These restaurants reopened. That doesn’t mean they’ll survive

Tracey Tully and Daniel E. Slotnik, The New York Times

Posted at Sep 30 2020 10:23 PM

Customers at Liberty House, where indoor seating was available but most diners still preferred to sit outside, in Jersey City, N.J., Sept. 24, 2020. As New York City restaurants prepare to reopen with indoor dining limited to 25 percent of capacity, New Jersey owners, already operating at that same limit, say it’s hurting their odds of survival. Bryan Anselm, The New York Times

When restaurants in New Jersey were allowed to reopen three weeks ago for indoor dining at reduced capacity, Jeanne Cretella took a look at her books and made a tactical choice.

Liberty House, her restaurant in Jersey City, New Jersey, known for its panoramic waterfront views of lower Manhattan, and Felina, in suburban Ridgewood, would reopen, but only four days a week.

The Ryland Inn in Whitehouse Station, New Jersey — quaint, upscale and popular with brides — would remain shuttered.

With a 25% cap on indoor dining, the costs and the staffing levels needed to provide a safe restaurant experience outweighed the benefits.

“We can’t cover our bills at 25%,” said Cretella, the president of Landmark Hospitality, a restaurant group. “And we are at a point where we’re starting to get a little nervous once outside dining is no longer possible.”

As New York City restaurants prepare to reopen Wednesday, also at 25% capacity, the challenges emerging in New Jersey, one of the last states to restart indoor dining, underscore the enormous obstacles facing the dining industry. Many restaurants in New York suburbs, which were allowed to resume indoor dining at 50% capacity in late June, still face similar issues.

Indoor dining resumed after a summer of struggle, during which expansive outdoor seating options and takeout buoyed some restaurants that still had to cover rent and other expenses. It remains to be seen whether dining rooms that are open at limited capacity can entice customers concerned about the coronavirus, and make up for diminished outdoor dining, as fall fades into winter.

The number of virus cases in New Jersey and in New York City, the one-time epicenter of the pandemic, have increased over the past week. And with no sign that dining rooms will be permitted to reach full occupancy anytime soon, many restaurants are struggling to stay open and keep their workers employed.

The National Restaurant Association has estimated that 1 in 6 restaurants nationwide has closed long-term or for good during the pandemic, and restaurant industry groups in New York and New Jersey predict more hard times ahead.

In July, New Jersey and New York City abruptly halted plans to restart indoor dining as coronavirus cases soared in Sun Belt states that had reopened early and outbreaks were traced to restaurants and bars. New Jersey began permitting indoor dining at 25% occupancy on Sept. 4.

New York City Mayor Bill de Blasio announced last week that dining on sidewalks and streets would be permitted year-round to help restaurants survive the impact of the pandemic — a crisis that in August left 9 in 10 city restaurants unable to pay full rent.

In New Jersey, where officials have said that no virus cases have been linked to indoor dining, pressure is mounting on Gov. Philip D. Murphy to raise occupancy limits to bring the state in line with most parts of New York, Pennsylvania and Connecticut, where dining rooms can be half full.

Owners also say some customers are slowly growing comfortable eating inside.

Two weeks ago at the Mahwah Bar and Grill in New Jersey, the wait for an outside table was easily stretching to 40 minutes, even though only two to three tables inside the 200-seat dining room were filled, said Craig Kunich, who owns and operates the family restaurant with his brother and sister. “Now we’re starting to approach being full inside,” Kunich said.

At the Liberty House, more diners asked to move inside on a recent chilly night than the restaurant could accommodate, Cretella said.

“When it’s 50 degrees, the charm of outdoor dining gets lost real quick,” said Marilou Halvorsen, the president of the New Jersey Restaurant and Hospitality Association.

Still, many diners remain wary.

“Even when it was 100 degrees, hazy, hot and humid out — and I have a separate dining room with air conditioning — they didn’t want to come in,” said Tim Shanley, the owner of Coals, pizza restaurants in Bronxville and Port Chester, New York.

When restaurants throughout the region were shut down in March to stop the spread of the virus, Shanley began delivering pizzas for the first time, but sales still plummeted by 40%. He phased out delivery after he was allowed to resume indoor and outdoor dining in July, and he said his revenue was nearing normal levels, but only after cutting his staff in half.

“The cold weather’s coming,” he said, “and if they don’t let us bump up our inside, we’re going to struggle.”

Throughout New York, restaurant sales in August were down 46% compared with the same month last year, according to a survey by the National Restaurant Association.

Melissa Fleischut, the president of the New York State Restaurant Association, a trade group, said the 50% capacity limits in restaurants outside New York City would most likely be unsustainable for many of the 8,500 eateries she represents. “They’ll be lucky if they’re breaking even,” Fleischut said.

There are no statistics yet on New Jersey restaurant closures. But Halvorsen said anecdotal evidence of hardship was mounting: A liquor license is posted for sale. A restaurateur bids farewell on social media. Residents start a GoFundMe page to help a diner pay its bills.

“We can no longer justify continuing our operations at this time,” a representative from Modine, a southern food standout in Asbury Park, New Jersey, wrote on Facebook as it announced it was closing just before the start of the bustling summer season.

Outdoor and indoor capacity is only part of the problem. Personal finances are also taking a toll, said Thomas Koukoulas, the owner of Thomas’s Ham ’n’ Eggery Diner in Carle Place on Long Island.

“Not only are people nervous about going out, but a lot of people are unemployed,” Koukoulas said, adding, “A lot of people are on very strict budgets.”

But his woes, he said, pale in comparison to the uphill climb facing New York City restaurants.

“Manhattan’s a whole different ballgame,” Koukoulas said. “There’s no theater, there’s no tourists. It’s going to be a long haul. My heart is broken for them.”

Robert Mujica, New York state’s budget director, said that restaurants’ continued adherence to strict safety regulations, as well as the state’s ability to keep the infection rate low, would help to reassure diners and enable more restaurants to stay solvent.

“Restaurants focus on compliance so that people feel safer,” Mujica said. “And if people feel safer, they’ll feel more comfortable going out.”

Dipesh Patel, the owner of Sabor Rico in New Jersey’s fourth-largest city, Elizabeth, about 20 miles southwest of Manhattan, said business at the Colombian restaurant was down 30% compared with last year. The fact that he owns the building is the only thing keeping him afloat.

“If I had to pay rent, it would be too hard,” he said.

Across the street, at Rancho Mateo, a festively decorated cafe and bar on a block jammed with small restaurants, customers filled two tables inside and one outside on a recent weekday at lunchtime.

Sasha Intriago and four relatives sat at a table close to a large open window as sirens and car horns sounded outside.

It was their first time dining indoors since the virus swept through Elizabeth, killing Intriago’s uncle and infecting her mother and aunt. Still, she said she was comfortable inside, pointing to a variety of precautions: cutlery sealed in paper sleeves; masks and gloves worn by servers; her ability to sit near an open window.

Intriago, a lawyer who lives in Elizabeth but works in Totowa, New Jersey, said she was back to work in an office, and her aunt regularly takes the train into New York City, where she works as a housekeeper.

By comparison, she said, eating indoors felt quite safe.

The Mahwah Bar and Grill, in northern Bergen County, is less than a mile from the New York border.

Since July, restaurants a short walk away in Suffern, New York, have been permitted to operate at half capacity, even though the Mahwah Bar and Grill was barred from reopening its dining room until early this month, at 25% capacity.

“It’s a shame — normally you couldn’t get a seat,” Jeff Goldstein, 67, said as he ate with a co-worker, Frank Flanagan, at the sole table occupied inside a little after lunchtime. “They’ve got so many people terrified.”

Flanagan, 63, said he had no qualms about eating inside.

“I have no fear of it whatsoever,” Flanagan said. “You take precautions, but you have to live your life.”