New Rent Study Paints A Bleak Picture for NYC Restaurants and Bars

When New York City entered Phase 2 of reopening on June 22, restaurants were permitted to offer outdoor dining to customers. Indoor dining was expected to begin on July 6, when the city would join the rest of the state in Phase 3. However, on July 1, Mayor Bill de Blasio announced indoor dining would be put on hold indefinitely, citing states like Florida and Texas that had seen COVID-19 cases rise dramatically after allowing restaurants to begin indoor dining.

A new study shows just how devastating these recent developments have been for the hospitality industry.

The NYC Hospitality Alliance surveyed 471 owners and operators of restaurants, bars and nightlife establishments across the city for its July 2020 Rent Report. Data was collected between July 15 and July 28. The study found that 83% of respondents did not pay their full rent for the month of July. A nearly equal amount were split between paying some rent (36.6%) and paying none (37.4%). Only 17.1% responded that they were able to pay rent in full for the month.

Of the respondents who replied that they were able to pay some of their rent, 53% said they were able to pay half, while 29.8% expected to pay less than half. Once again, a little over 17% said they would be able to make the payment in full.

Another element adding to the difficulties of NYC bar and restaurant owners: Uncompromising landlords. Only 28.6% of respondents reported having landlords who waived any of the rent because of the pandemic. Of those respondents, 42.2% said their landlords waived 50% of the rent, and 31.2% said more than 50% was waived. 71.4% of respondents reported their landlords refusing to waive any portion of their rent.

Additionally, 61.1% of those surveyed said their landlord has not deferred any rent in light of COVID-19, and only 10.2% were able to renegotiate their leases. A little over one-quarter of respondents said they were in “good faith” talks with their landlords about renegotiation.

“While complying with the necessary pause, our industry has been uniquely and financially devastated,” said Andrew Rigie, executive director of the NYC Hospitality Alliance. “Small businesses urgently need solutions from government leaders at the city, state, and federal level, inclusive of extending the moratorium on evictions, extending the suspension of personal liability guarantees in leases, pausing commercial rent taxes, providing landlords with needed support, and infusing small businesses with enough cash to weather the storm.”

Bars and eateries have encountered even more difficulties as the weather became warmer and new coronavirus cases were reported to drop in May. A number of viral videos on social media showing crowds of people without masks packing a stretch of Steinway Street in Astoria, Queens, has led to several liquor license suspensions at establishments across the five boroughs.