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Business is all about the numbers, but not necessarily the money. Headlines in millions of dollars can look like they solve a problem — but they don’t.
“Before COVID, I walked down 9th Ave from 57th to 42nd St and counted 22 empty businesses,” recounts Sean Hayden, owner/partner at Jasper’s Taphouse and Kitchen, and four other bars including McCoy’s, Dalton’s, and Valerie in Midtown. “Now there are five bars that I want to see open. We managed to re-open Jasper’s because we can seat 40 on the street. Alfie’s should follow in two weeks’ time.
“The PPP helped, but is it debt? Or is it forgiven? It’s so complicated. Across the five bars we had over 140 staff. I want to get them back working.”
Let’s take a deep dive into the big numbers. We took the government data, found the Midtown/Hell’s Kitchen zip codes of 10018, 10019 and 10036, then stripped out all the businesses east of 8th Ave.
Zip codes 10018, 10019 & 10036 accounted for $2,190 million of PPP grants – Hell’s Kitchen accounted for around a quarter of this at $572 million.
This shows the disparity between bigger Midtown business and the smaller operations in Hell’s Kitchen.
The $572 million was distributed to 2,309 Hell’s Kitchen businesses. 74% of those businesses got less than $150k
Full disclosure here, W42ST’s publishing company — KOB Publishing LLC, received a PPP loan of $24,330.
Businesses reported they were retaining 31,742 jobs through the PPP process. The average cost was $18,049 per job retained.
Many small business owners shared frustration that their limited resources were stretched to bring in small amounts of money, while big organizations brought in millions. Chantal from Pure KTCHN‘s story was typical: “We received $12,800 from our lender, Square. It was the incorrect amount. We spent many hours trying to sort this, but with no change. The PPP loan was helpful because money is money. However, it was not enough by far. It was very frustrating to have this experience and then to hear that larger, million-dollar corporations were getting millions of dollars in PPP loans, and then smaller businesses were fighting on the phone to receive fractions of that.”
“The only thing that I found frustrating was the fact that our actual PPP amount was based on our average payroll for 2019,” said Max Bidna, co-founder of Hell’s Creative marketing agency. “Our team doubled in size at the very end of 2019 so the loan amount felt small compared to our payroll. But we are grateful for anything really.”
Four businesses in the area received loans of $5-10m. They are:
FIRST QUALITY MAINTENANCE II LLC (0 Jobs Retained)
AVONDALE GROUP INC. (500 Jobs Retained)
SUPERIOR CLEANING SERVICES NY LL (0 Jobs Retained)
MAGNIFICO INC. (441 Jobs Retained)
Maria Lanza from David Ryan Salon shared the frustration of many about the unfairness of money going to big businesses and big names: “I think they should just forgive the loans for all REAL small businesses, considering that many billionaires had access to it, including Kanye West.”
We scanned the lists for businesses we know. Here are some of the highlights.
In the $2-5m bracket:
GAY MEN’S HEALTH CRISIS INC, MANHATTAN THEATRE CLUB INC, ALVIN AILEY DANCE FOUNDATION INC, THEATRE DEVELOPMENT FUND, MOTHER INDUSTRIES LLC, INTREPID MUSEUM FOUNDATION, and NEW YORK CRUISE LINES INC.
In the $1-2m PPP loans:
JEFF KOONS LLC, KARLA OTTO INC, SIGNATURE THEATRE COMPANY INC, PLAYWRIGHTS HORIZONS INC, OPEN ROAD OF MANHATTAN AUDI, and METROPOLITAN LUMBER & HARDWARE.
The top hospitality loan was for Marin in NYC, which runs The Press Lounge and PRINT restaurant on 11th Ave, to retain 110 staff.
One of the surprises was a loan of $350k-$1m to The Upright Citizens Brigade Training Center to retain 81 staff. Back in April, it shuttered its W42nd St theater and training center. One former UCB executive told us: “I heard they got the loan. It may have helped pay my severance and a couple months more of health insurance, but for the most part it seems like the company is keeping the money as a low-interest loan rather than paying its former employees. Honestly, pretty gross, if you ask me.”
The overall feeling from the smaller Hell’s Kitchen businesses was that the PPP was a lifeline, but it’s just not enough.
Matt Fox from Fine & Dandy told us: “Yes, we received the PPP. But I think the bigger issue will be life after opening. Business is drastically reduced (no tourists, Broadway, weddings, galas, etc). We rely on holiday sales. How will we come remotely close to making our goals? I’m hopeful that we’ll see another (better administrated) small business stimulus. But I’m not holding my breath.”
Bryan Ware from Fresh From Hell tells a similar tale, with more numbers: “The PPP money was the only way we were able to reopen. Sadly, our sales are only at 10% what they were before COVID-19. Now, with the news that Broadway shows are not coming back before 2021, we really don’t have a good outlook for the business moving forward. Before this, tourists visiting Times Square/Theater District made up 50-60% of our sales. I understand why McDonalds on W42nd St is closing – we thrive off tourism. Now we are depending on local support (which we thank so much), but many do not have much money to spend right now either.”
Andrew Cole, from Mark Fisher Fitness, said the boutique Hell’s Kitchen gym was able to use its PPP money to retain the full team for eight weeks, from mid-April to mid-June. “The PPP ‘worked’ for us in the sense that we were able to keep operations trucking during a time when our doors had to remain closed. (They still are.) We pivoted to offering virtual fitness classes on Zoom via our new HomeBody membership.
“Among other projects, we used our PPP time with the full team drafting a robust safety and cleaning protocol that will be put into action when we are allowed to re-open our doors.”
But with no sign on the horizon that gyms will be able to open anytime soon, Mark Fisher added: “We’re praying that the worst case scenario doesn’t play out for timing. Cuomo has hinted no legally opened gyms in New York State till 2021/a vaccine is ready. While we understand the need to keep people safe, we think there’s nuance missing and many facilities could thoughtfully and safely resume operations before then.”
Many businesses are just trying to deal with the changing landscape of our streets. Dominick Costa, manager at Treadwell Park on W42nd St told us: “The growing safety concerns of Hell’s Kitchen has forced us to shut our doors. We will not be reopening until it is safe for our guests and staff to walk the streets again.”
As with everything in New York, the challenges focus on the rent. “My landlords finished paying their mortgages back in the 1990s, so I think it is time for them to help us,” said David Shakarov from Grum’d on W46th St.
Caroline Bell, founder and CEO of Cafe Grumpy, echoed the sentiment: “Right now, our number one concern is rent. With NYC being so empty and social distancing rules in effect, there is no way most food service businesses can cover the rents that they were previously paying – let alone pay the back rent accrued during the months they were closed.”
Those who have been around Hell’s Kitchen for a long time are grateful for what they have, and sanguine about the opportunities for the future. Amy Scherber from Amy’s Bread told us: “We are very thankful that we got the PPP loan. We really couldn’t have moved forward without it. It helped us to keep our HK store open all this time. We need the restaurant business to reopen so we can make more of our bread for our wholesale customers. We are grateful to our neighborhood customers that have supported us this whole time in HK. Next? Who knows?”
Sean from Jasper’s remains hopeful. He hopes landlords will work with good operators and cut a deal. With the changes in the law that give business renters protection against personal guarantees until the end of September, all businesses are in the position to just forfeit their deposit and walk away. A heart-breaking decision, but when the other options are being in debt to a landlord or bankruptcy, it’s attractive. Sean said: “New York always bounces back. I was here in 9/11 and Sandy. I tell my staff every day to be positive — and realistic.”
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