If there’s something shared among the nine New York City restaurants and bars owned by Gabriel Stulman’s Happy Cooking Hospitality, it’s that each one feels like it’s been a part of the neighborhood for decades. They’re the restaurants New Yorkers go to for their first dates (Joseph Leonard), to catch up with friends (Fedora), to celebrate birthdays (Simon & The Whale), or to have a quiet drink and burger (Bar Sardine). They’re both nostalgic and modern at the same time.
Since the coronavirus pandemic closed the city’s dining rooms, Stulman has been finding ways to feed his community. At Simon & The Whale, the team is distributing more than 130 grocery bags each week to former employees. Joseph Leonard makes 300 meals daily for local hospitals. Jeffrey’s Grocery, true to its name, has shifted into a neighborhood grocery store. However, Stulman’s other restaurants — Fedora, Fairfax, Bar Sardine, The Jones, George Washington Bar, and Studio — all remain closed.
During this time, Stulman has also been speaking up for restaurant operators, pleading with the city council to amend laws on commercial leases so that restaurants don’t go out of business, and so that their owners aren’t held personally liable for their closures.
Resy recently reached out to Stulman to learn more about what restaurant operators need right now — not only to reopen or rebuild, but to survive. Here’s what he had to say.
Resy: What’s your day-to-day like these days?
Stulman: My day-to-day is a blur. Everyday feels like a Monday is what I’ve been saying for a while — in that everyday feels full speed and intense in the ways that a Monday can feel. Days definitely blur together. Hours seem to fly by.
Ironically, I find myself busier than ever. On one hand, it is a product of the unique circumstances of this pandemic and the work that flows from it: constant conversations with lawyers, accountants, CFO, insurance companies, staying politically engaged, et cetera. And on the other hand, I am very busy with the various initiatives that we have spearheaded in our company.
What do you need for your restaurants to survive?
In order for our restaurants to survive, we need the following:
Amendments to the PPP (Paycheck Protection Program) loan forgiveness regulations: This is unlikely. But we need the rules for conversion from an interest-bearing loan into grants to be modified so it’s a 16-to 24-week window to use the funds versus the current eight-week window. We need the timeline with which to use the funds to start once the business reopens for business versus currently working against an expiring clock while not being allowed to open for business. We need more than 25% to be allowed toward non-payroll expenses.
We need forgiveness and abatement of rents during closed months from landlords, and we need banks to take mortgage payments and move them to the back end of the mortgage term for the landlords.
We need new rent structures of resets on real estate tax and percentage rent deals, and we need these savings to flow through from the state down to the landlord and then to us.
We need insurance companies to be forced to pay business interruption claims.
We need an industry-specific, tailored stabilization fund to bail us out, just like the airline industry, the automotive industry, and the home mortgage industries have all received industry-specific bailout programs in the past. The food and beverage hospitality industry employs more people than all those other industries combined, yet our bailout is bundled with tech companies, law firms, and shoe stores, as if we’re all the same.
We need sustained financial support from the government, banks, and landlords to go toward payroll and rents during the many months of rebuilding in which our occupancy is limited and therefore limiting our revenue. If we have a fraction of our revenue as a result of government mandates toward limited occupancy, then we cannot be expected to pay 100% of bills and labor with less than 100% of revenue.
We need to not be held personally liable for any commercial leases or vendor bills that are unpaid as a result of COVID-19. We need assurance that if we go out of business and never reopen, or if we reopen but can’t sustain the business, that our personal savings and assets are not at risk of being taken. The failure of the business should be sufficient loss for the business owner and the loss of money owed to the landlord or vendor should be their fair share of losses as well. This hurts us all. It shouldn’t hurt one of us more than the other, which is exactly what a personal guarantee can do.
What are the signals from the government, health department, diners, staff, etc., you need to be able to reopen?
I only want the government to allow us to reopen if it is safe for our staff and safe for our guests. Currently, in some states that have eased social distancing restrictions and have begun reopening restaurants, they are allowing only 25% occupancy. That is untenable in our tiny neighborhood restaurants and with the costs of operations in New York City. I only want to be able to reopen if we are given enough occupancy that we can sustain ourselves. Telling us to reopen under conditions that are unsustainable (i.e. 25% or 50% occupancy) isn’t helping us — it’s hurting us more. We are losing money now by being closed. If we are told “you can open under these limitations” but those limitations make it impossible to break even, then you’re not helping us at all. Hold off until you can offer us the opportunity to survive, not just a slow, drawn out death.
Additionally, I only want the government to allow us to reopen if there are no mandates on gloves or masks — if those items are required, and temperatures must be taken at the door, and disposable menus, and door knobs wiped after every contact — it’s impossibly cost prohibitive and beyond that, it’s not an attractive dining experience to me.
I don’t want to eat out if what it means is a 75% empty room, where my temperature is taken at the door and my server is wearing a mask and gloves while they tell me about tonight’s oysters in an empty room. There is no joy in that. The reasons I choose which restaurants to eat at have to do with atmosphere, hospitality, service, food, drinks, music, lighting and vibe. I think a lot of what I and so many people love about restaurants is the camaraderie, the energy, the people and I think a lot of that goes away in a mostly empty room, with a server wearing a mask and gloves.
As an operator, I will do what is required and I will follow best practice recommendations and guidelines. But, I think most of the measures that people are talking about taking will have the effect of improving safety, which is necessary, but it will also have the effect of making dining out at sit down restaurants less enjoyable and ultimately people will be less interested in paying the full cost of eating out to be in a mostly empty room with masks and gloves and temperature checks.
So, only allow [dine in] if we are able to bring joy to the experience.
What should diners know about what’s happening to the restaurant industry right now?
Diners need to understand that we as a society should do away with tipping. The cost of meals should probably be about 40% higher so we can do away with tipping and cover the costs of current minimum wages, rents, insurance, cost of goods, etc.
Unfortunately, that is a price point that I believe nobody is comfortable with. But if we could be as busy as we were pre-COVID at menu prices 40% higher and not lose any covers, then we would be able to pay our staffs better living wages, health benefits, paid vacations, and so much more.
What’s the path forward? What type of business model will sustain restaurants going forward?
The “path forward” is for each individual to decide for themselves. This goes for operators and diners. You need to do something that you are passionate about, first and foremost, and do something that brings you joy.
Empty storefronts were already a fixture in major cities even before the pandemic struck; what happens after this? What’s the value of a brick-and-mortar space in your city, especially in a post-pandemic world?
The value of brick and mortar will always be there in New York City. Always. It’s the capital of the world, and it has finite space. The city was already feeling a compression from the overvalued price demands for rent. We were already seeing a spike in empty storefronts due to too high rents.
A correction in the market was already beginning. This pandemic will accelerate that process. I imagine there will be a lot more empty storefronts after the pandemic passes. The supply of empty stores will be in excess of the demand to fill them and basic economics tells me when supply is in excess of demand for a sustained period of time, that will eventually drive the cost down to a corrected price and once rents come back to reality the spaces will get rented again.
Is the pandemic acting like a reset button for your restaurants or for the broader restaurant industry?
Look, we are forced closed. When we reopen, conditions will be different in every way possible. Some diners will be hesitant to eat out, there will be less discretionary income, there will be mandates on reduced seating occupancy, and there will be new measures taken to prevent the spread of virus and need for heightened preventative actions taken.
By definition, that is a complete restructure. So, is it acting like a reset? There’s no “acting” about it; it is a reset whether you want it, like it or not. Things are different, and will be different for a while.
Legally, we will be prohibited from going back to the way it was before and morally and ethically we should not resume business the way it was pre-COVID, until health and human safety is in a good place.
Do you still want to be operating restaurants after the pandemic ends?
That depends on what operating a restaurant looks like. I really hope so; I love what I do. If I can continue to operate restaurants in a way that brings me joy, that allows me to be creative, that allows me to work with people I love, that allows all of us to be close together and giving each other hugs, high fives, shaking hands, and embracing one another, then unequivocally, yes, I want to keep dining and operating, and creating environments that bring people together to be creative, to create memories and to celebrate life, community and one another. If I can go back to having a business that sustains itself financially and can be profitable then a resounding yes, I want to continue operating restaurants.
If it’s not possible to operate a business in a manner that brings me joy and cannot sustain itself financially anymore, then no; I don’t want to be Sisyphus.
I believe in a restaurant future where people celebrate birthdays, fall in love, flirt with one another, toast glasses with strangers and loved ones, and where you can laugh and smile and hug one another. We will get there again — I am sure of it. And I will still love that about life and restaurants.