Outdoor dining to return next summer — for restaurants that survive

Mayor de Blasio announces “a new New York City tradition”

TRD New York /
Aug.August 03, 2020 05:21 PM
Mayor Bill de Blasio announces “a new New York City tradition” as outdoor dining is set to return next year (de Blasio by Lev Radin/Pacific Press/LightRocket via Getty Images; background by ANGELA WEISS/AFP via Getty Images)

Mayor Bill de Blasio announces “a new New York City tradition” as outdoor dining is set to return next year (de Blasio by Lev Radin/Pacific Press/LightRocket via Getty Images; background by ANGELA WEISS/AFP via Getty Images)

Andrew Moger’s days are filled with tracking restaurant closures around the city.

The CEO of BCD Development, a restaurant-focused real estate brokerage and advisory firm, is on the lookout for vacancies — and expects a spate of them.

“You take these restaurants that signed very expensive leases and were barely doing well pre-Covid, and then you add this type of devastation, it shouldn’t surprise anybody that those places aren’t going to make it,” Moger said.

In this brutal environment for eateries, Mayor Bill de Blasio cheerily announced Monday that outdoor dining will return by next June, calling it “a new New York City tradition.”

How many remain around to enjoy it is anyone’s guess, as 83 percent did not pay full rent in July and 37 percent paid no rent at all, according to a survey of 471 establishments by the New York City Hospitality Alliance.

Unlike restaurants and bars in the rest of the state, which have been allowed to resume indoor dining at 50 percent of capacity, those in the five boroughs can only serve customers outside or via takeout and delivery. No timetable has been set for that to change.

“While complying with the necessary pause, our industry has been uniquely and financially devastated,” Andrew Rigie, the executive director of the NYC Hospitality Alliance, said in a statement.

Few have managed to renegotiate leases or relief from their landlords. Seventy-one percent of landlords would not waive portions of rent, 61 percent would not defer rent payments and 90 percent would not formally renegotiate leases.

Of those who did waive rent, 73 percent wrote off more than half of it.

Their landlords are also at risk; those unable to make mortgage payments could lose their properties to foreclosure.

“We’ve told all of our restaurant clients to be patient because truthfully, we think there’s going to be a lot more pain on the landlord side,” Moger said. “I don’t think that any restaurant tenants should be signing an amendment to their lease at this point. I think it’s too soon to tell what this is going to look like.”

Outdoor dining was allowed before Covid via sidewalk cafes, but the permitting process took months and provided little space, so as not to impede pedestrians. The new system that de Blasio extended Monday streamlines approvals and in some cases allows for eateries to take over parking lanes.

Still, the percentage of restaurants and bars who reported paying rent on NYC Hospitality Alliance surveys edged down last month. Nearly 20 percent of eateries paid all of June rent. For July, that number dipped to 17 percent.

While the survey shows that outdoor dining may not be enough to make full rent, the initiative, which began in June, has helped. Only 13 percent of restaurateurs paid all of their May rent.

Their immediate future may not be bright, either. Stimulus checks have been spent, federal unemployment benefits expired last week, August is historically an awful month for restaurants, and city protections of commercial tenants expire in September. It’s looking like a long winter.

On top of that, Gov. Andrew Cuomo has been threatening to revoke what few privileges New York City restaurants have been given, citing social distancing violations at a small percentage of the establishments visited by state inspectors in recent days.

In July, while the rest of the state was allowed to seat some diners indoors, restaurants in the city had indoor dining postponed indefinitely just days before it was to start. Bars suffered a blow when Cuomo announced that they could only sell alcohol to customers also being served a meal.

Contact Sasha Jones at [email protected]


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