The Real Estate Board of New York to The City Planning Commission Concerning N 210406 ZRY (CEQR No. 21DCP183Y) - Health and Fitness Citywide Text Amendment

Basha Gerhards

Senior Vice President of Planning

September 21, 2021

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The challenges and transformation occurring today in retail, from brick and mortar to ecommerce, is not a new phenomenon. The retail environment is cyclical – trends come and go, but the business failure rate as tracked by the Bureau of Labor Statistics has remained stable for decades. At the inception of the discussion surrounding PCEs, which led to the special permit process, it was found that “on the blocks…where there is a proliferation of physical culture establishments surveys show a general trend toward business loss and failure. This trend is evidenced by a general drop in money sales in the area, large numbers of firms and businesses relocating to other areas, and noticeable amounts of businesses closing, as well as the real estate failures and recruitment difficulties.”1

Today, PCEs are not detrimental to the welfare of New Yorkers or the character and economies of New York City neighborhoods., In fact they bolster local economies, and are valuable health amenities. While PCEs are no longer the cause of the above problems noted in the original 1975 meeting minutes, these comments are reflective of broad challenges New York City and its retail environment are facing while recovering from the pandemic, including business loss and failure.

The zoning text must be adapted to the challenges the city faces today and is anticipated to face in the future. As noted in the Department of City Planning’s application materials, the current special permit procedure is outdated, is unfairly burdensome to small businesses and limits neighborhood health and fitness services2.

Ending the special permit process would allow for more equitable economic development in New York City. According to the NYC Business website, it is estimated to take 4-6 months to receive a special permit for a PCE. Practically this process can take much longer, with the BSA self -reporting for the last full year available an average number of 244 days from filing to decision. The permitting process is also arduous – the applicant checklist has 17 steps to complete the application. The impact of these factors, in addition to the roughly $50,000 cost as noted by the Department of City Planning, is the exclusion of potential business owners who lack the adequate cash to endure the special permit process it takes to enter the market. Data tells us that women and people of color have far less access to start-up money than male entrepreneurs, with women receiving only 2.4% of VC funds3. Concerningly, entrepreneurs of color face even greater challenges, obtaining less than 1% of VC funds4. Upholding expensive barriers to establish businesses in New York City disproportionately impact both female and minority entrepreneurs, which is not good for the welfare of New Yorkers, or to the city’s retail ecosystem.

The detrimental effects on the economy and small business owners are unacceptable. REBNY encourages the City Planning Commission to approve the text amendment and remove this undue barrier. Thank you for the consideration of these points.