Phase 1, Report from LA, PPP News

Originally Published : May 30, 2020

Captain Cuomo Sets Phaser to 1: Highly illogical to expect outdoor dining will also reopen on June 8th

NYC will creak open a week from Monday on June 8th.  Phasers are set to 1 and dammit Scotty, it’s not stunning.  While Phase 1 opens nothing new for hospitality it is an important step in the process so we should feel encouraged by the news.  Other players, including LA, are prepping to allow dining inside restaurants any day now so that’s also good vibrations.  We are hoping that if Phase 1 doesn’t result in spike city, phase 3, where we all live, may follow fast.  Maybe mid-July or so. 

Although we should continue to press Albany to move outdoor dining up to phase 1 or phase 2, Captain Cuomo has been steady in his conservative reopening  approach (other than his weird Memorial Day Weekend messaging) and I think we are going to have to wait.  But, as we know, “time to lean time to clean”.  So while it’s slow and we are waiting,  perhaps De Mayor can get his sidework done and then, when we get the nod, the outdoor spaces will have been approved, built and ready to go.

LA is certainly ready to bust it out and here with a report from LA  is our righteous dude, Adam Weisblatt, owner of critical darlings Found Oyster and Same Same.

Update from the Sprawl, by Adam Weisblatt

Big news in Los Angeles today.  Governor Newsom has granted a variance to Los Angeles County from the state’s Safer at Home order, allowing for restaurants (and bars – with a verified “Food Partner”) to reopen for in-house dining.  The city released a 17-page document that covers the “Best Practices for Safe Operations”, which provides requirements for physical distancing, cleaning and sanitizing, employee health and hygiene, facility safety, customer expectations, and employee support.  

Most notably from my perspective – it does not provide a hard cap on occupancy percentage and bar seating is still not allowed. The list is significant and certainly presents a new challenge of what it will take to operate a restaurant efficiently.  Six feet of social distancing is required, and if not possible, physical barriers are recommended.  Tables are capped at ten guests, reservations are suggested, and there will be plenty of masks.  If you’re operating a small bar, I don’t think there is much opportunity beyond continuing to push for takeout. 

It’s certainly not the type of operation that got most of us into this business, but progress is progress.  It will be interesting to see how venues once again pivot to another unknown level of operation, and who can be most creative in making both staff and guests feel comfortable.  I’d expect plenty of restaurants to hang back and see how things go as venues re-open.  The more successful a venue has been with takeout/delivery during the closure, the more likely it will be that they let the market re-establish itself before taking yet another risky pivot. How much of the magic of being in a restaurant can be created with Covid guidelines?  I have no idea, but I’m ready to see people get a little wacky.    

The next big questions in LA will be if we can use the sidewalks, parking lots, and potentially some closed streets to move tables into.  San Francisco just approved a similar measure. As did the Palm Springs/San Bernardino areas.  If outdoor patios were big before, they’re looking like lifesavers, right now.  I wouldn’t be surprised to start seeing a lot of Angelenos head further and further afield to hit up venues in less developed areas.  The central coast and desert may see a huge boon in business, as they can really stretch their outdoors spaces.  LA needs it and it should stay with us forever.  

Another encouraging sign is the seeming willingness from landlords to get creative to sign new deals.  My recent conversations have shifted from just a few months ago, and I think smart landlords, who aren’t overly exposed, are going to be willing to do what it takes to turn their spaces on.  Deals that start as revenue sharing and move into base rate upon certain benchmarks are the better opportunities I’m hearing about.  If this whole thing has shown us anything, it’s that our landlords are our partners.  Have good partners and you can swim.  If they suck – you sink.

Hopefully we finally get some good news from our pals voting on the PPP next week, which may allow venues to start to take more risks in bringing back staff.  Which, I thought was supposed to be the point of this thing. Progress is progress, but the questions surrounding how restaurants can succeed these days continues to swirl.         
Love from the Sprawl,


Yet Another PPP Update

Joey Regs says:

Step 1 complete!  We (the industry) spoke; our electeds listened.  And now we have the CARES Flexibility Act through the house and on it’s way to the Senate next week.  Great job all around – except for the lone dipshit who couldn’t help himself from voting “nay.”

These new additions to the PPP program all sounds pretty good.  But like with most things, the devil is in the details, and we won’t have a good idea of those until the Senate gets done with this thing.Below are some of the highlights of this newfound flexibility of the PPP loan program:

Say goodbye to the old, rough 75/25 with respect to how you spend your money.  And hello to a much more manageable 60/40 split.  This coupled with the good news re: prepayment issued last week may actually put us all in positions to get this money to work effectively for us now!

Say goodbye to the 8-week covered period.  And hello to 24 weeks!  Another seemingly helpful change, but how helpful remains to be seen – details, details, details.

The maturity date on new PPP loans issued will now be 5 years – instead of 2 years.  It would have been amazing all around, if they were able to make this retroactive to all PPP loans.  However, that appeared to be a nonstarter for some members of the House.  I get it, it was too awesome and helpful.  Makes sense.  They did throw us a bone here though, however.  They’re opening the door for us small business owners to renegotiate terms of our respective PPP loans with our lendors directly.  And if we can’t reach an agreement, the SBA is apparently willing to jump in and help make it happen too. Stay tuned for how this provision shapes up.

Comparing the timelines provided for the lendors (60 days) and the SBA (90 days) to conclude their respective reviews of our forgiveness applications, and the “deferral period” before loan repayment was to begin, something didn’t add up.  The schedule basically had business owners beginning to repay loans that they may not have to repay at all.  So, in a helpful measure to cure this issue, the SBA has now extended this deferral period significantly.  All things considered, borrowers will now get up to 11 months of deferment.

Remember, none of this is done yet.  It must pass the Senate and DT needs to sign it – and things could be changed/fleshed out differently/eliminated there.  So let’s not get too excited until we see the final version.  But we can certainly find some comfort in the fact that things are at least moving in the right direction. 

Hang in there everybody, and fingers crossed for some favorable news next week!

Joey Regs out.

We will continue banging the drum for Open Streets and Bill 1957 and we have a little recap here from HL Law Clerk, Christie Yeh.

1957 Update by Christie Yeh, HL Law Clerk

On May 28th, Bill 1957 was proposed by the NYC Council that would create a no-fee temporary outdoor dining permit for food service establishments to serve food and beverages in approved open spaces. This proposed bill’s prime sponsor is council member Antonio Reynoso, is backed by over a dozen council members, including City Council Speaker Corey Johnson, and various large restaurant groups. If passed, Bill 1957 would become effective immediately and the requirements of the bill would expire on October 31, 2020, or when social distancing requirements are lifted. Corey Johnson did however mention that he does not expect this legislation to apply to phase one of reopening, but rather sometime around phase three.

The bill would permit the Department of Consumer Affairs to issue permits for restaurants to set up tables and chairs in approved open spaces identified by the Department of Transportation. These new outdoor dining areas would include, but are not limited to, sidewalks permitted under the NYC zoning resolution, streets, plazas, or any public or privately-owned space determined by the Department of Transportation. They must also operate and comply with the new Department of Health and Mental Hygiene guidelines such as social distancing and cleaning protocols. However, no permit will be required in a privately-owned area, like an adjacent parking lot, if the owner consents and if the area follows the health hygiene guidelines.

The process of providing these permits would be much quicker than a typical permit process. Within ten days of Bill 1957’s effective date, the Department of Consumer Affairs would begin to accept applications and within seven days of its enactment, the Department of Transportation would work to identify safe areas suitable for outdoor dining and publish them online once a week. The Department of Health and Mental Hygiene would also have seven days of Bill 1957’s enactment date to create new guidelines for the temporary dining areas. In each application, restaurants should include the approved area and a proposed layout that would allow workers and customers to comply with the health protocols. Within five days of submitting your application, you will hear back on whether or not your application was approved by the Department of Consumer Affairs.  

T.G.I.F’in. F.