City Council Extends Liability Protections For Struggling Restaurants, Small Business Owners Until April 2021

The City Council voted this week to extend liability protections for restaurant and bar owners until well into 2021, an important piece of legislation for an industry that is increasingly desperate for help as winter approaches.

The Council voted on Wednesday to temporarily suspend personal liability provisions for restaurants and other small business owners who have been affected by the pandemic and have been unable to pay their rent.

Small business leases often have provisions that hold a business owner personally liable if they are unable to pay rent; this bill protects business owners’ personal assets from being taken if their business has been affected by the COVID-19 safety guidelines. In addition to restaurants and bars, this also covers businesses that were required to close to the public and cease operations altogether, like gyms, fitness centers, movie theaters, barbershops, hair salons, tattoo or piercing parlors and related personal care services.

“The COVID-19 pandemic has devastated so many of our city’s small businesses,” said Council Speaker Corey Johnson. “These businesses are the heart and soul of New York and they need our help right now.”

This measure was among many, including capping delivery app fees and no sidewalk cafe fees, that was enacted in May to protect small business owners during the crisis; it was set to run out on September 31st, but has now been extended through March 31st, 2021.

“I’ve been kept up at night by the stories of the small business owners who have called my office, come to our hearings, and sent me messages on social media, all in the hopes that they will be able to preserve their stores, their dreams, and their chance to recover from the COVID-19 pandemic,” said Councilwoman Carlina Rivera, one of the sponsors of the bill, who added that they “were able to ensure that business owners, should they be forced to walk away or temporarily shutter their stores through no fault of their own, could do so without facing threats to their life savings and personal assets.”

Andrew Rigie, executive director of the NYC Hospitality Alliance, previously said that if the personal liability clause were to expire, a “massive wave” of restaurant closures would likely ensue.

“We’re grateful to supporters in the City Council for passing and extending critical legislation that protects tens of thousands of small business owners from personal financial ruin and landlord harassment,” Rigie told Gothamist. “Small business owners should not be held personally liable for the economic crisis resulting from the COVID-19 pandemic, nor faulted for complying with government safety mandates to pause operations and then reopen at reduced capacity.”

Another move that restaurants have been clamoring for would be extending the outdoor dining program into winter. At the start of the week, Mayor Bill de Blasio said during a press conference that it was “on the agenda” and suggested the city would be ready to announce it soon, but he has offered no updates since. In the meantime, other lawmakers have introduced two pieces of legislation that could help make the Open Streets and Open Restaurants programs—the later of which is is currently set to end on October 31st—permanent in the city.

One new bill, sponsored by Council members Antonio Reynoso, Keith Powers, Mark Levine, and others, would make outdoor dining a permanent fixture in the city, and would also stipulate that outdoor propane heaters, which aren’t currently allowed, could be used by businesses. A hearing on that bill will take place next Wednesday.

The other bill, sponsored by Comptroller Scott Stringer and State Senator Jessica Ramos, would make the Open Streets program year-round, and by extension allow the Open Restaurants program to continue unabated.

“The Open Streets program helped revive our City after the darkest days of the pandemic, and this is exactly the kind of creativity and smart urban planning we need now to jumpstart our economic recovery,” said Comptroller Stringer. “Why end an initiative that generates critical income for restaurants, keeps workers employed and allows New Yorkers to spend time safely outdoors? Instead, we should extend the Open Streets Program year-round, provide guidance around heat lamps and other ways to adapt for cooler weather, and expand the program so that more small businesses and retail establishments can participate.”

There are over 87 participating Open Restaurant streets altogether across the five boroughs; last week, the city announced that 40 of these locations would get expanded weekday hours for the first time. Altogether, there are 10,343 restaurants currently utilizing outdoor spaces around the five boroughs for dining.

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