For over a year, diners packed into outdoor eateries lining streets like St. Mark’s Place in the East Village and Fifth Avenue in Brooklyn, many into structures outfitted with windows, television screens and heat lamps where parking spaces and bus lanes once were — many times bisected by heavily traveled bike lanes.
This new form of outdoor dining has been a lifeline for some 11,500 New York City restaurants that have taken advantage of the Open Restaurants program. What started as an emergency policy to help struggling businesses has become a fixture of life in the Big Apple and changed the business playbook for restaurants and their landlords.
As owners see an expansion of their business, landlords have begun to use prime outdoor space as a bargaining chip in lease negotiations. The temporary Open Restaurants program will remain in effect for at least another year, and the Department of Transportation is overseeing the implementation of a permanent program, which would streamline the process and eliminate zoning restrictions that previously prohibited outdoor dining in some areas.
While the details of the plan have yet to be etched, there will likely be a fee associated with securing a permanent permit, lawyers and industry experts say, and if the cost is too high, it could prevent some mom-and-pop restaurants from keeping their patio lifelines.
Before sketching out the rules, the city has to contend with backlash. At recent community board meetings in the East Village and Upper East Side, residents have decried the program, claiming street dining has changed their neighborhoods for the worse. But city officials have made clear they intend to follow through on a permanent program, meaning the outdoor dining takeover is, in some form, here for good.
Before the coronavirus pandemic, only 1,200 city restaurants had a sidewalk café, Rigie said, or roughly 10% of the number that the NYC DOT says have outdoor seating today. This was largely due to the high cost of securing a permit and the geographical limits of the areas zoned for outdoor dining, he said.
Below 96th Street in Manhattan — the most expensive outdoor dining rents pre-pandemic — it cost restaurants between about $2,580 and $5,160 to use 70 SF of sidewalk space and an additional $40 per SF beyond that, according to the city’s 2018 consent fee grid for outdoor dining.
“The problem with these prohibitive prices is they are … making themselves available to these large spaces that are owned by large hospitality groups and very wealthy individuals rather than these mom-and-pops who just simply can’t afford spending $2K or $3K a year on four seats outside of their bakery,” Seelig said. “It’s got to be low enough that there’s no competition for spaces, it’s got to be low enough that it doesn’t create the secondary market for spaces.”
The past year has been an experiment not only for what no-cost outdoor dining setups can do for businesses but also what it can do for the city’s economy and tax revenue as well, he said.
“If anything, this pandemic has shown us the ridiculousness of that whole previous licensing scheme,” Seelig said. “I think it’s time for the city to see they can make a little bit of money on some permitting fees, but they can make a ton of money on sales tax revenue from these businesses being able to serve more customers.”
Between fall 2021 and fall 2022, the city will be focused on changing zoning text and rolling out rules, according to the Department of Transportation’s timeline. But while the guidelines may change through the process, the pandemic-induced outdoor dining revolution isn’t going anywhere. You can read more here.
From our perspective, outside dining has made our city that much better. We have enjoyed some many al fresco meals since Covid reared its ugly head and we hope it is here to stay. Enjoy the rest of your summer!!