NYC Hospitality Alliance executive director Andrew Rigie describes COVID-19 as “four near fatal months of economic disaster.” And center for Big Apple restaurants is rent, often the largest fixed cost for small businesses in one of the country’s most cutthroat markets.
“Our small businesses urgently need support on rent, so government officials, landlords and banks need to work together to find a solution,” he said in a statement.
The NYC Hospitality Alliance released a survey Wednesday detailing the extent rent continues to weigh on restaurant, bar, and club owners during the pandemic.
Now compounding these issues, Gov. Andrew Cuomo just announced indoor dining won’t be allowed to resume when NYC reaches Phase 3 of its reopening next week. He said the city would wait “until the facts change and it is prudent to open.” The decision arrives as New York’s number of COVID-19 hospitalizations remained below 900 for four consecutive days.
But in a press conference, Cuomo said, “there are storm clouds on the horizon,” as cases spike around the country in markets with advanced reopening plans. New York is requiring people from 16 states to quarantine for 14 days upon arrival, including California, Georgia, Florida, Texas, and the Carolinas.
“We particularly see problems revolving around people going back to bars and restaurants indoors. Indoors is the problem more and more. The science is showing it more and more,” he said, per CBS New York reports. “So I want to make very clear: We cannot go ahead at this point in time with indoor dining in New York City.”
The barrier places another unknown into the pot of already struggling NYC restaurant owners. The notion of 100 percent occupancy, the Hospitality Alliance said, feels “very far off.”
“Restaurants and bars have been making enormous financial sacrifices for four months, and their survival now depends on compensation reflective of those losses,” Rigie said. “We respect the government and public health officials’ decision to postpone the anticipated July 6 reopening of indoor dining, but the longer neighborhood restaurants and bars are forced to be closed, the harder it will be for them to ever successfully reopen. This makes it even more urgent to forgive rent, expand outdoor dining and enact other responsive policies to save our city’s beloved small businesses and jobs.”
The Hospitality Alliance polled 509 restaurants, bars, and clubs. Most of which admitted they were in a bad bind.
Rent was the focus.
Only one in five respondents reported paying their full June rent.
“In June 2020, your business expects to pay how much of your rent?”
- Pay all: 19.8 percent
- Pay some: 31.4 percent
- Pay none: 36.1 percent
- Not sure: 12.6 percent
Of the 31.5 percent who expect to pay some of their June rent, almost nobody expects to dole out the full amount.
- Less than 50 percent: 35 percent
- Half: 55 percent
- Greater than 50 percent: 10 percent
And there’s not a ton of relief coming from landlords.
“Has your landlord waived any of your rent in relation to COVID-19?”
- Yes: 26.5 percent
- No: 73.5 percent
In that 26.5 percent, what percentage of rent was waived due to COVID-19?
- 1–25 percent: 16.7 percent
- 26–60 percent: 50.8 percent
- 51–75 percent: 13.6 percent
- 76–100 percent: 18.9 percent
The respondents were also asked if their landlord deferred any of the rent in relation to coronavirus.
- Yes: 39.3 percent
- No: 60.7 percent
Only 10.4 percent said they’ve renegotiated their lease amid crisis times. A shade under 28 percent (27.7 percent) claimed to have held “in good faith negotiations.” About 62 percent simply said they hadn’t. Here are some tips on how to do so from Alex Gray, a tax accountant for Mize CPAs Inc.
“Whether it is direct rent subsidies, deferring rent now and extending payments on the back end of leases, and other creative ideas, we are in the midst of a rent crisis and need action now,” Rigie said. “We’re eager to work with lawmakers and industry leaders on any tangible plans that provide immediate relief to struggling restaurants and nightlife venues across the city before it’s too late.”
