A recent survey conducted found that many establishments in New York City are still facing a financial crisis from the coronavirus pandemic, with 9 of every 10 restaurants and bars in the city not able to pay their full rent.
What We Know:
- A survey, released this week by the New York City Hospitality Alliance, found that nearly 9 out of every 10 dining establishments had not paid full rent in August and that about a third had not paid any rent. Despite the opening of outdoor dining in late June, which was meant to provide a boost to the city’s roughly 25,000 restaurants and bars, many are still in financial free fall and closing for good.
“This commercial rent crisis isn’t going anywhere + it’s continuing to get worse, and we need to deal with it in a thoughtful way, otherwise, we’re going to see[…]more loss of our restaurants & bars, fewer jobs + opportunities for NYers” – @AndrewRigie https://t.co/ATMLmnoixS
— NYC Hospitality Alliance (@theNYCalliance) September 23, 2020
- The city prepares to allow indoor dining at a 25% capacity starting on September 30, but many in the restaurant industry are worried that this isn’t enough to reverse the steep economic slide of a key industry for the city. With a lack of tourists and office goers, many restaurants, especially in Manhattan, are on the brink of collapse.
- Based on the responses from 450 of the 2,500 businesses that make up the alliance’s membership, the survey found an uptick of those unable to pay their full rent. The 87 percent of restaurants that said they had not paid their entire August rent was an increase from the 80 percent that reported not paying all of their June rent.
- Owners are excited to be able to welcome some diners into the restaurants, albeit at a limited capacity, but worry that it won’t be able to offset the loss of outdoor dining when the weather becomes too cold or the city-permitted program ends on October 31. New York City Mayor Bill de Blasio shared that there would be an announcement in the coming days about the program, though it is unclear if that means there will be an extension. City Hall officials have not released further comments.
- One issue that arises as the weather gets colder, is New York City currently has the use of portable propane heaters banned, limiting the types of heating devices that can be used to keep outdoor spaces warm. Andrew Rigie, the executive director of the hospitality alliance, said he thinks restaurants should be able to use the portable propane heaters as the only heaters that are currently allowed have to be hooked up to natural gas lines, are expensive to install, and require special permits.
- Jack Sterne, a spokesman for New York Governor Andrew Cuomo, said that a moratorium on evictions was extended until October 20, to help businesses stay afloat. Sterne also confirmed that the state had allowed bars to sell cocktails for delivery and takeout. However, he also said that New York is following a “data-driven reopening strategy” that limits indoor capacity to keep infection rates low, saying the capacity will slowly increase as the state stays healthy. “This pandemic isn’t over, and everyone is trying to avoid a potential second wave that would force businesses to close down again,” Sterne said.
- Rigie cited several reasons for the continued financial difficulties restaurants are facing. While socially distanced outdoor dining allows restaurants to open and serve customers, it only brings in a fraction of what the restaurants’ normal income might be, thus making it even harder for them to turn a profit. Additionally, many restaurants are still trying to pay rent owed from the months when they were shut down, making it even more difficult to cover their current rent. 60% of the businesses that responded to the survey said that their landlords had not waived any portion of their rent.
- Last week, the New York City Council approved a law aimed at helping restaurants. The law allows restaurants to add a “COVID-19 Recovery Charge” to a customer’s bill, as long as the charge is “clearly disclosed” on the menu and bill and it can be up to 10% of the customer’s bill. The law will stand until 90 days after full dining is once again restored in the city.
Approximately 150,000 industry workers in New York City are still out of their jobs.
