>>> MAYOR BILL DE BLASIO JUSTED

THE POSSIBILITY OF INTRODUCING A

VACANCY FEE OR TAX FOR STOERCHTS

THAT ARE LEFT EMPTY A LONG

PERIOD OF TIME OSTENSIBLY TO

SEEK TOP DOLLAR RENT.

THE PROPOSALS COMES AFTER A CITY

COUNCIL REPORT FOUND IN

MANHATTAN VACANCY RATES DOUBLED

INTEREST 2% TO 4% OVER THE PAST

FIVE YEARS.

THE REPORT BLAMED LANDLORDS FOR

CHARGING SKY ROCKETING RENTS AS

BRICK BRICK AND MORTAR RETAILERS

STRUGGLE WITH ONLINE

COMPETITION.

THE EDITORIAL DIRECTOR OF THE

REAL DEAL, A REAL ESTATE PROCESS

PUBLICATION HAS BEEN COVERING

THIS STORY EXTENSIVELY.

HE JOINS US NOW TO TALK ABOUT

IT.

AT A THAUNGTS FOR JOINING US.

>> THANKS FOR HAVING ME.

>> FIRST OF ALL, IS THE PROBLEM

OF EMPTY STOREFRONTS

UNPRECEDENTED IN NEW YORK CITY,

BECAUSE YOU KNOW SOME BUILDING

OWNERS SAY THIS IS PART OF THE

REGULAR BUSINESS CYCLE, THAT HAS

COME.

AND THAT WILL SOON LEAVE?

>> IT'S A LITTLE BIT OF BOTH.

THERE IS CERTAINLY SOME -- THE

MARKET, THE RETAIL MARKET HAS

GONE UP AND DOWN OVER THE YEARS.

BUT SOME PEOPLE CALL IT

EPIDEMIC.

THERE IS A SYSTEMIC CHANGE IN

THE RETAIL MARKET GIVEN THE RISE

OF eCOMMERCE AND WE'RE GRAPPLING

WITH THAT.

>> I'VE BEEN IN NEW YORK CITY 40

YEARS.

WE'RE TALKING ABOUT THAT.

I'VE NEVER SEEN IT BETH OF US

LIVE IN BROOKLYN.

IT'S NOT JUST MANHATTAN.

>> I WAS DRIVING IN AND TAKING A

CAR.

ON THE ATLANTIC AVENUE,

STOREFRONT AFTER STOREFRONT,

EMPTY, RENTS AVAILABLE, BROKERS.

IT WAS JUST -- IT WAS PRETTY

SHOCKING TO SEE.

>> SHOCKING AND KR DEPRESSING.

BUT IS THIS AS SOME ELECTED

OFFICIALS PORTRAY MOSTLY THE

FAULT OF GREEDY LANDLORDS WHO

REFUSE TO NEGOTIATE LOWER RENTS.

>> I THINK THAT'S A LITTLE BIT

OF OVERBLOWN TO BE HONEST.

WHAT WE HAVE IS RETAILERS ARE

GRAPPLING WITH A NEW ENVIRONMENT

WHERE YOU HAVE THE LIKES OF

AMAZON, JET.COM THE EGIANTS

TAKING DAY TO DAY SHOPPING

EXPERIENCE OFF THE THE

STOREFRONTS AND ONLINE.

RETAILERS HAVEN'T FIGURED THAT

OUT.

LANDLORDS ABSOLUTELY HAVE BEEN

IN SITUATIONS WHERE THEY'VE HELD

OUT FOR RENTS.

BUT THAT'S A MINORITY OF THE

ISSUE.

>> IS IT REALLY A SMALL

MINORITY?

BECAUSE YOU THINK HOW IN THE

WORLTD CAN THEY AFRAID -- I'VE

EVEN STOREFRONTS SHUT DOWN A

MONTH AND A YEAR.

HOW IS THIS ECONOMICALLY THE

PROFITABLE FOR THEM.

>> RAFAEL THERE IS A REAL COST

TO A STORE EMPTY.

YOU'RE PAYING DEBT ON THE

PROPERTY, TAXES ON THE PROPERTY.

YOU WANT TO HAVE THE INCOME

STREAM.

AND RETAILERS ARE AN IMPORTANT

POINT OF THE INCOME STREAM.

IF THEY LEFT IT FOR TWO MONTHS I

CAN UNDERSTAND.

BUT YOU HAVE SEEN THE

STOREFRONTS BEEN VACATE ABOUT A

YEAR.

IT SEEMS TO BE A FUNCTION OF

RETAILERS STRUGGLING FIGURING

OUT HOW TO COMPETE WITH

eCOMMERCE AND LANDLORDS SAY

THERE IS TOO MUCH REGULATION,

LICENSING FEES.

RETAILERS ARE STRUGGLING TO PAY

RENT AND RENT TAX.

SO THEY'RE BURDENED WITH ALL OF

THAT FROM THE CITY AND STATE.

>> WELL THE MAYOR HAS PROPOSED

AS WE KNOW -- IT WAS NFLLY

PROPOSED PROCESS.

IN THE COURSE OF AN INTERVIEW.

HE BROUGHT UP THE IDEA AS I SAID

IN THE INTRODUCTION OF IMPOSING

POSSIBLY IMPOSING A VACANCY FEE

OR A VACANCY TAX FOR THE

LANDLORDS WHO KEEP THE

STOREFRONTS EMPTY FOR A WHILE.

BY THE WAY TALKING ABOUT

RESTAURANTS AS WELL.

>> TALKING ABOUT RETAIL.

>> SO FIRST OF ALL.

>> FIRST OF ALL, IF THE MAYOR IS

SERIOUS ABOUT THIS COULD HE AND

THE CITY GOVERNMENT DO THIS?

OR IS THIS SITCOM FOR ALBANY

TOO.

>> IT SEEMS LIKA I AM MAYOR HEAR

ME ROAR.

THIS HAS TO GO THREW ALBANY.

IT HASN'T BEEN PROPOSED BEFORE.

SINCE HE MADE THE COMMENTS.

IT WAS AN INTERVIEW LAST WEEK.

AND HE SAID CERTAIN THINGS

BEFORE.

IN NOVEMBER HE SAID -- THIS IS A

FAMSZ THING HE SAID IN NOVEMBER.

IF I HAD MY DRUTHERS THE CITY

WOULD DETERMINE HOW PRIVATE

PROPERTY IS USED.

AND THAT'S JUST NOT FEASIBLE.

IT'S A FREE MARKET ECONOMY.

YOU KNOW, LAST TIME I CHECKED.

THIS IS THE KIND OF THING THAT

LANDLORDS SAY IS THE FURTHER

PUNITIVE MEASURE.

IT DOESN'T SOLVE THE PROBLEM

WHICH IS RETAILERS MOVED ONLINE.

>> SO IF THE REAL ESTATE

INDUSTRY AND THE ELECTED

OFFICIALS OF THE CITY COUNCIL

AND MAYOR GOT TOGETHER TO SIT

DOWN TO DRAFT ONE OR TWO

IMMEDIATE STEPS WE COULD TAKE TO

AMELIORATE THIS PROBLEM, WHAT

WOULD THE STEPS DO.

>> THEY MIGHT INCENTIVIZE

FILLING UP STORES.

AND IF YOU GET IT RENTED THERE

WILL ABCUT ON TAX.

THAT COULD BE A SOLUTION.

BUT THE THINGS HAVE TO GO

THROUGH STATE LEVEL CHANNELS.

IT'S A LITTLE BIT DIFFICULT.

THEY HAVE NEVER -- I DON'T THINK

THERE IS GOING TO BE AN

ININCENTIVE OR CARROT IN THAT

WAY.

WHAT THE LANDLORDS HAVE SAID IS

FORGET ABOUT US.

WORK ON FIXING THE PROBLEMS FOR

THE RETAILERS BECAUSE RIGHT NOW

THEIR COSTS ARE TOO HIGH.

THEY ARE FACING YOU KNOW A

DRAMATIC CHANGE IN THEIR

BUSINESS.

>> SO IN CONCLUSION, IF THE

DYNAMIC STAYS AS IT IS -- WE

ONLY HAVE ABOUT 30 SECONDS?

HOW WOULD IT AFFECT?

WHAT WILL IT LOOK LIKE IN TEN

YEARS IF NOTHING IS DONE.

>> IN THE NEXT COUPLE YEARS

YOU'LL SEE MORE EMPTY

STOREFRONTS.

IN OVER TEN YEARS AS YOU SAID

THE MARKET WILL BEAR IT OUT.

RENTS WILL FALL TO A LEVEL WHERE

IT'S FINANCIALLY FEASIBLE AGAIN

RENT.

AND RETAIL -- THE EXPERIENCE IN

RETAIL WILL CHANGE.

IT'S GOING TO BE A HYBRID

BETWEEN IN STORE EXPERIENCE AND

SOMETHING SHOPPING ONLINE.

YOU MIGHT GO INTO A STORE AND

YOU MIGHT TRY SOMETHING ON.

BUT THEN THE COLOR OR THE SIZE

THAT YOU WANT WILL BE ONLINE

SHIPPED TO YOUR DOORSTEP.

>> WELL WE'LL SEE IF IT HA

HAPPENED.

THANK YOU SO MUCH FOR JOINING US

TO TALK ABOUT IT.

>> APPRECIATE IT.

THANK YOU.