Billions of Relief Dollars Hang in the Balance
For US Restaurants. Earlier this month, the RESTAURANTS Act, which would dedicate $120 billion to restaurant relief, was reintroduced in Congress by a bipartisan group of senators, as reported by Restaurant365. The bill is a follow-up to the RESTAURANTS Act of 2020 that was introduced last June, which passed in the House of Representatives last October and was never voted on by the Senate. The bill would allow restaurants and other food service businesses with fewer than 20 units to apply for up to $10 million to help cover COVID-19-related expenses dating back to Feb. 15, 2020 and to proactively cover expenses for up to eight months after the bill takes effect. Also based on the RESTAURANTS Act of 2020 is the Restaurant Rescue Plan, which sets aside $25 billion for restaurants impacted by the pandemic as part of the Biden administration’s $1.9 trillion American Rescue Plan stimulus package, according to JD Supra. After being approved by a decisive 90-10 majority in the Senate, the plan will face a House of Representatives vote this week, according to Restaurant Hospitality. Under this bill, food and beverage service businesses that are not publicly traded and that — like those specified in the RESTAURANTS Act — have fewer than 20 locations would be eligible to apply for grants. These grants allot up to $5 million in relief for an individual restaurant or $10 million for a restaurant group.
Here’s What I Need from the Government
To keep my restaurant open. In its last Covid relief package, Congress included a new round of Paycheck Protection Program (PPP) funding for small businesses. The PPP offers restaurants a loan equal to the cost of three and a half months of payroll. It also provides a “second draw” for small businesses that took out a PPP loan in the program’s first round last year and clarifies explicitly that forgiven PPP loans will not be subject to taxes. In addition, the Biden administration recently announced that beginning Wednesday, there will be a two-week window during which only small businesses with fewer than 20 employees can apply for funding. These changes are helpful but let me emphasize: The new PPP program alone will not save restaurants. Only targeted grants that do not put small business owners at risk of taking on further debt will give independent restaurants and bars a real chance at surviving.
New Tax Credit Rule Can Gain You Up to $19K Per Restaurant Employee
The Taxpayer certainty and Disaster Tax Relief Act includes several changes. One of the good things about December’s COVID-19 relief package—beside the fact that it provided another round of Payroll Protection Program largely focused on small businesses—is that it fixed or improved some aspects of earlier bills. One of these issues is the Employee Retention Tax Credit. “The ERTC in its current version is far more appealing,” says Stan Harris, president and CEO, Louisiana Restaurant Association. “The first structure of ERTC was used by those operators who chose not to seek PPP, or who had adequate capital or lines of credit.” The new version, he says, lets operators take advantage of both the ERTC and a PPP loan, if they get the timing right. December’s Taxpayer Certainty and Disaster Tax Relief Act includes several changes and improvements to the ERTC that can help you keep employees on staff after you’ve run through PPP loan money. Now, if you’re eligible, you can access ERTC for up to $5,000 per eligible employee for a calendar quarter in 2020, and up to $7,000 per eligible employee per quarter in 2021 from January 1, 2021 through June 30, 2021.
Tax Planning for a Pandemic
Understanding the rules on asset depreciation. To describe 2020 as a challenging year for the restaurant industry would be an understatement. With indoor dining shut down or severely restricted across the country, many unforeseen expenses were incurred to quickly create or expand outdoor seating, takeout and drive-thru options. Then, as restrictions began to lift, restaurants of all sizes faced many more expenditures to provide safe and comfortable conditions to the returning customers. Those expenses included improvements to old — or installations of new — air-filtration or ventilation systems (e.g., HVACs); purchasing of specialized equipment; installation of physical barriers; supplying of personal protective equipment (PPE) and more. One small silver lining is that these expenses also created significant tax deferral opportunities that can help mitigate the resulting financial burdens on restaurants. Here’s what you need to know about which purchases can produce great tax benefits.
As Restaurants Recover, Their Success Formula Will Change
Off-premise innovations like ghost kitchens will characterize the industry going forward. There’s a light at the end of the tunnel for the restaurant industry, analysts with global advisory firm Duff & Phelps say in a report. Ample investment capital is available, stock valuations are rising, at least in restaurant niches that cater to young, convenience-focused consumers, and smart combinations of companies — like Inspire Brand’s acquisition of Dunkin’ in October — are boosting some brands’ staying power. Even so, 2021 will remain a tough year for an industry still battling the impact of restrictions. Prospects are expected to brighten by the third quarter. “The operating environment is expected to [see] a strong rebound in late 2021 and into 2022,” the report says.
Times Square is Slowly Coming Back to Life
In part due to its restaurants. Visitors are slowly returning to Times Square and the gradual increase appears to be benefitting some local restaurants in particular, the New York Post reports. It’s still too early to celebrate the development as a victory, but the Times Square Alliance, the group that oversees and promotes the area, is buoyed by the recent uptick in visitors. About 105,000 people are visiting the tourist hotspot on average daily, up from the 35,000 or so who did in March and April last year, as COVID-19 cases skyrocketed in the city. The Alliance and local businesses have partly attributed that to the return of indoor dining on February 12. Greg Wetanson, who co-owns Dallas BBQ and Tony’s Di Napoli, and Jeremy Merrin, the founder of Havana Central, both reported an uptick in visitors recently. Unlike pre-pandemic times, though, many of the visitors now are either locals or from the tri-state area as the pandemic has largely brought international travel to a halt.
Reopening Music Venues
Restaurants could require proof of COVID-19 vaccination. With coronavirus vaccinations underway and a recent decrease in COVID-19 cases, fans of live music, eating out at restaurants and going to watch a movie or play in a theater are finally able to entertain the notion of returning to leisure activities that have been largely shuttered since March 2020. While members of the public have been champing at the bit to resume “an evening out,” their cabin fever is dwarfed by the financial devastation suffered by restaurants, bars, music venues and theaters — many which have closed permanently. That raises the question: Can music venues, restaurants and theaters require proof of COVID-19 vaccination as a requirement for admission to maximize the chances of businesses remaining open? Yes, they can, according to D.C.-area attorney Mark Dycio, who represents entertainment and other hospitality industry clients.
How Restaurants Survive
The long pandemic winter. New York City’s first blizzard of the season whipped in on a Wednesday evening in mid-December. Earlier in the day, the air had had that damp chill that even RealFeel can’t get right; people wedged through it with lowered foreheads and solstice scowls. All over town, restaurant owners and managers were making their own calculations. Open up just for lunch? Close until the weekend? Shut down indefinitely, or even for good? No matter how you ran the numbers, the outlook was dire. It encapsulated, in miniature, the extinction threat facing them all. Two days earlier, New York State, citing a steepening of the covid curve, had banned indoor dining again, after having permitted it for ten weeks, at twenty-five-per-cent capacity. Justifiable as the decision was in epidemiological terms, the timing seemed cruel, what with a forecast of gale-force winds and a foot of snow. In anticipation of the storm, the city had ordered restaurants to shut down outdoor dining that afternoon by 2 p.m. As for the dining structures that restaurateurs in all five boroughs had erected on the street—the sheds, tents, lean-tos, stables, barns, bubbles, tepees, and yurts, as well as the heating appliances, the planters and plastic flowers, the canopies of fairy lights and power cords, the wooden gangways and plexiglass dividers—no one really knew for sure what was allowed and what wasn’t, in the event of snow. Were they required to dismantle everything?
Dancing to be Allowed at Catered Affairs
Cuomo announces. It’s like when actor Kevin Bacon yells out “Let’s dance!” at the end of the 1984 film ”Footloose.” Like the movie, in which dancing is banned in a small U.S. town, moving and mingling on a dance floor — even outdoors — has been prohibited during the coronavirus (COVID-19) pandemic across New York state. But Gov. Andrew Cuomo announced on Monday that socially distanced dancing and ceremonial dances will be allowed at catered affairs, including weddings, of up to 150 people or 50% capacity of a catering hall room come March 15. However, there are still strict guidelines under which these parties can occur.
Governor Cuomo: Accused of Waging a War
Against the hospitality industry. The reason that Mickey King can name every Governor of New York State starting from Thomas Dewey, the state’s 44th chief executive who served from 1943- 1954, up until the current Governor Andrew Cuomo, the state’s 56th leader who has served from 2011 to the present, is that the names of every one out of the total of 12 appears on the 75 year old guest book list of Antun’s- an iconic Queens catering hall founded in 1945 by its eponymous owner, Frank Antun, and bought by Mickey’s father Joe in 1996. “Right here in our guest books are the names of 12 governors who have attended at least one event at Antun’s,” said King the long-time chief operating officer and the current president of this tightly knit family business, at the start of a recent interview with me. Beginning, though, shortly after the COVID epidemic struck the world in February 2020, King explained that his respect for Cuomo descended into the deepest level of contempt. By issuing edicts that totally closed restaurants down and later edicts that reduced capacity to a mere 25%, Governor Cuomo has declared war against the entire hospitality industry, which includes restaurants, bars, hotels and catering halls, employing in total approximately 900,000 women and men, pre-COVID,” King charged.
Did You Know?
The 30 best restaurants in New Jersey. New Jersey is a small state, but the New Jersey Monthly dining team typically racks up thousands of miles each year to evaluate its restaurants. Not only did Covid-19 preclude such travel, but for much of the year, restaurants were shadows of their normal selves. Indoor dining did not resume until September, and then at just 25 percent of capacity—a level few chefs see as sustainable. The public’s willingness to dine indoors also remains to be seen. Appearing in the Top 30 for the first time are Aarzu in Freehold, Café Chameleon in Bloomingdale, Il Nido in Marlboro, James on Main in Hackettstown, and Turtle and the Wolf in Montclair, all of which we visited this year.
All the things our restaurant jobs made us hate. The skills you gain working at a restaurant stick with you forever, whether it’s being able to wash dishes faster than anyone you know, balance a tray of shallow martini glasses without spilling, or master the firm but friendly smile as you tell an entitled, drunk bro that, sorry, there is absolutely no way you can seat him and his date right now, but you can put his name on the list. But those skills usually come with a curse — that is, of knowing exactly how a restaurant runs. Sure, most high-end restaurants are safe and clean and are only guilty of putting an ungodly amount of butter in every dish. But if you’ve worked a chain, fast-food place, or just your average neighborhood pub, you’ve probably seen or heard some shit that now directly impacts your ability to eat out. Maybe you know just how much sour mix the bar goes through or can’t un-smell the scent of black olives straight from the industrial-sized can or were doomed to listen to one novelty playlist every shift for four years.
Bielat Santore & Company – Restaurant Industry Daily Alerts
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Bielat Santore & Company is teaming up with SCORE NJ, the states’ largest network of volunteer, expert business mentors in a series of webinars on small business financing for the hospitality industry. The initial webinar will be presented on Thursday, March 4th. Sign up now!
The Little Black Book on Small Business Financing
Shortly after their March 4th webinar, Bielat Santore & Company will be releasing its newest library resource, “The Little Black Book on Small Business Financing.” This handbook will describe the financing sources available to small businesses, outline the steps necessary in preparing the requisition package required to obtain such financing and provide a glossary of financing terms you may or may not be familiar with. You can find this valuable resource on our company website’s “Resource Library” page below. Keep your eyes open for it’s release!