Stayin’ Alive: Reports of Industry’s Death Greatly Exaggerated as 2022 Approaches

Dear HL Clients and Friends,

Two weeks ago as I was walking around my Greenpoint neighborhood, I saw the lines outside and around the corner for City MD and the Polish pharmacies and the Lab Q’s and I was perplexed. These were Beanie Baby, Cronut, new iPhone size lines of young Brooklynites and they seemed calm and healthy. I could detect no productive coughs and their phone gazes seemed strong as they stood and scrolled and waited for hours to scan for their nose poke appointment.

Turns out that Greenpoint and W’burg, eternal trendsetters, were the first in NYC to get hit hard by Omicron. It spread fast like a West Coast wildfire and restaurants were closing by the dozens as employees tested positive and owners went into lockdown mode. “We’re Closed Tonight” signs and letters to our dear customers and posts on The Gram abounded as Brooklyn bars and restaurants shut down. Bleak times as we wondered how long it would last and how bad it would be. And then we gave it to our dear Aunt Manhattan, who is now a week or so behind and is currently in the throes.

But don’t you dare despair hospitality friends! There is good news here in Brooklyn that bodes well for us all. After passing through the panic, depressed and pissed off stages of Covid, people here are now entering the acceptance stage. So many of our boosted and vaxxed friends got it and everyone is generally doing ok and the suffering has been minimal. The masses mild symptoms in a huge outbreak has shifted the attitudes in Brooklyn diners, drinkers and hospitality workers. People are going out again and booking tables and buying rounds and staffs our no longer freaked out to go to work if someone tests positive. As one waiter said “Nobody’s dying so…” . Other than parties and events which are a bust, New Year’s Eve bookings have been strong and we expect that NYC bars and restaurants will have its usually crappy January and then things will blossom again as Valentine’s Day approaches. So, hang in there just a month or two longer and baring any variant hijinks, we should finally be alright.

Looking ahead to 2022, here is what we are watching:

Open Restaurants Program – Community Boards have had it with outdoor dining and the press just loves rat stories and the Open Restaurants Program is set to be overhauled over the coming year as it moves from a temporary program to a permanent one. We will need to show up and be vocal to keep the program alive and worthwhile. Don’t sleep on this issue.

Propane Heaters – Will Mayor Adams hook us up by allowing us to use propane fueled heaters again? He’s pro-business but the FDNY brass is against the propane so let’s see if that’s a fight he’s willing to pick at the jump.

RRF – The NY Times wrote a piece recently about how random the Restaurant Revitalization Fund process was and the IRC sure does tweet often but we don’t see any real movement happening on this. I would forget about it and consider it a miracle if anything develops.

Covid Testing – Fast and free testing of staff is the key to keeping the doors open. Some of our clients have used Zeel to test as they come to your restaurant and test for free if you can guarantee at least 20 tests. Check it out: https://www.zeel.com/

The Adams Family – Mayor-Elect Eric Adams and City Council Speaker-Elect Adrienne Adams will both have a major impact on the hospitality industry. After 8 years of inertia and ignorance, we are looking forward to an active and engaged Mayor and Speaker as the industry tries to right itself. We will need their help in many ways so please reach out and be vocal and let them know that we are a force.

And with some exciting and encouraging news, here’s Joey Regs…

NYC’s New Temporary Retail Liquor Permit Program is Coming Soon!!! by Joseph Levey

Since the SLA’s temporary permit program began, the only way to score a temporary license and start serving booze fast in NYC was to purchase the assets of an existing business with a liquor license. Hence the popularity of “key money” deals, which allow operators to get up and running and making money in just a few weeks – as opposed to six months. Outside of NYC, however, the SLA has always allowed applicants to obtain temps while they wait for their permanent licenses to be approved-without any prerequisite steps or hassle. Very unfair.

Well, last week, Governor Hochul continued with her good first impression and did the industry a major solid by signing legislation allowing NYC operators to apply for temp licenses with every application just like our friends in the Catskills and the Hamptons. There are a few important caveats and some bureaucratic baloney to contend with though, so read more below.

The new Temp Program has NOT gone into effect yet, BUT what we’re hearing from our friends in Albany, is that the SLA has been given an order to make this a priority and to roll it out ASAP. As such, we’re expecting formal guidance and potentially a new application as early as this week.

Here is what we can expect once the program goes into effect…

Full Liquor & Beer and Wine Licenses

• Some Full Liquor and all Beer and Wine License applicants inside NYC will be eligible for temporary permits
• Beer and wine license applicants and full liquor applicants that are NOT within a 500’ radius of 3 or more other full liquor establishments (rare in NYC), may simply notify the Community Board and file their SLA permit applications. Temps would be issued in 2-4 weeks from filing.

Full Liquor (OP) Licenses – that ARE subject to the 500’ Rule (mostly everyone) must notify the Community Board, file the appropriate SLA applications, and then must await the results of their 500’ Rule Hearing. If the results of your 500’ Rule Hearing are positive, the net effect here is a delay of about 3 weeks, so a temp would be issued 5-7 weeks after filing. If the results of the hearing are negative, however, you don’t get a temp. Additionally, you must make sure that a license was in effect at your proposed location within the prior 24 month period, AND that it had not been canceled or revoked during that time. If not, you can’t get a temp.

• Standard Restrictions to be Placed on all Temps subject to the 500” Rule
  • • Interior closing time will be no later than 12:00 AM, all days;
    • All outdoor spaces must close by 10:00 PM Sunday-Thursday; 11:00 PM on Fridays and Saturdays;
    • No outdoors music;
    • Recorded background music only indoors – no live music, DJs, karaoke or dancing.

Other Licenses
New Retail Wine & Spirits Stores [in or outside of NYC] remain NOT eligible for temporary permits
New Grocery Stores, Drug Stores and Roadside Farm Markets within NYC would now be automatically and immediately eligible for temporary permits

Pending Licenses
If you have a license application currently pending, we may be able to file a temporary permit application for you IMMEDIATELY. And so long as you qualify, you can expect to have the ability to serve booze on this provisional basis in very short order. We’re expecting a one to two-week turnaround on these retroactive filings.

The Takeaways

• • If your license application has been pending for months, you’re ready to open, but your license isn’t quite ready yet, this is great news. In just a few weeks’ time, you could be placing orders with liquor distributors, stocking up, training staff, and getting ready to finally open your doors.
  • If you passed on an ideal location, that’s already built out and ready to go, because it lacks an active liquor license to transfer and you just didn’t have the bankroll to wait 6 months for a new license, it’s time to resurrect the dream! The space would now be back in play for you, and you could expedite your opening timeline significantly.
  • If you’re doing battle with your local community board, and they denied your proposal for a license, OR you’re looking to do something more late night and/or involves live music, this new program generally won’t really help you, unfortunately.

If you’re interested in exploring whether you’re eligible, or in having us file temporary applications for you – new or retroactively, please contact Bella Vinci in our Licensing Group today at [email protected]

Joey Regs Out

The Tough Stuff by Joe Taylor, Chair, Litigation Group

A few things on the litigation front that you should know about heading into 2022:

Eviction Moratorium – The commercial eviction moratorium expires on January 15, 2022, and Landy is already hard at work serving default notices and suing hospitality tenants. Keep an eye out for any notices or mail from your landlord and let us know if you receive anything, especially any termination notices.

Personal Guaranties – 1932-A still bars the enforcement of certain personal guaranties, but only if the “date of default” falls between March 7, 2020, and June 30, 2021. If you entered a rent agreement for rents due during this time and are unable to make a payment now, 1932-A will not apply.

Vendor and Service Agreements – We have seen several vendor/service agreements (linen, dishwasher, ice machine etc.) with terms that are almost punitive, including multi-year obligations and other provisions that make it nearly impossible to exit without paying a substantial price. Please make sure to read the entirety of these agreements before signing, or send it to us and we will help you out.

As always, should you have any questions about this, or any other litigation issues, please contact me at [email protected]. Happy New Year!

Staff Quarantines by Lee Jacobs, Chair, Employment Group

So many of you have reached out to us with concerns that you could not continue normal operations or were forced to close because of staff shortages due to the ten (10) day isolation period after a COVID-19 positive diagnosis (from a PCR/antigen test).

On December 24, 2021, New York State Governor Kathy Hochul modified the quarantine requirement for most vaccinated, essential restaurant workers who test positive for COVID-19 from ten (10) to five (5) days. This is what you need to know now.

In order to return to work, the following conditions must ALL be true:

• five (5) days have passed from either the first date of symptoms or the positive test;
• fully vaccinated (two weeks or more since first dose of J&J or second dose of Pfizer or Moderna;
• have not had a fever over the last 72 hours of the five day period;
• no runny nose;
• no productive cough;
• not immunocompromised;
• must wear a well-fitting mask (https://www.cdc.gov/coronavirus/2019-ncov/your-health/effective-masks.html);
• must continue to remain in home isolation while not at work until after ten days have passed from either the first date of symptoms or positive test

A negative test is not required to return.

Workers should always practice social distancing from coworkers except when job duties do not permit such distancing. If they must remove their well-fitting facemask, for example, in order to eat or drink, they should separate themselves from others. They should self-monitor for symptoms and seek re-evaluation from occupational health or their personal healthcare provider if symptoms recur or worsen.

No matter what, we got your back, and will continue to alert you of important changes to federal, state or city guidance.

Be safe and well.

Lee

R.I.P. – Joan Didion And Desmond Tutu, both giants who left the world a more fair, free, cultured and positive place. Well done and we will miss you!

Happy New Year to all and here’s looking forward to the return of the hospitality industry for real and the emergence of cannabis in 2022!

Good night,
David

P.S. If you have any issues that you would like us to address or just want to say hi or comment, you can simply respond to this email as it comes directly to me.
-DH