On March 17th, 2021, VOLS Microenterprise Project Director Arthur Kats testified before the New York City Council Committee on Small Business’ Preliminary Budget Oversight Hearing in support of the Commercial Lease Assistance (CLA) Program and extension of personal liability protections for small business owners. Read and watch the testimony below:
Chair Gjonaj and Members of the Committee on Small Business:
I can’t thank you enough for listening and talking to me. This is the first night I will sleep well in months.
That was my small business client’s response after my sincerest apologies to her for not having good news to share about legal options to save her shop.
My name is Arthur Kats and I am the Director of the Microenterprise Project at Volunteers of Legal Service, or VOLS, one of the three non-profit legal service providers partnering with SBS under the Commercial Lease Assistance (CLA) Program. Since 2018, CLA’s five public interest attorneys provide free legal representation to hundreds of lower-income small businesses in over 1,200 legal matters, focusing on communities most in need: small business owners of color, women, immigrants, those with limited-English proficiency, and businesses in outer boroughs. CLA is the only option for most of our clients to work with an attorney. Over the past year we have adapted to become a crisis management program and we get results. I urge you to ensure that funding for the CLA Program is restored, expanded, and baselined before it expires on June 30th so we can continue to serve our existing clients and meet non-stop need throughout our City.
I’d like to share just one example out of hundreds: A tattoo business spent the past decade cultivating an impeccable name in the industry. But the pandemic struck and because government orders kept personal services like the tattoo industry shut for months, our client accumulated six figures’ worth of rent arrears. Despite the business owner’s best efforts and 8 months of negotiations, the Landlord refused to consider any compromise whatsoever. Facing with an impasse with the potential for lifelong financial ruin, the client contacted SBS, was screened for CLA services, and was placed with attorneys on my team at VOLS. We immediately reviewed our client’s lease and advised them of options under the law. Within days, we negotiated a lease amendment with the landlord settling the arrears; we lowered the rent for the remainder of 2021; and we eased the restrictions in the client’s personal guarantee.
Since the beginning of the COVID-19 crisis, the CLA Program has seen a 10-fold surge in requests for help like this. Last year, the Program was eliminated from the budget and then reestablished in the fall, creating a gap in service at the time when businesses needed it most. CLA is a racial justice, an economic justice, and an eviction prevention program. With mass evictions looming when the moratorium expires, today we are again seeking your commitment to not only restore, but to expand sorely needed legal services for small businesses before it’s too late.
In addition, we strongly support Intro T2021-7265, which would further extend personal liability protections for small business tenants at risk of personal financial ruin and bankruptcy because of closures and business losses incurred through no fault of their own. We supported the Council’s initial introduction and first extension of these protections in 2020. VOLS is fighting alongside SBS and the Law Department as a friend of the court to ensure this legislation stands.
We thank you for your partnership, service, and support for small businesses in our city. I urge you to restore, expand, and baseline the Commercial Lease Assistance (CLA) Program.
Sincerely,
Arthur Kats,
Director, Microenterprise Project
Volunteers of Legal Service (VOLS)
Watch the full testimony below, which starts at 1:56:34:
Learn more about how to lend your support for the CLA program here: https://volsprobono.org/callthemayor/