As tenants move around, eye need be on retention.

When CBS television announced its decision to maintain its headquarters in New York City, banner headlines were filled with word of a lucrative tax abatement and incentives package put together by the City to retain them. The same was true for Morgan Stan-. ley, and the list could go on.

Treating New York's anchor industries favorably may make good sense over the long run, but it points to the one facet of commercial leasing that serves as the underlying foundation for the entire real estate industry.

Tenant retention is probably the most central problem confronting the real estate industry. It goes beyond making building upgrades, writing generous workletters or offering extended periods of free rent.

At present commercial real estate seems to be extremely active in reshuffling the current deck of tenants. Large transactions, of which Galbreath Riverbank has had a significant share, continue to be completed, but when you examine the bottom line you see that many of the 100,000-square-foot deals are being done by companies who formerly leased 120,000 square feet.

Smaller or mid-sized companies that close or relocate virtually get no attention at all.

Thus far the city lacks a coherent tenant retention program, and has effectively done nothing to address this issue with regard to smaller and mid-sized companies.

Larger, more prestigious firms are obviously in a better position to use their negotiating muscle to cut better deals with New York officials when reviewing their local presence or status. However, most concessions are agreed upon on an ad hoe basis and are won from the city strictly case-by-case.

Under this present system and without a coherent tenant retention program, businesses who have a strong commitment to New York wind up being penalized while those who flirt with leaving the City every few years are given tremendous rewards.

Smaller and mid-sized companies which generally have tighter budgets than do larger companies have little clout or leverage and are left to pay full price. As President Clinton stresses, it is from this sector of smaller businesses that most job creation and expansion comes,

This disparity should be cause enough for the City to take notice and reevaluate the way it does business. It is an issue that the Real Estate Board of New York's Economic Development Commission is tackling head-on under my chairmanship.

It is time to stop playing the politics of scarcity and begin dealing with the basic issues behind the current problem with New York business and real estate.

Before we can even begin looking to attract future tenancies, the core issue of maintaining New York's existing tenancy base must be addressed.

Last year, REBNY officially proposed a tax incentive program for all New York businesses that would cut a company's tax liability $500 for each new employee added to the payroll over the next three years. The credit would be renewable each year for 10 years, providing that the newly created jobs are still carried from year to year.

In addition, New York City currently has 14 business taxes. many that are peculiar to this municipality alone and serve as a disincentive for businesses to stay or relocate here. We must begin to reexamine our tax laws to formulate a wiser, more prudent system that encourages business, and thus real estate.

New York is a great place to live and an even greater place to do business. It is time that our city officials began acting like it and addressed the concerns that are sending many companies looking elsewhere. We must all get behind REBNY and send a strong, clear message to City Hall that an effective tenant retention program makes good sense as well as good business.