OpEds from the IndustryBy David Helbraun
on May 1, 2020 in Coronavirus
Dear HL Clients,
Happy Friday! As you may have picked up there is a theme to Friday’s newsletter. I turn it over to you, the readers, so you can broadcast to the industry what’s on your mind. Today, I am starting to publish OpEds written by you and will continue to do so as you send them in. It’s important that we get to share our viewpoints here with each other and beyond. Btw, we have over 2,000 people receiving and reading this newsletter so don’t be surprised if what you write gets disbursed wide and far.
Let’s Die on our Feet!!
by Juan Correa, Owner and Managing partner, Llama Inn & Lllama San
Dear Fellow Operators,
I’ve been religiously reading the HL daily newsletter and can’t thank them enough for being such extraordinary champions of our industry. Guys, when this is over we are gonna party hard. Peruvian style. On me!
That said, I’ve been discussing the topic of rent and landlords with them, which is in my humble opinion the NUMERO UNO issue we need to tackle, without a doubt. Yes, PPP modifications are needed and would be really nice but not all of us will get a loan. Some form of bailout/stabilization fund? Twist my arm. Payroll tax relief, sure but I need to make sure I have a business before I worry about payroll. Changes to structural issues in our industry, of course, but that won’t guarantee survival.
Chicos y Chicas. This is existential! If we don’t get our landlords to agree to a percentage of revenue lease we are royally screwed. The death won’t necessarily be today, but may be slow-ish and cruel. There is not enough money the government can or will print to save our asses— ask Moscow Mitch.
As Gabe Stulman pointed out in his honest, spot-on piece, Corey Johnson is on the right track with Bill 1932-2020 and we need to get the City Council and our lovely Mayor on board.
I don’t know how we can pressure DeBlasio. I’m not smart or connected enough to figure out how to exert any influence on a guy with the ego to run for President on such a dismal record as the Mayor. Should we do a silent and socially distanced march? Should we stop food delivery? Should we do a day without a Latino/a protest and ask our rockstar Mexican, Dominican, Ecuadorian staff to stay home and protest (fuck are they our every day heroes or what?).
All I know is we have to flex our collective muscle or the Mayor will do what he is good at: Nothing; and our landlords will squeeze us dry— they either can wait because they have deep pockets or they have no incentive to act today. In finance lingo, there is option value in waiting !
On the topic of flexing collective muscle there’s a thing or two that I’d like to vent about. It all sort of clicked when I read Gabrielle Hamilton’s piece in the NYT Magazine describing our industry as cagey. Holy shit! She nailed us.
I regularly join conference calls and task force workgroups and no offense, but all I want to do after is pop a xanax and down a bottle of rum.
We say the right things, articulate the problem, and talk about hiring lobbyists!! Lobbyists? Maybe it’ll work, but do you know how much the real estate industry contributes to the campaigns of our representatives? Google it!
What pisses me off the most, is that no one dares to address three things:
- The proverbial elephant in the room. Will you go after my space if my landlord kicks me out? Will you give legs to their theory that if I don’t pay up in full, she/he will have operators willing and able to lease her/his space? Why can’t we commit not to do so?
- We are all NOT in the Same Boat. Everyone’s dynamic is different and most of us don’t have the negotiating leverage of let’s say Danny Meyer; thus, negotiating on our own, most of us will inevitably fail.
- Cute Instagram posts won’t cut it. Are we willing to fight? Gloves off, head-on, street-fight? I don’t get that vibe yet—maybe they are right in calling us Champagne Liberals— oh gosh, does anybody know where Jimmy Hoffa is?
I’m sorry if my opinions, my vulgar language and my poor grammar offend anyone, but damn am I angry, really fucking angry. We’ve all put everything we had to make our restaurants happen and it’s infuriating that in spite of collectively employing over 650,000 people and generating a shitload of tax revenue, we don’t have a single goddam elected official truly championing our cause. You’d think they’d be worried, if anything sad, for not being able to slap us with horseshit DOH inspection points.
So let’s get loud, obnoxiously loud, let’s piss the fuck off our landlords, our elected officials, insurance companies, and the media! Let’s force our friends in the press to do what they are best at —shame officials into action. Who the fuck cares anymore? It’s our livelihoods we are fighting for.
As Emiliano Zapata said: “es mejor morir de pie que vivir de rodillas!”
(It’s better to die on your feet than to live on your knees!)
What’s a Small Business Anyway?
by Haley Fox, Partner, Alice’s Tea Cup
I have long ranted about how small business is defined in this country. Under 500 employees? In what world is 499 employees small? The way the laws are used so that what would be considered large breaks up into smaller llcs and creates a disparity and difficulty defining what small businesses actually are. And where is medium business in all of this?
If businesses were defined correctly – whether it be sales/employee average vs number of locations or managing partners – we might find ourselves in a different position right now where the funds allocated for small businesses could actually be used to save us.
Small businesses (actually small ones with let’s say under 50 employees each ) account for the most businesses in this country. We develop communities, become the heartbeat of a neighborhood, employ those who most need employment (typically), and account for untold growth and taxes paid. . What incentive does anyone have to contribute to the development of this country by taking the brave leap to open a business unless we know we are wanted, appreciated, and protected?
We are facing reopening with frightened patrons, social distancing, extra expenses to assist with the new rules and a slowly returning clientele. Without forgiven assistance, small business owners feel penalized for that bravery. And when considering the enormity of our taxes, it feels like a slap in the face to have the one loan that could be forgiven be in some protection of employees who are already making more than they typically make in restaurants from the law passed for their unemployment, and unemployment for which most businesses owners themselves aren’t able to apply. For shame. And how sad a message to send to the majority of this country.
The Big Hearted City
Mike Krawiec, Owner, Silver Light Tavern
The old normal has gone out with the sani-sink water and our ways of doing business for lack of better word are now outdated. Maybe not forever, but definitely for a while.
My business’s touchstone has always been about human connection and how to foster that intimacy – and this virus has ripped the heart right out of that traditional notion. I struggle daily with this as we enter The Unknown – we have to find new revenue streams beyond the brick and mortar of what we built.
On this roller coaster of optimism and doom & gloom, I can’t help but think that people are going to come out of this more attuned to how fragile and vulnerable small businesses are – and hopefully support them more. I hope they realize that they are the fabric of a city society, and the people that work in these businesses are the glue that binds them – and after this they will be needed more than ever. A neighborhood devoid of independent and unique businesses is not a place I want to live.
Perhaps while this has physically pushed everyone apart, maybe we come out of this a little closer – and more human and empathetic to the ones that matter. There’s only room in this city for big hearts.
As Jerry and the boys say: “Don’t tell me this town ain’t got no heart. Just gotta poke around”
Good night and good weekend.
David Helbraun is the Founding Partner and Chairman of the firm. He is a lifelong entrepreneur who has been running successful businesses in New York City for years.