A new restaurant industry survey offers a sweeping view of just how precarious the financial situation is for the majority of restaurants and bars in the city: nearly 90% of those businesses were unable to pay full rent in August, with 34% unable to pay any rent at all.

The survey of 450 restaurants, done by the NYC Hospitality Alliance, found that the number of businesses who couldn't pay rent had risen over the last three months, despite the addition of outdoor dining and other measures. In June and July, 80% and 83% of restaurants, respectively, said they were unable to pay full rent.

Of those restaurants that said they couldn't pay full rent in August, nearly half said they'd be able to pay 50% of their current rent, with another 30% saying they could only pay less than 50%. About two-thirds of those surveyed said their landlord had deferred some of their rent payment during the crisis, but almost 60% say they haven't been able to renegotiate their leases with their landlords.

"New York City restaurants have been financially devastated, and it's unfortunate but not unsurprising that month after month, more restaurants that we survey have been unable to pay their full rent," said NYC Hospitality Alliance executive director Andrew Rigie.

While the addition of outdoor dining, the return of indoor dining at 25% capacity next week, and the COVID-19 Recovery Charge are great steps forward for restaurants, the overwhelming consensus by restaurateurs is that those things aren't enough to offset the incredible damage COVID has wrought on small business owners.

"There's no way small business owners are going to be able to pay back multiple months of missed rent, nor will they be able to pay 100% of pre-pandemic rents anytime soon," Rigie said. "In perspective, it was difficult enough for New York City restaurants to survive pre-pandemic when they had 100% occupancy."

David Rosen, owner of several eateries including Williamsburg’s the Breakers, told the NY Post that the scariest part of this new survey is what it implies about what's to come as winter approaches: “What’s concerning about this report is I would assume given the past two months and with outdoor dining unfortunately will be peak revenue season during this pandemic for restaurants. As we head into the winter even with indoor dining on the horizon I don’t think that 25 percent indoor will exceed what exists already outside. This inability to pay rent trend will continue, if not worsen,” he said.

A photo of shuttered The Long Island Restaurant on Atlantic Avenue

The Long Island Restaurant on Atlantic Avenue

The Long Island Restaurant on Atlantic Avenue
steven pisano

As for restaurants renegotiating with their landlords, Rigie said he's heard that "it's been really all over the map. We've heard some really positive stories, but we've just heard way too many negative stories where landlords have been unwilling, or in some cases, maybe unable to reduce or forgive enough rent to make it viable for that restaurant to survive. So it's been really tough and we're not going to solve this rent crisis simply by relying on people to negotiate unfortunately."

David Schneider, founder and owner of Oaxaca Taqueria and managing director of food and beverage at the McCarren Hotel and Talk Story Rooftop, told Gothamist that even those whose landlords have cut their rent during the first months of the pandemic are feeling the pressure six months in. "Landlords are not going to be patient much longer," said Schneider. "There needs to be relief for landlords too so they're not relying on us."

Schneider stressed that with such a slow recovery on the horizon, it will take the entire industry "working together as opposed to each individual place trying to survive on their own."

That sentiment was echoed by Salil Mehta, chef/owner of Laut and Laut Singapura. "We've suffered incredibly, we've lost more than half our savings so far," Mehta told Gothamist. "How do we resolve landlord-tenant disputes at this time? Some landlords are being helpful, some are playing hardball. The big underlying issue is people not being able to make rent during this time. We're used to paying $40-50,000 rent even with 25 seats, and I don't think we can afford to pay $20-25,000 in rent now, after our landlord discounts us."

"I think the only way any restaurant will survive is through the help of their landlord, that they all understand we're in it together," he added, saying NYC's recovery can only happen if . "If they help the tenant out, the tenant will survive. But the city hasn't helped landlords much either, so it trickles down to restaurants and trickles down to the economy."

A photo of outdoor diners on Vanderbilt Avenue in Prospect Heights

Outdoor diners on Vanderbilt Avenue in Prospect Heights

Outdoor diners on Vanderbilt Avenue in Prospect Heights
Frank Lynch

A recent report from the New York State Restaurant Association [NYSRA] found that two-thirds of New York restaurants said they are likely to close by the end of the year without a comprehensive relief package specifically for restaurants, with half of those restaurants saying they're likely to close by November.

The problems aren't just in NYC of course: in a report last week, the National Restaurant Association found that almost 100,000 restaurants countrywide—nearly 1 in 6 restaurants—are closed either permanently or long-term; nearly 3 million employees are still out of work; and the industry is on track to lose $240 billion in sales by the end of the year. 

And that's why Rigie and so many others say it is imperative that politicians in Washington pass the RESTAURANTS Act, a bipartisan federal bill that would create a $120 billion fund to aid small and locally-owned restaurants, and cover the difference between revenues from 2019 and estimated revenues through the rest of the year.

On a more local level, Governor Andrew Cuomo extended the commercial eviction moratorium until October 20th for tenants that haven't paid their rent yesterday, another positive temporary measure. It's still unclear whether outdoor dining will be extended past its current October 31st deadline (or even become permanent) or if indoor dining capacity will be increase to 50% by November 1st.

"It's going to take really a restaurants Marshall Plan that's going to have various policies from all different levels of government for a long time until businesses can get back to something like a pre-pandemic operating environment," Rigie said.

According to a recent report by Comptroller Scott Stringer, at least 2,800 small businesses in the city closed between March 1st and July 10th, including about 1,289 restaurants.

With additional reporting by Danny Lewis.

[Update] Jack Sterne, a spokesperson for Governor Cuomo, explained what the state has been doing to try to support these businesses during this difficult period: "We understand the difficulties facing restaurants, which is why we’re protecting commercial establishments from eviction, allowing bars to sell cocktails via take-out and delivery, and cutting red tape so restaurants can easily expand outdoor dining," he said. "We’ve achieved record-low infection rates thanks to a data-driven reopening strategy – we are using that same phased approach to re-open indoor dining in New York City and will continue working with our partners in the industry moving forward. This pandemic isn’t over and everyone is trying to avoid a potential second wave that would force businesses to close down again."