Many NY City Restaurants on Verge of Closing: Report

Nearly half of New York City bars and restaurants that were open pre-pandemic may close permanently within a year due to the coronavirus pandemic, according to an audit released Thursday by State Comptroller Thomas DiNapoli.

If a third — about 8,000 — of the restaurants and bars close, the city would lose more than 100,000 jobs, the report says. If half, or 12,000, of the enterprises close, around 160,000 jobs will be lost.

The city brought back indoor dining at restaurants and bars on Wednesday with a limit of 25% of seating capacity plus additional requirements, including temperature checks, wearing masks, and leaving contact-tracing information. 

During the pandemic restaurants and bars largely closed or continued to operate for takeout and through delivery apps. 

But many have already closed and owners have been quoted as saying that they’ll have a tough time making the nut with a 25% capacity limit. 

“The industry is challenging under the best of circumstances and many eateries operate on tight margins. Now they face an unprecedented upheaval that may cause many establishments to close forever,” DiNapoli said.

The report shows how Covid-19 has devastated employment at eateries. 

In February 2020, more than 315,000 people were working in New York City’s restaurant industry. By April, restaurant employment had dropped 71% to 91,000 jobs as the city – hit hard by the pandemic – largely closed and locked down. 

“As rules loosened and outdoor dining was permitted, employment rose, reaching 174,000 jobs in August,” the DiNapoli report says.

In September almost 43% of restaurants and bars citywide received sidewalk-seating permits, including 50% of places in Manhattan, and over 40% for each of Brooklyn and Queens. But New York weather is turning cooler, and outdoor dining will not work well into the late fall and winter.

In June, the city launched the Open Restaurant Program, an initiative that issues special sidewalk permits to restaurants and expanded to allow owners to set up tables in the traffic-free streets. 

The DiNapoli report concluded that the initiative alongside economic reopening added 174,000 jobs in August.

But after the Paycheck Protection Program closed Aug. 8, the federal government has not provided enough financial support for small businesses, according to DiNapoli.

Taxable sales dropped by 71% during March, April, and May compared to the prior year.

The restaurant industry in New York City has over 20,000 eateries, providing more than 300,000 jobs. 

The industry paid $10.7 billion in total wages and delivered $27 billion in taxable sales in 2019. The restaurant industry contributed about 15 percent of total taxable sales citywide
that year, the report says.

In September, the New York State Restaurant Association said that two-thirds of New York State’s restaurants could permanently close by the end of the year.

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