A Frantic Few Days for Restaurants Is Only the Beginning

I spent the weekend chasing rumors and talking to bar and restaurant owners. The crash of stocks and the violent plunge into a bear market, which in another time would have these owners in a panic, barely came up. Instead they talked about surviving. Or not surviving.

“I’ve been telling my staff for three weeks, guys, get ready for a big hit,” Tom Colicchio said. “This is terrible. This is the end of the restaurant business as we know it.”

I spoke with Mr. Colicchio before the city announced the closing of all restaurants and bars for the time being, but after he’d announced that the restaurants he owned in New York were going to shut down for now. When it became clear to him that there was no way to keep them open, he’d been planning to call all his employees in for a company meeting so he could tell them in person. That would be the humane thing to do in any other time. This was a week, he decided, when bad news was best delivered by a mass email.

But there was no way to soften the blow for the city’s 250,000 or so restaurant workers. (The number comes from a 2019 study by the Center for New York City Affairs at the New School and the National Employment Law Project.) Most jobs are gone for now. Nobody knows how long the city will wait before allowing restaurants to open fully again, but many places won’t be able to survive even a short closure. The business is hand-to-mouth even in the best of times; last night’s receipts go straight into tomorrow’s payroll.

Facebook, Instagram and Twitter are full of appeals to diners to funnel restaurant workers a little cash by buying gift certificates or branded T-shirts, or by sending money directly or indirectly. Restaurants are for-profit operations, at least in theory, but, for those of us who can’t imagine life without them, they act more like cultural institutions. If you’d give money to keep the opera going, why not pay a little to keep the restaurant workers afloat?

People have been giving. There’s a lot of talk about supporting takeout and delivery, which are still legal in New York. This is wonderful. And it won’t be enough. It won’t even come close.

Because many of the fixed expenses of operating a restaurant haven’t stopped. There is still rent to pay, and taxes, like the New York State sales tax bill due on Friday. Those bills alone could crush restaurants in a matter of weeks, unless they have heaps of cash in reserve.

“Postponing or waiving the sales tax would be the fastest way to prop these businesses up without the government going out of pocket,” Jonathan Butler, a founder of Smorgasburg and Brooklyn Flea, said on Sunday. “The other huge factor is how they treat leases. Most people have some form of personal guarantee on their leases. I can’t imagine as a policy standpoint they want to come out of this crisis and have small business owners losing their homes because they had a personal guarantee. That’s an issue that could be addressed by policy in some fashion.”

In New York City, the de Blasio administration has made interest-free loans of up to $75,000 available to businesses with fewer than 100 employees if they can prove they’ve lost 25 percent of their revenue. This is a bit of a terrible-food-and-such-small-portions situation, some restaurateurs say; $75,000 won’t get most restaurants very far, and yet repaying it could be a major burden for owners, particularly if they have personally guaranteed the loan.

“There’s going to have to be a huge stimulus behind this to bail out small businesses,” Mr. Colicchio said. Industry leaders seem to be coalescing around asking for cash, perhaps in grants targeted to individual businesses, as well as aid for the hundreds of thousands of restaurant workers who suddenly have no income.

The major policy decisions of the past two weeks have been made in the interest of public health. But those decisions, combined with an economic crisis that is only in its early stages, could wipe out thousands of restaurants and bars, along with the farmers and florists and linen services they support.

I see two possible futures for restaurants. In one, state and local governments across the country move rapidly to help them survive the closings and get going again when that’s safe. In the other, bankruptcies cascade across the economy, and people are out of work in numbers this country has not seen since the 1930s.

Will a country that is still bitter about bailing out banks and airlines in the last financial crisis be ready to bail out ramen-yas, pupuserias, vegan sandwich counters, dosa vendors and natural wine bars? It depends on whether politicians and the public see the money as handouts to people who made bad business decisions (beginning, I suppose, with the decision to get into the restaurant business) or as a triage measure that will save the life of a national industry with sales of more than $800 billion last year.

If the world needed the banks in 2008, it needs the restaurants this year — as soon as it’s safe to leave our homes again. David Chang has a slogan to help sell America on the big fix we need. As he wrote in a tweet addressed to the mayor, the governor, New York’s two U.S. senators and Representative Alexandria Ocasio-Cortez:

“Restaurants are too small to fail.

Please act quickly.

Thank you.”

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