In response to COVID-19, New York State mandated that effective Monday, March 16th at 8:00PM restaurants and bars must close. Thousands of businesses have shuttered and laid off thousands of workers. Restaurants and bars are permitted to operate delivery and take-out food operations only, but most cannot sustain their operations for an extended period of time under these conditions.
In response, the NYC Hospitality Alliance, a not-for-profit organization representing thousands of restaurants and nightlife establishments in the five boroughs, presents the Restaurant Rescue and Save Nightlife Plan to support the city’s vital hospitality industry. The plan continues to be updated in response to the fluid and ever-changing nature of this pandemic. Please note the below is a sample and not an exclusive list of issues we are advocating for. We are committed to supporting our industry during the immediate crisis and throughout the complex and long-term recovery program that will be required. The points of the plan are listed in alphabetical order.
***Pending the potential passage of the ‘Coronavirus Aid, Relief, and Economic Security Act’’ or the ‘‘CARES Act” we have temporarily removed several of our priority issues from the below list, including, loans and grants to businesses and payments to workers. You may click here to learn more about the CARES ACT.
NYC Hospitality Alliance’s Restaurant Rescue Plan and Save Nightlife Plan
Delivery and Food Supply
Under the emergency powers of the Governor and the Mayor, they must mandate that fees charged by third-party delivery platforms to our local restaurants be capped at a maximum 10% of the order. Currently, third-party delivery fees usually range from 15% – 30%+ of a total order and would therefore amount to a windfall during this emergency when restaurants can only offer takeout and delivery. Many restaurants lose money on their deliveries during normal market conditions. We must preserve some profit for restaurants so they can serve New Yorkers who need food during this crisis and allow some employees to earn a paycheck. Restaurant takeout and delivery are a vital part of the city’s food supply chain.
Fair Work Week Law
New York City’s Fair Work Week Law requires certain restaurant employers to provide employee schedules two-weeks in advance and levies significant penalties for shift cancellations and modifications of hours within that time frame. Now that restaurants are forced to close or limited to take-out and delivery only, requiring a significant reduction in the need for employees, these requirements must be suspended.
Fine, Tax, Penalty, Utility and Insurance Premium Forgiveness
Suspend the payment of all insurance premiums (and, protect against a spike in premium related to COVID-19), utility payments, fines and provide cure periods to businesses for violations that do not pose an immediate hazard to the public and workers. All taxes, fees, premiums and fines must be suspended indefinitely until a thorough and thoughtful strategy can be implemented to address these payments. The includes but is not limited to Sidewalk Café consent and Liquor License renewal fees. Suspend the Commercial Rent Tax and property tax passthroughs on ground floor tenants like eating and drinking establishments.
Insurance Coverage
COVID-19 should be ordered to be a covered peril in business interruption insurance policies and claims must be paid to business as fast as possible. Government must back the insurance companies so that they can afford this coverage. In the alternative, an insurance relief fund should be created to provide timely payments to restaurants and nightlife establishments for business interruption and related matters due to mandated government closures.
License Renewals
All licenses and permits such as liquor licenses, sidewalk café licenses, Health Department permits, etc, must renew automatically without the payment of licensing fees until a strategy can be implemented to responsibly reopen such operations. They cannot afford thousands of dollars in licensing fees if they are closed.
Liquor License Applications
Under the State of Emergency declared by the Governor, give the State Liquor Authority (SLA) the authority to permit businesses to open with a Temporary License in New York City while its application is going through the lengthy backlog at the SLA, like they do for applicants elsewhere in the state. This issue is acute now that State employees are being sent home. Once this crisis is over, we need new businesses to open fast. They cannot be then waiting for a license to be issued.
Rent and Mortgages
While landlord mortgage payments to the banks have been suspended for 90 days, now we must address the commercial tenants’ rent obligations. Any business in the State of New York that is required to close (or limit their operations) by government order, must have their rent and related legal obligations forgiven for the period of time the order is in effect. Landlords and the banks that hold their mortgages must be supported during this period. Since rent is the largest fixed cost and must be paid even when a business is closed, this will alleviate a business’s immediate financial obligation while the public health crisis is trying to be contained. Once contained, this will allow businesses to reopen, which many will not be able to do if they owe months of rent.
Sales Tax
Restaurants, nightlife establishments and retail stores need an injection of cash to help them survive during the COVID-19 emergency. New York State and New York City should immediately convert these businesses’ sales tax remittance into grants. Since these monies are on hand, it will help them immediately, instead of applying for grants that have not yet been established.
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