State ordered restaurant closings: a message to our clients

During this very difficult and trying time, first and foremost we want to express our hope that everyone is safe and healthy, and taking precautions to stay that way.

We recognize that the unprecedented government-ordered shut down of restaurants and bars that became effective Monday night at 8 p.m. is devastating and disastrous to business owners and their many faithful employees.

Here is what we know that we can pass on.

The Governor’s closure order allows restaurants to remain open for take-out and delivery only. Legally, a restaurant or bar can serve beer to go, but not spirits or wine, however, the Governor said that the state would allow wine and alcohol to be temporarily delivered or taken out. We contacted the New York State Liquor Authority for confirmation and they are formulating specific rules on this. We were told that the regulation will require the out going beverage to be sealed, only one per customer, and it must be ordered together with food. As we get more specifics, we will pass them on.

If you will have no take out or delivery during the next ninety days and will close down completely, you do not have to place your liquor license in safekeeping. Just make sure you keep the certificate in a safe place, to go back on the wall when you re-open.

The New York State Liquor Authority also determined today that it will allow liquor wholesalers to exchange liquor inventory purchased by retailers between March 1, 2020 and March 17, 2020 for a credit at the actual price paid.

The Authority is suspending all hearings. This includes 500 foot rule hearings and disciplinary matters, as its staff is being curtailed. It is unclear what the Authority will do about holding full board meetings. The upshot of this is that there will likely be an increased delay in obtaining approvals. In our conversations with the Authority, however, they acknowledged that they would like to avoid any more of a slowdown than already exists. How they will do this remains unclear.

Beyond licensing issues, we know that restaurants and bars have greater problems in dealing with loss of revenue, and yet having continuing obligations, not the least of which is rent. The Real Estate Board of New York, in an announcement made today joined by about thirty of its members, which include some of the largest real estate companies in the city, said that they would not commence eviction proceedings for non-payment of rent against residential tenants during the next ninety days. Our hope is that they appreciate equally the plight of their commercial tenants and will allow for some breathing space.

There remains an open question as to whether force majeure provisions in leases may absolve a tenant of rent obligations, a difficult position on which we are not expressing an opinion. Restaurant owners should consider putting their landlords on written notice and opening a dialogue sooner rather than later to discuss possible rent concessions or abatements. Other lease obligations, such as continuous operation clauses and minimum operating hours requirements should also be reviewed.

We will continue to post updates as they develop. We are in regular contact with the State Liquor Authority, and also will be in touch with the New York Nightlife Mayor’s Office to see how the city may offer help in addition to the small business loans that the city began offering last week.

We understand that you are in survival mode. If there is any .way we can help, or if you have any specific questions, please reach out to any of us.