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Before the pandemic hit New York City 11 months ago, Janine Labriola’s fitness business Ditmas Park was thriving.
A studio that she opened five years ago for classes and personal training was solidly profitable, and the self-service gym she later opened nearby was building a following.
Labriola closed the fitness studio permanently over the summer and was only able to keep the gym open because her landlord agreed to a deal that she only pays half the rent. Most of his Park Fitness BK clients are either too scared of COVID-19 to come to the gym on Coney Island Avenue, or have left town for somewhere else.
Some days she registers a new member but often two cancel.
“I cut my losses and closed a thriving business,” she said. “I don’t even know how much debt I am. “
As the shutdown that sent the city’s economy into a tailspin approaches the one-year mark, the outlook for small businesses in New York is worsening, new data shows. Companies that hang on are doing so because their landlords have decided that a rent is better than no tenant – and because a new round of federal paycheck protection program loans offer hope of paying some off. bills until the economy rebounds.
“The only reason we survived is because our landlord deferred and forgave the rent,” said Fonda Sara of Zuzu’s Petals, a 50-year-old florist at Park Slope. “As long as my landlord enjoys my rental, everything will be fine. “
Meanwhile, Blasio’s administration claims to have provided 108,000 services, ranging from help with raising money to webinars for local small businesses. She, too, is banking on the latest PPP loans, which include funds earmarked for very small businesses, to support many homeowners.
“The Biden administration is a breath of fresh air,” said Jonnel Doris, commissioner of the city’s small business services department.
“Nobody came back”
Despite a slight increase during the holiday shopping season, small business revenues slide back to March lows, according to a recent report from City Comptroller Scott Stringer. Hardest hit are Manhattan businesses deserted by tourists, office workers and many residents.
Revenue there is down 65% from the same period a year ago, with drops of 40% in Queens, about 35% in the Bronx and Brooklyn, and 22% in Staten Island.
The city-wide average drop of 50% is similar to that of Washington, and slightly better than that of Boston and San Francisco, both of which have the same ailments as Manhattan.
But other cities are doing better, including Philadelphia, where the drop is only 29%.
“The data confirms the realities and unmissable experiences of New York’s small business community on the front lines of the pandemic,” said Randy Peers, president of the Brooklyn Chamber of Commerce. “Revenues are plummeting and the government’s significant and ever-changing COVID-19 restrictions are hurting businesses. “
The Department of Small Business Services reports that New York City has about 230,000 businesses with 125 or fewer employees employing about 1.3 million workers. Including a small business like any other with 20 or fewer employees, the number is around 200,000.
Peers notes that 73% of employees in small businesses in New York City are people of color, with more than half of all jobs in the industry held by immigrants, documented and others – populations that have been hit hard. at all levels by the pandemic.
Thompson Chemists once employed 17 people at their community pharmacy in SoHo. Now Jolie Alony and her husband Gary run the facility with a part-time employee. They keep the door locked and leave customers individually.
“All of our regular customers have walked out of here,” said Jolie Alony. “They left in March for the Hamptons, Rhode Island or Florida.”
She said clients told her they would come back after the presidential election, but “no one came back”.
The couple opened the story in 1994 and the owner lets them pay what they can. “We are very important to her community,” she said.
“We are pressing hard”
Small business owners interviewed by THE CITY all said leasing agreements were key to their survival. Most pay 50% or less.
When Labriola decided to close the fitness studio, she owed $ 14,000 in rent arrears. The owner kept her security deposit but said he would not sue her for the outstanding amount. She notes that no one has taken the space she left.
New York’s current COVID-19 safety restrictions rules would prohibit it from conducting indoor group fitness classes, though gyms are allowed to operate at a third capacity.
The gymnasium’s monthly rent of $ 7,200 has been cut in half, although she is still responsible for utilities. “Who knows when they’re going to ask me to pay him back,” she wondered.
These transactions are done on an informal basis.
“I have an owner who paid off the mortgage,” said Linda Pagan, owner of the Hat Shop on Thompson Street in SoHo, which only uses supplies from New York City except for the shipping boxes. . “Basically he told me not to worry about the rent, and I paid half the rent but I don’t have anything in writing.”
Business owners are also relying on the new series of conditional repayment PPP loans to keep their doors open.
Labriola expects to get $ 37,000 instead of the $ 16,000 she received in the first round because she now knows the loan can cover her own salary.
Alony of Thompson Chemists is expecting another loan of $ 100,000, and Pagan of the Hat Shop is also asking for the same $ 15,000 she received the first time.
“There was a long wait for the second round of federal stimulus,” noted Jessica Walker, president of the Manhattan Chamber of Commerce. “We’re working on getting PPPs and other business support right now. “
Many business owners are angry with their treatment by the city.
“The fitness industry has been completely forgotten,” said Labriola, who notes that her gym has been inspected five times by the city’s health department, one it has scheduled and four surprise inspections.
She said other gym owners she knows haven’t been inspected once.
Alony was fined $ 28,500 from the Department of Consumer and Worker Protection for raising the prices of thermometers and other products in short supply at the start of the pandemic. The prices were only a modest markup on her cost, she said, and the inspector refused to look at her invoices.
A lawyer client has taken charge of her pro bono case and is awaiting the verdict of a virtual hearing on the case.
The Small Business Services Department notes that it has connected 5,000 businesses to $ 125 million in funding, answered 54,000 calls to its hotline for help, and hosted more than 300 webinars attended by 30,000 businesses. on how to pivot, find the money and navigate regulatory issues.
He launched a fair share campaign to ensure that the city’s smallest businesses receive P3 loans in the last cycle.
More generally, according to peers in the Brooklyn Chamber, the government must ease restrictions on key companies.
“We need to lift many state and city restrictions that have had a disproportionate impact on foodservice, hospitality, health and wellness, and entertainment businesses in Brooklyn,” he added.
“After a year of operating under siege, small businesses have demonstrated that they can safely and efficiently manage operations during the pandemic.”
Say it with flowers
The city remains more cautious, even as restaurants reopen for partial indoor meals on Friday.
“The concern is that we have a health crisis that has bought into the economic crisis and we must responsibly tie those concerns to the restrictions,” said Doris of SBS. “The worst outcome businesses tell me would be if we opened and then had to close again.”
Meanwhile, Valentine’s Day gave Sara of Zulu’s Petals some hope.
The Fifth Avenue store has already been destroyed in a fire and rebuilt in part thanks to contributions from its customers. She renamed the florist in an ode to the “It’s a Wonderful Life” scene where Jimmy Stewart’s George Bailey stuffs petals of his daughter Zuzu’s flower into his pocket as a sign of life.
“We’ve been busy this week,” she said. “People seem to want flowers.”
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