When Mayor Bruce Harrell decided to lift Seattle’s residential and commercial eviction moratoria, he said he set out to balance the needs of tenants and landlords. But it looks like his decision will simply readjust the scales in favor of landlords, even for small businesses.
After I asked for the mayor’s plan for small businesses facing eviction, a spokesperson for Harrell said he would work with the city’s Office of Economic Development (OED) to “convene a small group of impacted BIPOC-owned businesses to hear directly about how the moratorium has affected their business and to get their insight and perspective toward immediate needs and future policies.” The last time he convened a small group of stakeholders, he ended the moratorium in a statement that failed to include any advice for small businesses left high and dry.
Councilmember Sara Nelson, who has positioned herself as a champion for small business, did not respond to a request for comment on how she will support commercial tenants when the eviction moratorium ends.
A spokesperson from the OED – which doled out federal money to small businesses during the pandemic for rent, wages, equipment, and more – said it supported about 1,500 small businesses in five rounds of grants, and it planned to increase funding to expand the scope of services offered while working with the mayor to “help respond to needs as we navigate this next phase in economic recovery.”
Meanwhile, to help commercial tenants deal with some legal issues related to COVID-19, the agency contracted with Communities Rise, a nonprofit that offers free, 60-minute, remote consultations with an attorney. However, according to its website, that group cannot help with evictions where there is a court case or legal papers starting a court case. They did publish a nifty toolkit about how to amend a commercial lease, though. I asked them about supporting small businesses after the moratorium ends and I will update if I hear back.
An uncertain future
Hopefully the Mayor’s small group gives him an idea of the number of small businesses that could be on the brink of eviction, because that number remains elusive.
The OED could not provide an estimate of the number of Seattle businesses that fell behind on rent during the pandemic. The Seattle Chinatown International District Preservation Development Authority (SCIDPDA) didn’t have a good idea for the CID, either. The same goes for the U-District Business Improvement Area, which represents 500 businesses in that neighborhood.
But conversations with those groups, small business owners, and tenant advocates suggest that the best eviction protections for small businesses include a nice landlord, lots of COVID relief money, and a lawyer.
To stay afloat over the last couple years, Tim Dooley, who runs the Blue Moon Tavern in the U-District, relied on federal funding, the new tenant protections passed by the last council, and, importantly, his close relationship with his landlord and their nearly unheard-of 30-year lease.
After the pandemic caused the famous dive to fall behind on rent, Dooley applied for small business grants and worked out a repayment plan with his landlord in accordance with the city’s new protections. Dooley reopened in the summer of 2021 thanks to that agreement and to a ~$220,500 injection of funds from the Shuttered Venue Operators Grant (SVOG). But he said the Blue Moon’s case was the exception, not the rule. If his relationship with his landlord was less amicable, then things would have been more difficult.
That said, in general, landlords have more of an incentive to keep commercial tenants than residential ones, according to Don Blakeney, the executive director at the U-District Partnership.
His “cynical side” said it’s a lot more complicated to get a commercial tenant into a space. It can take a building owner a year to sign on a new commercial tenant, whereas a residential landlord just has to clean up the place and let the housing crisis do the rest.
SCIDPDA’s director of community initiatives, Jamie Lee, more or less said the same thing. She noted that the development authority, which is a landlord for both commercial and residential tenants, was drawing up repayment plans for its commercial tenants, some of whom owe up to $30,000 in back rent, partially because it wants these businesses to be successful, but partially because it is more difficult and costly to fill their spaces.
But even with repayment plans and COVID relief dollars, some small businesses may not be able to generate enough money to pay back debts in time and to stay afloat. And the federal Small Business Association programs that helped these businesses reopen – including the SVOG, the Paycheck Protection Program, and the Restaurant Revitalization Fund – no longer accept applications.
“There's definitely not as much funding for commercial as there has been for residential,” said Lee.
Bad vibes with the landlord and an empty wallet = court
If the funds come up short and the protections fail for commercial tenants, as housing advocates believe they will for residential tenants, then it's off to court. But unlike low-income residential tenants, commercial tenants do not have a right to counsel, according to Edmund Witter, managing attorney at the Housing Justice Project. However, because they are registered as corporations, commercial tenants must hire a lawyer. That probably makes sense for soulless corporations, but for your favorite family-owned Thai place? Jeez.
This article mentions a bill that gives small businesses protections. CM Herbold's office just notified me that they are concerned small business owners are unaware of these measures. If you're a struggling small business, here are the protections you have from council:— hannah krieg (@hannahkrieg) February 24, 2022
Witter said he does not worry for the tenants HJP works with but rather for the ones who do not access its help, such as commercial tenants, because the lawyers who do right-to-counsel work simply do not have enough time for people who are not directly at risk of losing their home.
During the course of his career, however, he has taken on a couple of small business evictions because, frankly, he felt sorry for the owners. His advice for small businesses facing eviction court? “God help them.”