owners who are being very generous and understanding in creating the time and space necessary for tenants to pay the rent and other responses that are much more stringent and not really appreciative of the crisis that that we're in right now. A number of months ago I'm sorry, a number of weeks ago, a coalition of small business owners led by Molly Municipal, reached out to council members early on to propose ways that the city could help more small businesses survive. This was one of those ideas contained in that in that letter requiring rent payments to be payable over longer periods of time. In developing the legislation, I consulted with other additional small business owners, including Joe Karger of to develop Pizza and Beetaloo Ventures, a nonprofit that supports entrepreneurs, as I say, with limited resources and unlimited potential. And they provided a lot of feedback and and good. Ideas that we worked to incorporate. I have a just a short closing statement that I would like to also say at the end, if that's okay. After we work on the on the amendment. That is fine. So why don't we go ahead and take up the amendment, which is Amendment One on the agenda? Why don't we go out and take that up and then we will consider the amendment and then we will have comments on the bill as amended at the after we we consider the amendment. How does that sound? Okay, great. So would you like to formally move your amendment? I move Amendment one. I will second it. Thank you. Said Amendment one. Let me go to the the Roberts rules word if I can. So it's been moved and seconded to amend the bill. Council member Herbold will now address Amendment One. So Amendment One came out of some work with Washington Commercial Real Estate Development Association. This amendment is intended to put some common sense limitations on the small businesses that are covered. Businesses will need to have experienced an economic hardship either because they were forced to stop doing business or because their revenue dropped by 30% or more as compared to the previous year. And the amendment also clarifies that local outposts of large change would not change, would not be eligible, even if they have 50% or fewer employees. But we've been careful to make sure that small franchisees would still be eligible, even if the franchisor is excluded from the definition. The goal is to ensure that when we talk about helping small businesses survive, we're really focusing on the businesses most likely to need help to do so and not opening the doors for businesses who don't really need the protection. And I, I appreciate the fact that an organization that is devoted to the interest of commercial real estate, it has has been willing to come forward and recognize the need for this legislation while making some some recommendations that I feel are reasonable. Thank you. Are there any questions or comments on Amendment one to counsel bill 119766. Looks like there are no questions or comments. So will the clerk please call the role on the adoption of Amendment One? Councilmember Morales. I. Councilmember mosquito. I. Councilmember Peterson. I. Council Members on site Council Member Strauss Site Council Member Herbold i. Councilmember Suarez, I. Council member, Lewis. I. President Gonzalez. I. Nine in favor nine opposed. The motion carries in the amendment is adopted before Councilmember Herbold makes her final comments. Are there any other further comments from any of my other colleagues on the bill as amended? Councilmember Morales. I thank you. I do just want to make a quick comment. As Councilmember Herbold said, all of us, I'm sure, have been hearing from our small business constituents, and we know that commercial tenants really have almost no rights and our small businesses need protection, especially during this emergency, so that they have some kind of chance to come back once we are in recovery. So as Councilmember Herbold said, this isn't complete rent forgiveness, it's just a freeze on increases. And they have a year, but they can't pay the money back. So we know that small business already takes a big risk, regardless of what kind of business they're doing of our business. Work really hard to make our neighborhood commercial districts really so excited for this opportunity to offer some rent relief to support them. Thank you. Councilmember Morales, any other comments from my colleagues? Okay. Hearing non councilmember approval. I just want to say thank you so much for the introduction of this of this bill. I think it is a very fine compliment to some of the work that we're seeing in this landmark space as it relates to residential tenancies. And I will have a bill for consideration by the full council later this month that effectively does the same thing that this bill does. But in the in the residential category of tenancies as opposed to the commercial tenancies. So I think everything we can do to create as much stability as we can in this space is going to be absolutely critical to making sure that we allow people the best opportunity to see the light at the end of the tunnel once we hopefully and I believe we will get through this public health crisis. So I'm going to let you have the final, final word before we call this bill to a vote. Yeah. Just a personal note that, again, I know everybody who represents a district or or even our. At-Large. Council members share this this really personal feeling that our district and our city is so is so benefited by just an incredible way array of truly beloved small businesses. It's really our small businesses are really what gives our city vitality and make our neighborhoods such wonderful places to live. I really believe that we cannot let the coronavirus attack what makes our communities so special. And the hope is that this legislation will give these beloved small businesses and essential non-profits a fighting chance to survive. One of the things that folks have have reminded me is that we do that small businesses do have financial relief coming to them. Many folks have have applied. But again, although that financial relief is coming, we don't know how much of the the how much the relief will will mitigate as it relates to the financial impacts of this of this virus. Nor do we know necessarily the timing when people will receive receive funds. So this bill will allow people to buy some time and it allows them to enter into a time payment plan of six months after the end of the crisis and allows them a full year to pay off their rent. In addition to, as we mentioned before, freezing rent on the types of leases that don't have multiyear commitments for rent increases within them themselves. So thank you, everybody, for working with me on this bill. I think it's a really good example of the types of things that we could do to address the needs of our institutions that we care so deeply about. Well said, Councilmember Herbold. Let's go ahead and get this bill into law. So I will ask the court to call the roll on the passage of the bill as amended. Councilmember Morales. I. Councilmember Mishra i. Councilmember Peterson, i. Councilmember to what. I. See. Councilmember strauss. I. Councilmember Herbold, I. Councilmember suarez i. Council member lewis. High. I think Gonzalez. I. Not in favor, not opposed. The bill passes as amended and the chair will sign it. Will the clerk please affix my signature to the list to the legislation on my behalf? Let's move on to item two. Will the clerk please read item two into the record?