New York City, as we all probably know, is one of the most expensive real estate markets in the country. It’s hard to pay the rent there even in the best of times, which these are not. Since stay-at-home orders began in March, bars and restaurants have had to depend on takeout orders and sidewalk service to make ends meet.
A survey by the NYC Hospitality Alliance of 450 restaurants found that in June, 80% of them couldn’t afford to pay full rent. That number went up to 83% in July.
Of those restaurants that said they couldn’t pay full rent in August, nearly half said they’d be able to pay 50% of their current rent, with another 30% saying they could only pay less than 50%. About two-thirds of those surveyed said their landlord had deferred some of their rent payment during the crisis, but almost 60% say they haven’t been able to renegotiate their leases with their landlords.
Various attempts made by the city to keep restaurants open, such as returning to indoor dining at 25%, won’t be nearly enough to make up for the lost income. “There’s no way small business owners are going to be able to pay back multiple months of missed rent, nor will they be able to pay 100% of pre-pandemic rents anytime soon,” said Andrew Rigie, the executive director of the NYC Hospitality Alliance. “In perspective, it was difficult enough for New York City restaurants to survive pre-pandemic when they had 100% occupancy.”
Landlords need the income, too, and many of them are becoming impatient with their tenants, although Governor Andrew Cuomo has extended the eviction moratorium until October 20. To make matters worse, cold weather is coming, which will mean the end of outdoor dining; the official end date for that is October 31.
“We’ve suffered incredibly, we’ve lost more than half our savings so far,” Salil Mehta, chef-owner of two restaurants, told Gothamist. “How do we resolve landlord-tenant disputes at this time? Some landlords are being helpful, some are playing hardball. The big underlying issue is people not being able to make rent during this time. We’re used to paying $40-50,000 rent even with 25 seats, and I don’t think we can afford to pay $20-25,000 in rent now, after our landlord discounts us. I think the only way any restaurant will survive is through the help of their landlord, that they all understand we’re in it together. If they help the tenant out, the tenant will survive. But the city hasn’t helped landlords much either, so it trickles down to restaurants and trickles down to the economy.”
Another report from the New York State Restaurant Association found that two-thirds of New York restaurants expect to close by the end of 2020; of those, half expect to shut their doors by November, when outdoor dining ends. According to yet another report, this one from the city comptroller, 1,289 restaurants closed between March 1 and July 10.
The only thing that will stop all this loss, advocates say, is the passage of the RESTAURANTS Act, a bipartisan federal bill that will create a $120 billion fund to help small, independent restaurants get through. Politicians have been fighting about everything. But can they agree to get this one damned thing done that will actually help everyone?