Cuomo’s wild, PPP redux and SLA follies

Originally Published : July 30, 2020


Governor Cuomo needs to chill out. He’s screaming about bar and restaurant owners not following the rules and how he’s gonna shut everyone down and he’s recruited state employees and deputized them to conduct surprise gestapo like inspections and he’s berating all of his underlings and he’s just mad, wild and out of control. Give that man a cocktail or a joint or find him a date or something because he is way too wound up right now. Breathe, Mr. Governor, Breathe.

Look, we understand that overcrowding is dangerous and there are some idiot owners who are acting irresponsibly and they should be punished but most of us are doing our best to follow the rules and keep things safe so don’t take it out on the entire industry.  Here’s an idea.  How about you do your job and enforce the rules and target and shut down the dummy operators and their scofflaw patrons and leave everyone else alone?  We don’t need you as the enemy right now. You were doing so good when you were our friend so can we please make up and be friends again?  We need you on our side because we think, despite your recent manic episodes, you may actually care about us.  

And can we just accept that the imbeciles in DC don’t give a shit about the hospitality industry and stop beating our heads against the wall? Our dearly elected in DC are not gonna bail out the restaurants.  Every day, we are turning in keys and we are losing great restaurants run by hard working New Yorkers and our politicians pout and posture and bicker and bite and we are left with nothing that will really help us.  The most it’s looking like is a second wave of PPP loans with that same 60% payroll component but with less restrictions on how to use the remaining 40%.  That’s the big bailout. What a joke. 

Here’s how the political theater is playing out. The R’s are infighting and can’t agree on their own plan and Queen Bee has lost control of his hive.  Speaker P and Chuck have significant leverage now and the D’s are digging in and will hold fast until they get what they want from their 3 Trill House Bill.  Good for D’s but is it good for the industry?  How do we get the D’s to recognize and demand a bailout for us? How will helping the industry show up in positive poll numbers for them?  The elections are right around the corner and they all want to claim victory and be the heroes so they and their soft-boiled egos can get reelected. 

And what if we don’t get the relief that we need?  When are we gonna take it to the streets?  Who is gonna step up and make some noise and grab the attention of the press and the public?  At what point is playing nice and by the rules no longer justified?  Are we just gonna let Landy and our dearly electeds and the big chains and the bankers and the billionaires just roll over us?  I think not.

My man Joseph also has some things to say about all this so here he is….

Joey Regs Says:

So much to say, and not much of it is good…
Just in case this was unclear previously, the Governor will not let New York State (any part of it) spike again.  And he will do whatever it takes to achieve that singular goal-seemingly regardless of collateral damage of any kind.  That means cutting off the liquor service allowances, the outdoor seating, and any other “special” benefit within his purview, that has probably helped keep you afloat.  

Keeping us safe is his job and kudos to him for righting the ship in New York with aggressive planning and painful attention to detail. However, he must balance keeping us safe with giving our businesses the support that they need to survive.  Another shutdown for all of us, as a punitive measure for those disobeying the rules would be a disaster.  
I’ll tell you what’s messed up though; deputizing random State officials from various agencies, with no field training, to go out and “spy” on restaurants and bars in NYC.  Attacking people in your own administration and publicly declaring their incompetence is also not the answer.  Putting the brakes on new initiatives that would support and assist those in the hospitality industry in NYC just because a few bad actor bar-owners got carried away last weekend is also of no help to any of us.
As I mentioned above, the Governor is traditionally rather limited with respect to the number of enforcement agents that he can send out into the field.  The State Liquor Authority usually leads the charge here, but that’s 30 agents FOR THE ENTIRE STATE.  Not nearly enough for the type of enforcement Cuomo is looking for.  So, he has deputized workers from other State agencies to go out into the field and conduct inspections, review social distancing plans and to report back.  Should they find violations of social distancing rules, violations of liquor authority rules, YOU WILL BE FINED OR CLOSED.  So, in other words, you have people from the DMV, homeland security state office, etc going out to your restaurant, in plain clothes, with no official credentials, checking out your operation.  Sometimes they’re cool; sometimes they’re very not.  We’ve already received a few of these reports over the last week alone, so please be careful and be vigilant.  These folks are out there and they’re checking on you – even if you don’t realize it.
The Governor has also caused the SLA to ramp up their prosecutorial processes-specifically the “Summary Suspension” proceedings.  Just so everyone is aware, the SLA has the ability to call “Special Full Board Meetings.”  And at these meetings their prosecutors can present a case to have a premise summarily suspended – meaning they come and take your liquor license in the name of public safety and welfare, and they keep it until you’ve gotten your due process, hearing, etc. Sometimes these hearings result in you getting your license back, but just having to pay a tremendous fine, but sometimes it’s gone forever.  These special meetings are generally pretty rare. However, they’re becoming less and less rare lately-with a number of them happening last week alone.
Remember Cuomo’s Three Strikes Rule?  Well, State agents are doling out all three at once in certain instances, so please don’t get cute and think you can do something wrong until you get caught and then fix it.  The Governor is not playing around.
The big takeaways from my section of this newsletter today are that you need to make sure that you’re prepared to operate responsibly and that you need to be ready for inspections, because they’re coming.  And the stakes are high.  To that end, our friends in NYC government have put together some pretty solid guidelines for “What to Expect When You’re Being Inspected.”  You can access the document here: What To Expect When You’re Being Inspected.

Special shout-out to our Nightlife Mayor, Ariel Palitz, who’s doing a heck of a job behind the scenes for our industry.  She’s populating her page with some additional helpful resources as well.  You can link to that here: NYC Office Of Nightlife

Please pay attention.  Please operate responsibly.  And if you see an operator who is NOT following the rules, tell them to get their shit together. 
Hopefully I’ll have happier news to pass along next time.
Joey Regs out.

Insurance Update by Eric Wiener, Madison Avenue Brokerage

It has been some time since we’ve weighed in with Insurance content for the newsletter. While we had hoped we would be in a very different place by now it is evident that things are still very precarious as the rules and needs keep changing.  It’s a hard time for our F&B insureds as they pivot between closure and being operational. Below are some issues you should be watching out for:  

  • If your broker wrote you a vacant policy and you have subsequently opened, it is important to advise them immediately so the necessary coverage adjustments can be made.  A vacant policy is designed for an unoccupied space and will not cover your “open for business” operations. Also, by now you should have decreased revenue on your operational policy and added back your liquor liability and assault & battery coverages so you are ready to move forward.                                                                                                                                                                                                                                                                                 
  • Regarding workers compensation (WC) and disability benefits law (DBL/PFL) – if your coverages have cancelled (due to non-pay of premium) make sure to have the policies rewritten as carrying these coverages is mandated by NYS law.  If you have not paid your WC prior year’s audit and the Co is trying to cancel your current policy, be advised that in NYS an admitted carrier cannot legally cancel your current policy based on non-payment of last year’s audit.  However, they can send you to collections for the premium owed and not paid.

Firm News:

We are beyond thrilled to have Andrew Cohen working with us.  Andrew is an attorney in our Real Estate Group and he’s a hospitality guy forever.  He’s cooked in kitchens, waited on tables, bartended and managed restaurants and has been lawyering for the industry for the past five years. He’s been with us for the past month and he’s been incredible.  You are going to like working with him.

And a special thank you to all of the people working at HL.  Busting ass every day and dealing with tough situations with hurting clients and taking it personally and doing it all with compassion, grace, fight and kindness.  It’s inspiring to work with such caring, committed and cool people.

RIP: John Lewis, a fighter for justice and an inspiration.  Regis, a New Yorker to the core.  Herman Cain, a hospitality guy most of his life.

Happy Birthday Jerry!!!!!!!  A 9- day Garcia tribute starting Saturday here:

Good night,