According to National Restaurant Association estimates, the COVID-19 pandemic has shuttered one out of every six restaurants nationwide. In New York, the pandemic has forced restaurants to operate in what New York State Restaurant Association President and CEO Melissa Fleischut calls “survival mode,” adapting (often quickly, and with admirable and praise-worthy ingenuity and creativity) to indoor dining capacity limits, embracing outdoor dining solutions, and transitioning to exclusive take-out and delivery models where required by local or state mandate.
Earlier this month, New York State announced an aid program for restaurants in survival mode: the “Raising the NYS Bar Restaurant Recovery Fund,” a $3 million fund from which grants of up to $5,000 will be paid to eligible small businesses. The program, the State explained, is designed to support full-service restaurants (“the industry hit hardest by the pandemic”) during New York’s cold winter months when outdoor dining options are limited and as restaurants continue to adjust and adapt to shifting COVID-19 safety restrictions and regulations. The Fund is a partnership between the State, Diageo Wine & Spirits, Southern Glazer Wines & Spirits, and the National Development Council (the last of which manages grant funding for the program).
What do business owners curious about the Fund need to know? Restaurant owners should first confirm program eligibility. To receive funds, a business must be located in New York and:
(1) Be either a full-service restaurant as defined by NAICS Code Section 722511 or an establishment that prepares meals on-site for patrons who order and are served while seated in the facility (waitstaff service) (this includes businesses licensed as on-premises food and drinking establishments through the State Liquor Authority, as well as businesses that, due to the pandemic, are currently providing food to customers through a take-out or “grab and go” model; franchises are not eligible);
(2) Have no more than $3 million in 2019 revenue;
(3) Have been in operation since at least March 1, 2019;
(4) Certify and demonstrate that it has experienced “financial hardship” due to the COVID-19 pandemic (including through tax returns and income statements); and
(5) Agree to comply with all applicable state and local-level health and safety policies and reopening guidelines, including State Liquor Authority and Department of Health regulations and New York Forward and Cluster Action Initiative guidelines.
If a business is eligible, it may apply for a grant from the Fund. The maximum total grant award per business is $5,000. Grants will be supplied, the State explains, “on a reimbursement basis”: Businesses pay out-of-pocket for improvements or equipment and then seek reimbursement through the Fund. Items available for reimbursement through grant funds include: (1) business improvements or equipment that allow compliance with social distancing guidelines, facilitate expansion of takeout or delivery operations, or accommodate outdoor dining options (examples the State provides include plexiglass barriers or partitions separating staff from tables, bar patrons, or customers ready to pay bills, or separating tables or bar patrons from each other, signage explaining safety protocols, heat lamps, patio heaters, weatherization upgrades, and insulated food delivery bags); (2) improvements that enable businesses to operate through the cold winter months (i.e., food heaters for to-go orders and upgrades to air filtration systems); (3) purchases of sanitation and cleaning supplies and PPE; and (4) pandemic-related business improvements (i.e., contactless technology for credit card payments, tipping, etc.). Only purchases made after September 1, 2020 are eligible for reimbursement from the Fund. Any expenditures made by restaurants in the earlier days of the pandemic (i.e., August 31, 2020 and earlier) are not eligible.
The Fund is currently accepting applications, which can be submitted online at: nysrestaurantrecovery.fluxx.io. Applicants should be prepared with the following documents: (1) a current government-issued photo ID for every person owning 20% or more of the business; (2) the business’s 2019 federal tax returns; (3) a 2020 income statement; (4) any State Liquor Authority license; and (5) proof of the eligible expenses incurred after September 1, 2020 for which the applicant is seeking reimbursement from grant funds. Proof of capital expenses (i.e., upgrades to physical restaurant premises) should include receipts for equipment, labor, and construction.
It’s worth emphasizing that initial grant funds are limited. Accordingly, the State’s online portal may close if the number of applications exceeds available grant funding. If State review determines that some applications are ineligible, the portal may later be reopened for new applicants. Eligible business owners looking to secure reimbursement of allowable expenses would do well to act quickly to compile necessary documentation and submit their applications.