Retailers at the city-owned East Broadway Mall in Chinatown say they've been forced to pay costly cash bribes or "key money" in order to move in or extend their leases with the building's management company. Local activist Steven Wong tells City Room the key money shakedown has been part of life in Chinatown for decades, and is also called "yum cha," or "dim sum money." The payoffs can range from a few months' rent to hundreds of thousands of dollars.
A spokesperson for the city has promised to launch an investigation into the allegations, which have come to light because one tenant, Mei Rong Song, accuses the management company of trying to evict her after she refused a quadruple rent increase, to $12,000 for her 250-square food space. But Wong says they're evicting Song because she's illegally partitioned her stall. And the management company, the East Broadway Corporation, contends she's charging her subtenant more than her total lease. (Song says the landlords always knew about the partition because her store faces onto the street.)
East Broadway Corporation's lawyer emphatically denied the key money practice, but says, "I can’t speak for the tenants." It seems illegal subleasing is common in the mall, as it is throughout Chinatown. Norman Siegel is now involved, and tells City Room, "A lot of people are paying in cash. It’s all oral. It’s all by word of mouth. That invites serious questions...There is no rule of law." But who will break that to Song, who says the management doesn't intimidate her: "I know American laws — why should I be afraid?" Channel 7 has more on the story.