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Half of New York City’s Restaurants, Bars Could Permanently Close Due to Coronavirus, State Audit Finds

People sit in a Mediterranean seafood restaurant at Hudson Yards as restaurants resume indoor dining in Manhattan, New York, September 30, 2020. (Andrew Kelly/Reuters)

Half of New York City’s bars and restaurants are in danger of permanently closing in the next six months as a result of financial fallout from the coronavirus, according to an audit released Thursday by state comptroller Thomas DiNapoli.

The comptroller found that in the next six months, between a third and a half of all city bars and restaurants could close their doors for good, eliminating over 150,000 jobs.

“The industry is challenging under the best of circumstances, and many eateries operate on tight margins,” DiNapoli said. “Now they face an unprecedented upheaval that may cause many establishments to close forever.”

As the coronavirus tore through the city this spring, restaurants were forced to close their doors to indoor dining, allowing only takeout, and later outdoor dining, for months. Restaurants were allowed to host indoor diners for the first time in six months on Wednesday, though only at 25 percent capacity.

The financial impact of the reduced service left nearly three-quarters of employees in the city’s restaurant industry jobless at the pandemic’s peak, the report said. The industry’s employment fell to just 91,000 jobs at that time, down from 317,800 jobs in 2019 when the industry paid out $10.7 billion in wages and amassed more than $27 billion in taxable sales.

The financial ruin has had the greatest impact on the city’s minority communities, the report found; in 2018 some 60 percent of restaurant workers living in the city were immigrants — 44 percent of whom were Hispanic and 20 percent were Asian.

The city has tried to balance keeping restaurants alive with mitigating the spread of coronavirus, leading to the recent approval of a permanent, year-round outdoor dining program with an initiative to expand and expedite applications. Forty-three percent of restaurants and bars had received outdoor seating permits by the first week of September, while the initiative helped grow employment numbers to 174,000 by August, the report found. 

“It’s important that the state and city continue to be creative and bolster the industry,” DiNapoli said. “The city’s decision to extend outdoor dining year-round to help keep restaurants afloat is a step in the right direction along with opening for indoor dining.”

Andrew Rigie, executive director of the NYC Hospitality Alliance said in a statement that the report sends a “critical message” to policy makers and New Yorkers that the restaurant industry must be at the center of the city’s recovery in order to save the economy as a whole.

“While we are appreciative of the government actions taken so far to support our restaurant community and the hundreds of thousands of people it employs, many more polices must be enacted by all levels of government to help save these small businesses and our economy,” he said.

DiNapoli said the city should issue clear, easy-to-understand guidance to restaurants on reopening and work with the state to facilitate loans and grants to keep restaurants from folding. Additionally, the comptroller recommended that the federal government offer additional funding to the industry in the wake of the Paycheck Protection Program’s expiration in August. 

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