New York City Restaurants Can’t Pay Rent, Advocates Urge Passing of The Restaurants Act
COVID rates are rising, temps are falling, and it’s not getting any easier for restaurants in New York City. A new survey by the NYC Hospitality Alliance found 88 percent of respondents could not pay full rent in October, up from previous months’ reports and a signal that the sector’s crisis is far from over.
According to more than 400 survey-takers representing restaurants, bars, and nightlife venues across the five boroughs, 30 percent of these small businesses could pay no rent at all during October; 59 percent of tenants’ landlords did not waive or reduce rent; and 83 percent of businesses have been unsuccessful in renegotiating their leases as a result of the pandemic.
Key findings of the report include:
88% of respondents could not pay their full October rent.
59% of landlords still haven't waived rent during the COVID-19 pandemic.
Of the 41% of landlords that waived rent during the COVID-19 pandemic, less than 1/4 waived more than half the rent.
83% of respondents could not renegotiate their lease due to the COVID-19 pandemic.
What’s more, restaurateurs who could not pay full rent in October are also likely to owe back rent for September, August, July and previous months, according to the Alliance. “These business owners have amassed significant personal debts, which impacts their prospects of saving their businesses and starting new ventures in a post-pandemic New York,” according to their report.
Advocates are urging the federal government to respond and pass The Restaurants Act (The Real Economic Support That Acknowledges Unique Restaurant Assistance Needed to Survive (RESTAURANTS) ACT OF 2020) and the Saves our Stages Act (a similar program to help save live theater and music venues) to stem the carnage on restaurants, and the employees and patrons who rely on them.
The Restaurants Act provides $300 million — $60 million of which is set-aside for outreach to traditionally marginalized and underrepresented communities, with a focus on women, veteran, and minority-owned and operated eligible entities.
Key provisions include:
The program will be administered by the Department of the Treasury and available to food service or drinking establishments, including caterers, that are not publicly traded or part of a chain with 20 or more locations doing business under the same name; • Grant values will cover the difference between revenues from 2019 and projected revenues through 2020;
Paycheck Protection Program or Economic Injury Disaster Loan funding recipients must subtract funds received that do not need to be paid back from the maximum Restaurant Stabilization Grant value;
Restaurant Stabilization Grants do not need to be paid back and funding is made available through 2020;
Eligible expenses include: payroll (not including employee compensation exceeding $100,000/year), benefits, mortgage, rent, utilities, maintenance, supplies (including protective equipment and cleaning materials), food, debt obligations to suppliers, and any other expenses deemed essential by the Secretary of the Treasury;
Recipients must certify that current economic conditions make the grant request necessary, that the funds will be used retain workers, maintain payroll, and make other payments (as specified above), and that the recipient is only applying for and would only receive one grant;
If a restaurant permanently ceases operations before the end of 2020, unspent funds must be returned. If the grant award exceeds the actual end-of-year revenues the grant is converted to a loan with a 10-year term at 1% interest;
The first 14 days of funds will only be made available to restaurants with annual revenues of $1.5 million or less to target local small restaurants, particularly those that are women, veteran, or minority-owned and operated eligible entities that are owned or operated by women or people of color.
“Going on eight months, more than 24,000 restaurants, bars and clubs citywide that are so critical to New York’s economic and social fabric have been in dire straits,” said Andrew Rigie, executive director of the NYC Hospitality Alliance.
“Half of the industry’s 300,000 employees are still without jobs, and those numbers can’t improve while more businesses are permanently closing and leaving empty storefronts in our neighborhoods. With many venues still closed, new restrictions further limiting the operating hours of those open, and cooler weather making outdoor dining less feasible, New York City’s hospitality industry simply cannot wait: The Restaurants Act and the Save Our Stages Act need to be immediately passed by the U.S. Senate and enacted by the President without delay.”
Read entire report here.