Personal Finance

'It's a new planet overnight': New York City businesses hit hard by coronavirus pandemic

Key Points
  • The coronavirus has wreaked havoc on local businesses in New York as customers have stayed home out of fear and lawmakers have shut entire sectors of the city's economy to halt the disease's spread. 
  • "We're trying not to lay people off," said Gary Greengrass, the owner of a Jewish deli on the Upper West Side. "But if this goes on for three or four months, we'll need help." 
Daniel Harison, a barista at Velvette Brew, a coffee shop in Park Slope, Brooklyn.
Greg Iacurci

A palpable chill had settled over Park Slope on an otherwise beautiful Monday evening.

The brownstone-lined streets of this South Brooklyn enclave, typically abuzz with commuters at peak rush hour, were near empty. Stores of all kinds — from restaurants, cafes and bars to gyms and bodegas — were closed until further notice.

For a city that never sleeps, the lethargy felt out of place.

But it has become the new normal in the age of the coronavirus, which has wreaked havoc on local New York businesses as customers have stayed home out of fear and lawmakers have shut entire sectors of the city's economy to halt its spread. 

"I feel like the shock is setting in right now," said Kyle Miller of Calexico, a Cal-Mex restaurant with seven New York locations.

"Everything's on hold," said Miller, assistant general manager of Calexico's Park Slope eatery. "We're doing the best we can."

Barney Greengrass, a Jewish deli on Manhattan's Upper West Side.
Source: Barney Greengrass

Gary Greengrass, the owner of Barney Greengrass, a Jewish deli in business on Manhattan's Upper West Side since 1929, said he's never seen the place so quiet.

"There's no sporting events; there's no trade shows," said Greengrass. "There's nothing that's going to bring people into the neighborhood, and our regular customers have gone to their summer homes upstate or in the Hamptons.

"It's a new planet overnight," he said. 

The coronavirus health crisis is already expected to push the U.S. into a recession, with record stock losses and unemployment rates spiking. New York has become the epicenter for COVID-19, which has sickened more than 14,000 Americans and killed at least 205. And the worst, perhaps, is yet to come.

Broadway theaters are closed. The Metropolitan Museum of Art, one of the city's major cultural institutions, expects to be shuttered until July. The Metropolitan Transit Authority, which operates the city's public transportation system, is seeking a $4 billion federal bailout.

Brooklyn Boulders, a rock-climbing gym in Gowanus, Brooklyn, is one of many New York businesses that has had to close due to the coronavirus.
Greg Iacurci

Gov. Andrew Cuomo ordered all bars, restaurants, gyms and movie theaters in New York to close to patrons as of 8 p.m. this past Monday, and limited all groups to fewer than 50 people. Bars and restaurants could remain open for takeout and delivery.

That's been a lifeline for Greengrass. He said the deli's taken delivery orders recently from as far away as Washington, D.C., and Ohio. "People are home and have nothing to do and they're placing orders for a taste of New York," Greengrass said.

Yet since delivery accounts for only 30% of sales at Calexico's Park Slope restaurant, the edict means taking an immediate 70% hit to its bottom line. Revenue had already been down about 30% to 40% over the weekend.

Managers have had to restrict worker hours, but are incorporating as many people into the schedule as possible to avoid layoffs, according to general manager Amanda Scala. Some have also taken a pay cut to be able to retain hourly workers, she said.

"A little is better than nothing, especially if you can't get unemployment for whatever reason," Scala said.

On Friday, Cuomo announced a further tightening of restrictions, ordering non-essential businesses to keep 100% of their workforce at home starting Sunday. 

Greengrass said he ordered deli waitstaff to remain at home since customers can't sit down on site with their bagels and lox. "We're trying not to lay people off," he added. "But if this goes on for three or four months, we'll need help." 

Khayla Carway and Kyle Miller behind the counter at Calexico in Park Slope, Brooklyn.

State and federal officials are trying to save the city's business owners — and their workers — from further economic damage.

Some small businesses with significant sales declines due to the coronavirus will be eligible for zero-interest loans of up to $75,000 and grants to cover 40% of payroll costs for two months, Mayor Bill de Blasio said March 8. "We are looking into any possible way to help small businesses," said Julia Arredondo, deputy press secretary for the mayor. She added that "businesses in every sector" have expressed interest in the loans and grants. 

Meanwhile, in Washington, Senate Republicans on Thursday unveiled a relief package that would include $300 billion in loans for small businesses, which could get up to $10 million each. The proposal, estimated to cost at least $1 trillion, would also provide checks as large as $1,200 for each American adult earning less than $99,000.

Still, the volume of laid-off workers seeking unemployment benefits in New York state more than tripled on Monday, to levels not seen since right after 9/11, the state Labor Department said this week.

Leila Flatsousis, the owner of Delilah Salon in Brooklyn's Gowanus neighborhood, said business had been slow for the past month but dropped off precipitously last week.

"People are afraid," she said. "They cancel reservations last-minute.

"It's tough, because your expenses obviously don't stop."

Delilah Salon in Brooklyn.
Greg Iacurci

Not all stores appear to have been hard-hit, though.

Book sales have been holding up well at Shakespeare, a bookstore-cafe with two Manhattan locations. At the store's Broadway location on the Upper West Side, a section has been created for books on viruses and pandemics. 

"I'm hoping [that] with a lot of social distancing, people will read," said Dane Neller, the company's CEO.

Business has been "a little slower" at Velvette Brew, but "it hasn't been much," said Daniel Harison, a barista at the coffee shop, which has two locations in Brooklyn.

Velvette is fortunate, he said, because most of the shop's customers can take drinks and food to go, which at least keeps New Yorkers walking in the door. 

He's optimistic about the future.

"You never know what could happen tomorrow," he said. "Maybe it will be some kind of good news."

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Upper West Side restaurant Good Enough to Eat, a farm-to-table restaurant, is used to having lines for its brunches on weekends.

But about a month ago, business started to slow down, despite warmer weather.

"What we saw is less tourism … every week it grew," said Jeremy S. Wladis, managing partner at The Restaurant Group, which operates Good Enough to Eat and two other nearby restaurants in the neighborhood, Brad's Burgers and BBQ and Harvest Kitchen.

Now, the company is continuing to keep its restaurants open for delivery and takeout only, despite very low customer demand. Wladis estimates they have lost 90% of their business in recent weeks.

"We have 100 employees, and they're going to be flat busted broke," Wladis said.

Now just 15 of those employees are still working, albeit part time.

"We're losing money keeping them open," Wladis said of the restaurants. "But we're trying to keep some people with some hours to try and feed some people's families."

Igor Segota, general manager at Good Enough to Eat, started working at the restaurant six months ago, after working at many other restaurants in his 30 years living in New York.

Igor Segota, general manager at Good Enough to Eat, said the restaurant is trying to survive day by day.

"I've been through September 11; I've been through Sandy," Segota said. "But I've never seen such a drop of people coming out."

Segota said he is not only worried about his job, but also those of the servers, kitchen crew, dish washers and other staff.

"We live day to day," Segota said. "We don't know what's going to happen tomorrow."

For now, Wladis is trying to support all of the employees by offering them daily meals. He has also set up a Go Fund Me page for donations.

Just across the street from Good Enough to Eat, another restaurant named The Consulate is completely closed.

The move to temporarily shutter the business comes just four months after the restaurant, which offers international cuisine, opened.

"The business was great. Since day one, we have amazing business, a lot of customers, until the coronavirus," said Metodija Mihajlov, general manager of The Consulate.

But the virus changed things drastically. Last Sunday, instead of having 300 customers, The Consulate had zero.

The restaurant decided not to stay open for delivery because Mihajlov didn't want to endanger its employees. Plus, he didn't think there would be demand for take-out food.

The Consulate displays a sign urging New Yorkers to stay strong while the restaurant is closed due to the coronavirus.

Now, the restaurant's 48 employees are collecting their pay for the last week.

"Everyone is going to apply for unemployment, including me," Mihajlov said. "It's difficult for everyone."

The struggle to adjust to new circumstances has not only been hard for restaurants, but other local neighborhood businesses, as well.

At Upper West Side Yoga and Wellness, a self-described mom-and-pop neighborhood studio, the big challenge was how to adjust to the new circumstances quickly.

Now, the studio is offering its classes online.

"We just changed our whole business model in two days," said Stephan Kolbert, who co-owns the studio with his wife, Ingrid Marcroft.

The switch has provided a way to keep its yoga community together in a different, sometimes more personal way, Kolbert said. Now, you can see people's pets in the background or children leaping over their parents while they're in savasana pose.

Ingrid Marcroft, left, and Stephan Kolbert, co-owners of Upper West Side Yoga and Wellness, quickly moved to offer online classes in the wake of coronavirus.

It has also allowed its teachers to continue working from wherever they are, and have some money still coming into the business.

Still, it's been a dramatic shock for a business that typically relies on people coming in person to take classes. That came to a halt, however, when government officials urged people not to gather.

"Fortunately, technology is where it is," Kolbert said. "Ten years ago, we wouldn't have been able to do this.

"We would have been out in three seconds."