NYC To Aid Restaurants Impacted By COVID-19: Here Is How They Can Help You

NYC Council Passed New Bills To Aid Restaurants, But What Do They Mean For You?

This week, the New York City Council passed bills to aid NYC’s small businesses struggling during the COVID-19 crisis, with Speaker Johnson saying, “Small businesses and restaurants are the heart and soul of our city. They were struggling before COVID hit and this shutdown has been catastrophic for so many of them. This is not the time for our restaurants to pay high fees, nor should any COVID-impacted businesses be exploited by their landlords.” 

While these bills aim to protect “the heart and soul of New York City”, we have been focused on helping restaurants:

Renegotiate their existing lease to a “percentage lease” to appropriately reflect the ongoing hardship

In short, a percentage lease in this case means restaurant owners will use their current cash projections (taking into account COVID-19) to work with his / her Landlord to structure rent tiers; below a certain threshold of revenue, the tenant will pay $0 in rent and each tier will represent a proportionate amount of rent up to the full amount.  This solution allows for transparency between tenant and landlord as it relies on an open book policy and solves for our Tenants’ immediate cash preservation needs. 

For tenants with less than 2 years left on their lease, sign a new ‘blend and extend’ lease;

In exchange for the longer term commitment, you will receive several months of free rent now to alleviate cash constraints and favorable economics relative to what you were paying before COVID-19. This solution solves for our Tenants’ cash preservation needs and the Landlord’s longer term vacancy concerns. 

Negotiate abated or deferred rent now while keeping the existing lease in place using one of these solutions between Tenant and Landlord.

One of the bills passed Wednesday suspends the personal liability clause (aka Good Guy Guarantee) found in many tenants’ leases, so while your personal assets are now shielded in the case of a lease violation –in this case, failure to pay rent—we still advise communicating with your Landlord to structure a solution that works; remember even solutions where you pay no rent now are better for the Landlord than longer term vacancy, so we’ve seen tenants and landlords collaborating in a stronger than expected way over the last 8 weeks. 

Here is a rundown of the just-passed bills and what it means for you: 

Suspension of Personal Liability Clause (or the Good Guy Guarantees):

The City Council passed a bill that protects COVID-19 impacted business owners’ personal assets from being taken in the case of a commercial lease violation. The suspension of the personal liability clause will give more New York City business owners a chance to reopen and operate in the future. [Read the bill]

No Sidewalk Café Fees:

Sidewalk café fees will be waived through February 28, 2021, under a bill led by Bronx Councilmember Andrew Cohen. Both the City Council and the Mayor’s office are working on how sidewalks and streets can be used to help restaurants reopen once New York City begins the reopening process. [Read the bill]

Protecting Tenants From harassment:

Legislation from Council Member Adrienne Adams would place a $10,000 to $50,000 civil fine on landlords for threatening commercial tenants who have been impacted by the coronavirus pandemic. Commercial tenants affected by COVID-19 will be added to a list of protected classes during the health crisis. [Read the Bill]

Delivery App Fees Capped:

A bill sponsored by Councilmember Francisco Moya restricts commission fees charged by third-party apps like Grubhub, Doordash, and Uber Eats at 20 percent surging any state of emergency and 90 days following. Before this, third-party delivery apps could charge fees as high as 40 percent of revenue. Moya’s bill prohibits third-party ordering applications from charging more than 15 percent commission on deliveries and more than 5 percent for all other charges, including credit card processing. [Read the bill]





If you’re an New York City restaurant (or other retail tenant) looking for guidance, please do not hesitate to reach out to , cofounder of Vicus Partners. We’ve represented tenants only (and never landlords) since 2007 and our representation comes at no cost to you as a tenant; especially now, we’re grateful to be in a position to bring tangible solutions to you during these difficult times. 

Check out our post: “NYC Restaurants Prepare for COVID-19 Recovery”