Today, the City Council is expected to pass a suite of bills critical to saving the restaurant industry in New York City. The bills cap delivery fees, waive rent on sidewalk cafes, prohibit personal liability on commercial leases and impose fines for harassment based on COVID.
“If our restaurants are not at the core of our recovery, I don't know how this city comes back,” said Speaker Corey Johnson at the press conference held by Zoom this morning. “Restaurants are stepping up, serving food to our front line workers, donating to nonprofits and so much more. We have to step up for them so that they come back even stronger. We will get through this. I look forward to passing these bills with my colleagues.”
“We will come back. but it's going to take time and we need to do everything we can to support our restaurants and this legislation goes a long way to doing so,” said Andrew Rigie, executive director of the NYC Hospitality Alliance. “We are not just saying we love our restaurants. We are taking action and passing bills that will help them survive during this crisis.”
“Today is an historic day,” said Rob Bookman, legal counsel to the NYC Hospitality Alliance. “We have worked with many city councils who talk the talk, but this Council is walking the walk. I am so proud and grateful to the leadership of members of this council for this legislation.”
The Council is expected to pass these bills today; the Mayor is expected to sign them into law shortly thereafter.
Capping Delivery Fees
Intro No. 1908-B caps third party delivery platform fees; a companion bill, Intro 1898, eliminates fees for telephone orders with customers that did not result in an actual transaction during the call.
Previously delivery fees were 30%, a near death knell for restaurants operating on such seriously reduced revenue. This bill caps delivery fees to 5% if the restaurant delivers the meal itself at to 15% if it uses the delivery app's personnel to deliver the food. The delivery caps are in effect during states of emergency when restaurants are prohibited from offering food for consumption on-premises, plus an additional 90 days thereafter. Violations of the prohibitions in this bill would be subject to civil penalties of up to $1000 per restaurant per day enforced by Corp Counsel in a civil suit.
“The delivery fees were killing my business and so many small businesses," said Melba Wilson, owner of Melba’s Restaurant. "When I look at a cap at 15%, this hopefully allows me to possibly not just feed my community, that I was born and raised in, but also to bring back some of my employees. I am a single mom, and I started from bottom as a cashier. I got into this business because of passion for what I do. When you take a restaurant from a community you tear down the fabric of the neighborhood, and you take jobs from farmers, vendors, cooks, waiters, and chefs. Capping delivery fees and transmission fees gives us a chance to survive.”
Waiving Sidewalk Consent Fees
Intro 1916-A waives so-called sidewalk consent fees, the rent charged by New York City, the landlord of all sidewalks across the city. “So many businesses pay this sidewalk fee, but usually spread it over an entire year, and there is no revenue to pay it at this time,” said Council Memeber Andrew Cohen, the sponsor of this bill, at the Zoom press conference. “Having sidewalk cafe space can make a difference in viability of a restaurant. This legislation makes sense and addresses a targeted need.”
The bill will no doubt support restaurants looking to move tables outside for social distancing and in good weather, without incurring additional rent, an impossible additional financial hardship. “This bill is very important for all of those restaurants who have sidewalk cafes and supports businesses operating outdoors which is critical for many who will feel more comfortable eating outside, and for restaurants trying to make more space for diners inside and out,” said Rigie. “There is a clear need to use outdoor space and reimagine the streetscape. If we can use outdoor space in spring and summer and into fall, it will greatly help them generate revenue desperately needed and bring some vitality and energy back to the city.”
Waiver of Personal Liability in Commercial Leases
Intro 1932 will prevent commercial landlords from going after business owners’ personal assets after a default on a lease caused by COVID closure. Threatening to or attempting to enforce such a provision would also be considered a form of harassment.
The issue of personal liability is one that was brought to light by Gabriel Stulman in a recent letter printed on Eater. “I got no problem with adversity in front of me,” said Stulman at the Zoom press conference. “I can take it on the chin. But I want to make sure that if I am not able to get through this and I cannot sustain my business because diners are still concerned about going into small restaurants, or because I have to reduce capacity, and I cannot survive, that my landlord can't waive a contract in my face and say after I am done cleaning out your business bank account, I am going to go after your home and your personal bank account.”
Council Memeber Carlina Rivera, sponsor of this bill, said that all restaurants must be safe from having their personal livelihood threatened. “Restaurant owners should not have to lose their life savings and personal assets because of this crisis,” she said. “Protecting their personal assets ensures that one day they may be able to return and relaunch or create new thriving businesses. Restaurants should know that we have their back.”
A companion bill, Intro 1914-A, would make threatening a commercial tenant based on their status as a COVID-19 impacted business or person, a form of harassment punishable by a civil penalty of $10,000 to $50,000. “My constituents are already undergoing this type of harassment,” said Rivera. “I am very proud to be a part of this legislation, but equally sad that we have come to this place where these bills are a necessity for our small businesses.”