Half of businesses couldn’t pay rent in November: survey
by Benjamin Fang
Nov 24, 2020 | 795 views | 0 0 comments | 46 46 recommendations | email to a friend | print
Randy Peers from the Brooklyn Chamber speaks to the owner of McNally Jackson Books in Williamsburg.
Randy Peers from the Brooklyn Chamber speaks to the owner of McNally Jackson Books in Williamsburg.
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Owners of Naked Dog, an Italian Restaurant in Greenpoint, speak with the Brooklyn Chamber.
Owners of Naked Dog, an Italian Restaurant in Greenpoint, speak with the Brooklyn Chamber.
slideshow
Fifty percent of businesses surveyed by the Brooklyn Chamber of Commerce couldn’t pay full rent in November, a troubling sign demonstrating the extent of the commercial rent crisis.

According to the chamber, 40 percent of respondents pay more than one-quarter of their monthly revenue in rent, while 16 percent pay more than half.

Nearly half of the 264 Brooklyn-based small businesses surveyed, including restaurants, bars, retail, health and wellness stores, said they owed back rent for previous months as well.

“Small businesses are on life support and struggling to survive,” said Randy Peers, president and CEO of the Brooklyn Chamber. “For most, stimulus funding through PPP has long been exhausted and many businesses that are uncertain about the future are now hedging their bets over what rent they can afford to pay.”

Peers noted that the mandated closure of businesses in south Brooklyn due to the COVID surge was “nearly fatal.” He warned that another complete shutdown in the future “could bring total collapse.”

“Small businesses urgently need another federal stimulus package and ‘recovery leases’ proposed at the state level,” he added, “which relieve crushing rent bills and address past-due payments.”

The chamber’s survey offered some positive takeaways. Nearly half of businesses surveyed received some form of rent concessions in November, up from 25 percent in September and August.

Twenty-one percent received rent reductions, while another 21 percent received rent deferrals, where the rent was tacked on to the back of their lease.

As the COVID-19 infection rate continues to rise in New York City, both Mayor Bill de Blasio and Governor Andrew Cuomo have hinted at a possible future shutdown. The mayor has said indoor dining may end after Thanksgiving.

Andrew Rigie, executive director of the NYC Hospitality Alliance, said in a statement that further restrictions on restaurant operations should be coupled with specific data on how the virus is spreading in eateries, as well as financial support for small business owners and workers.

He said highly regulated indoor dining has “been working safely” across the state since June while infection rates decreased until recently. Measures like reduced occupancy, enhanced air filtration systems, limiting bar service, temperature checks and wearing masks have been effective, Rigie said.

“While public health and safety must be paramount, we have not seen contact tracing data indicating that highly regulated indoor dining causes the recent infections,” he said, “and thus struggling small business owners and their employees should not be left holding the bag as a default reaction without being justly compensated.”

A report released in October by State Comptroller Tom DiNapoli found that up to half of New York City’s bars and restaurants could close permanently in the next several months, which would cost the city nearly 159,000 jobs and 12,000 bars and restaurants.

Rigie noted that nearly 150,000 industry employees are still out of work.

Tom Grech, president and CEO of the Queens Chamber of Commerce, said in a statement that restaurant owners are “already hanging on by a thread.” Another lockdown may mean neighborhood institutions may never open their doors to customers again, he warned.

He called for passing the RESTAURANTS Act, a federal bill that would create a $120 billion grant program specifically to aid struggling bars, restaurants and caterers. The funding can be used for payroll, mortgage, rent, utilities, supplies and other essential expenses.

The grants would cover the difference between revenues from 2019 and projected revenues through 2020.

The legislation passed in the House already, but has not moved in the Senate.

“We ask that our elected leaders only restrict indoor dining if it is absolutely necessary to do so,” Grech said, “and provide much-needed relief to help these struggling business owners.”
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