NYC restaurants worry customer-density rules will sour reopenings

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Owners of many shuttered Big Apple restaurants are less worried about making rent payments during the coronavirus pandemic than they are about customer-density rules likely to be put in place once they reopen. Le Bernardin chef and co-owner Eric Ripert is hopeful that he can work with his landlord to keep the great, three-Michelin-star seafood …

Owners of many shuttered Big Apple restaurants are less worried about making rent payments during the coronavirus pandemic than they are about customer-density rules likely to be put in place once they reopen.

Le Bernardin chef and co-owner Eric Ripert is hopeful that he can work with his landlord to keep the great, three-Michelin-star seafood palace afloat during the shutdown despite having no revenue.

“We have a very good relationship with our landlord [calPERS management arm CommonWealth Partners] and they are working with us to go through this difficult time,” Ripert said, without going into detail.

But like many owners of the city’s 26,000 eateries, he’s concerned about the future customer-density rules. He said that if Le Bernardin was able to serve, for example, only 50 people at night compared with 150 previously, “We could reopen with a smaller team and survive for a short period of time — not for a year.”

Mermaid Inn and downtown J.G. Melon owner Danny Abrams ruefully recalled that during the few days of 50-percent capacity before the shutdown, revenue at the Mermaid Inn in the former Red Cat space on Tenth Avenue plunged from $10,000 to $4,000 a night — not enough to cover overhead, much less to make a profit.

The venues with the highest exposure to density rules are party-scene mammoths like the Tao Group’s collection of Tao outposts and French-themed jumbo Cathedrale, each with 300-plus seats, where close-packed crowds swarm bars, lounges and even toilet lines.

A Tao Group rep said, “Thank you for thinking of us. We are just not commenting on anything related to the pandemic at this time.”

Meanwhile, despite dire forecasts that the crisis could wipe out half of the city’s restaurants, several well-known operators told The Post that they’re confident they’ll reopen even if the shutdown goes on for several more months.

They didn’t want their names used, fearful that any hint of optimism would encourage their landlords to demand full rent and send the wrong signal when many other owners face bleaker outcomes.

CBRE global brokerage chief Stephen Siegel, who’s also the main owner of Knickerbocker Bar & Grill, said, “I think it’s unlikely that Danny Meyer’s restaurants will not reopen.” But he added, “It’s a different story for others unless they’re fortunate enough to own their buildings.”

Even those who own their property can be in a pickle. Dino Arpaia owns the four-story building at 65 E. 54th St. that’s home to his popular trattoria Cellini. But his upstairs apartment tenants moved out after the virus hit town. He still must pay nearly $200,000 in annual real estate taxes — less than a lease would cost but there are mortgage payments on top of that.

Once he can reopen, Cellini might have only 30 percent of its usual business, due to density rules and customer wariness. “But our overhead would be almost the same. You’re paying as much for Con Ed gas as if you had 300 customers a day.”

In a climate where national chains as large as Panera Bread and Dunkin paid between zero percent and fifty percent of their April rent, according to the Commercial Observer, New York’s owners are just as far apart on landlord-negotiation strategy.

Yann de Rochefort, who owns the Boqueria tapas eatery mini-empire, proposed in a column that, “We stop time. We institute a moratorium on commercial and residential rents, mortgage and debt payments for the duration of the crisis. Banks can and will be backstopped by the government.”

But until and unless that happens, most small and medium-size operators are talking to landlords about rent forgiveness or at least deferments. The smart strategy, dealmakers say, is conversation — not confrontation.

Independent commercial broker Stacey Kelz, who’s negotiated many Manhattan eatery leases, advised, “Reach out to your landlord. Call them. Don’t just stop paying rent.”

Jeffrey Bank, the CEO of Alicart Restaurant Group, which owns big-volume Carmine’s and Virgil’s Real BBQ, said, “Here are words you never thought you’d hear out of a restaurateur’s mouth — please help my landlords so they can help me.”

But lawyer David Helbraun, whose firm represents nearly 1,000 restaurants, advises clients not to rush into landlord talks yet.

“Everyone says they want to make a deal. We say to them, ‘How can you do that until you know what the new landscape will be?’”

The most confident voice is that of hotelier Ian Schrager, whose Edition by Marriott hotels and The Public hotel have high-volume eateries.

He said, “I think the restaurant business will respond quicker than the hotel business,” which depends on travel volume.

“I don’t believe there’ll be a paradigm shift,” Schrager said. “Everybody always says things will permanently change — and they don’t.

“I’m certain things will return to normal, not in years but in months. We will absorb trauma and learn how to adapt.”