New PPP Rules and Outdoor Dining on the Way!

They’re Alive!!! Our Dearly Elected Show Signs of Life as Senate Passes PPP and De Blasio Pushes Open Streets

Things are looking up today aren’t they? There’s not a bluebird on my shoulder but there is an optimism in the air that has been missing for a while.  Maybe it’s because the timeline to reopening seems to be getting shorter.  Maybe it’s because all of a sudden, the politicians woke up from their slumber and have recognized that the hospitality industry needs a boost and the clock is running out. Maybe it’s because the protests and the discourse have been phenomenal and moving.  Maybe it’s because the state of the world makes us all realize that fighting is worth it and that you gotta  keep fighting for what you believe in and what’s important to you if you want to get anything done in this life.

Also, some very good news dropped today. Queen Bee and his drones got the insurgent Senators to fall in line and they passed the new PPP bill that will help many of us.  Then, De Mayor, as we predicted, unbuckled and unleashed Polly T. from DOT who showed up at today’s City Council hearing on the Open Streets bill and, on behalf of the Mayor, let us know that the goal was for the city to be ready to go when Phase 2 hits the City.  Commissioner Polly T. is smart and tough and she may just be able to get it done. Again, this could be as early as June 22nd even though De Mayor, at his own press conference, murmured something about a July opening but maybe all the recent governing activity has made him weary and he was confused.  We will be watching.

Without further ado, here is Mr. Levey to tell us about all things PPP and Outdoor Seating.

Joey Regs says:

Alright folks, strap in for a pretty heavy “Regs” day here.  We’ve got a bunch to cover, and I’ll do my best to break it down for you in a way that does not put you to sleep.  Let’s Jump right in…
 
Last night, Senator Johnson finally stopped being…wait for it…such a Johnson, and got out of the damn way, allowing the PPP reform bill to pass quickly via unanimous consent. This was an important step as now the bill is sitting on the Trumpster’s desk, awaiting a signature.  Once DT signs this thing into law, we can plan accordingly.  But getting this bill turned into a law is only part one – don’t get me wrong, it’s significant, but it’s also only part of the story.  Part two is up to our boy, Mnoooosh and his crack SBA team.  Imagine if he played a professional sport.  You can almost hear the crowds, right?  Sorry, I miss sports, but I digress. 
 
Remember, details are important and we won’t know what we are in for until we get the guidance on the rules and how they will be interpreted  The fact that we aren’t clear on the interpretations of these new rules yet means that you should probably refrain from making any drastic changes to your strategy for another beat or so.  We know there will be at least one more “interim final rule” set dropping shortly, as well as at least one more set of FAQs from the Treasury.  
 
Ok, so let’s review the major proposed changes to the PPP program that have now been approved by both the House as well as the Senate…
 

• The “covered period” is being extended from 8 weeks to 24 weeks.  AND instead of having to normalize your payroll by June 30, 2020, theoretically it can just be normalized by December 31, 2020.  This should be good news all around, however, the actual bill provided next to zero detail and there are at minimum 10 new questions that just popped into my head without even thinking too hard regarding FTEs, use of funds, and whether this makes any kind of sense for you, if you’re 7 weeks in.  Guidance from Treasury is going to be of crucial importance for this one.
• 60/40 is the new 75/25.  The good news here: you now get to spend up to 40% on the “other stuff” (rent, utilities), and you only need to get to 60% for payroll (instead of 75%).  The bad news here:  that 60% threshold is a trigger – so if you don’t spend at least 60% on payroll, none of your loan will be forgiven.
• You’re provided a bit of wiggle room re: FTEs.  You can reduce your FTE targets if you can’t find qualified employees or were unable to restore business operations due to COVID-related operating restrictions (looking at you, entire fucking hospitality industry).  This could be very cool and very helpful.  However, zero detail but this is potentially a biggie.
• Allows for the deferral of payroll taxes that would otherwise have not been eligible for deferment, due to one’s application for forgiveness of the PPP loan.  Initially, it was one or the other – payroll tax deferrals OR PPP loan forgiveness.  Now it appears you can have your cake here and eat it too.  Speaking of, I’m starving.  I’ve been on a diet for about 3 weeks now.  I’ve dropped some LBs, but the additional misery may not actually be worth it.  From what we’re hearing, you’ll be able to defer 50% of your payroll taxes to December 31, 2021 and the other 50% to December 31, 2022.  More info on this will definitely be forthcoming , so stay tuned.

As we do whenever there is a significant change in the PPP multiverse, we will be hosting a webinar to break it down in detail.  We’re planning on doing that Monday afternoon.  Stay tuned for specific details.


Let’s move away from our Federal Government now, and focus more locally.  Let’s talk about outdoor seating in NYC. 

We introduced you all to City Council Bill # 1957 just a few days ago, so I won’t waste your time by explaining it again.  I will summarize it for you though, and provide some FAQs about the program  below, now that a bit more info has been unveiled…

This bill intends to create “Temporary Outdoor Dining Permits” for use by restaurants and bars throughout NYC.  The permits would be issued by the NY DCA, and would allow for establishments to serve food and beverages in “approved open spaces.”  Various NYC agencies would be charged with identifying these “approved open spaces.”  These “approved open spaces” would include some streets otherwise closed to traffic, promenades, plazas, and other public spaces.  The overarching goals of the program are consistent with what we’ve been asking for:

• Make it cheap (or free, ideally);
• Make it easy;
• Make it accessible to all;
• Make it broad;
• Get us fast approvals, as time is a ticking here.

 
Some useful FAQs about the program
 
Q: How do we apply?
A: The application isn’t out yet, but it will be released, by the DCA (Dept of Consumer Affairs), when it’s ready.  We understand that the DCA has a draft version completed, but it has not been finalized quite yet.  As it stands, there is NO FEE attached to the application.  We will keep you posted as more info is released here, and you know we will be fully geared up to assist, if you want the help. 
 
Q: Once filed, how long until we actually get approved?  This won’t be like a sidewalk café application that takes six months, will it?
A: From what we’re hearing, as long as you qualify, your application is complete and it’s approvable, approvals should be issued WITHIN 5 DAYS!.
 
Q: How long is it going to take the City to identify these “approvable open spaces?”
A: They’re giving themselves a deadline of seven days from when the bill becomes law, but from what I understand from an “insider” in the administration, they began this process months ago and are just about done with it anyway.
 
Q: What kind of distance requirements are anticipated?
A: Social distancing guidelines must be followed, as well as ADA compliance.  Additionally there will be guidelines issued re: distance from bus stops, intersections, fire lanes, fire hydrants, and the like.
 
Q: What about serving booze?  Will this be allowed at these temporary outdoor dining areas?
A: The answer is, “Yes,” but the question is just “How?” right now.  The current SLA guidance on the matter would indicate that Community Boards would have to be involved and that this process would resemble their standard “Alteration” applications.  If that were the case, no one will be serving booze outside until after this whole program expires!  That obviously makes zero sense, so I expect that you’ll see a change at the State level.  We’re already focusing our energy there, so that hopefully we can see some meaningful change sooner rather than later.
 
Joey Regs out, finally.


Paris opened their cafes this week and it that’s not enough to get you mildly excited, I have nothing further.

Good night,
David