City Councilman Tony Avella and several dozen representatives of New York City merchants' associations gathered in front of City Hall yesterday to protest "under-the-table" fees that landlords charge renters of commercial properties.

These fees, which merchants are expected to pay on top of rent in order to renew their leases, are common in Chinese communities and in other ethnic communities. Avella called on the judicial department to take action to investigate and bring an end to this kind of conduct.

According to a recent report issued by the Asociación de Bodegueros de los Estados Unidos – a national association of Hispanic merchants – these under-the-table fees are already a major obstacle to growth for the city's 200,000 small-business owners. One in three merchants in New York City must pay these fees, says the report.

According to the report, 86 percent of Hispanic merchants do not plan to expand their businesses or investments, and 92 percent are not interested in hiring new employees. When merchants were asked to explain why, almost 70 percent say it is because of the lack of security in the future of their leases. Sixty-eight percent of respondents say that they have recently fired employees or plan to do so, and 70 percent of them explain that this is because rents are too expensive. Fifty-three percent of respondents say they might have to shut down their businesses, and of these over 70 percent say it is because rent is too high.

In addition, 30 percent of merchants admit that when discussing the renewal of their leases with their landlords, they were asked to pay under-the-table fees.

In Chinatown, it is extremely common for landlords to charge under-the-table fees. For a 10-year lease, a typical restaurant may expect to pay over $100,000 in under-the-table fees. For a larger restaurant, fees may reach $200,000 even $300,000. City Council candidate, James Wu, says that under-the-table fees are rampant in Flushing as well, and have severely harmed the community's economic development. Wu called for the City government to take action to stop this problem.

In Hispanic communities, under-the-table fees may total 30 percent of a property's rental or sale price.

Avella sent letters to New York's Eastern and Southern District Courts last week, calling on federal prosecutors to undertake strict and thorough investigations of this problem, in order to bring an end to this plague of under-the-table fees.