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6 months after COVID-19 blitzed New York, weary restaurant owner still "barely staying afloat"

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Indoor dining delays could be final straw for many restaurants 05:05

Ed McFarland, owner of Ed's Lobster Bar in Manhattan, was one of the thousands of small business owners around the U.S. to take out a Paycheck Protection Program loan this spring. Now he regrets the move, saying he's still "barely staying afloat." CBS MoneyWatch caught up with McFarland to discuss his experience with the program, as well as how he's faring while restaurants in New York City remain restricted due to COVID-19. This interview has been edited for length and clarity. 

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Ed McFarland, owner of Ed's Lobster Bar in Manhattan's Soho neighborhood, said he is ready to open at full capacity indoors. But the city has other plans.  Ed McFarland

CBS MoneyWatch: When we spoke in April, COVID-19 was rampant in New York City and you were only open for takeout. Since then, you've been able to open for outdoor dining. Has that boosted Ed's Lobster Bar?

In mid-May, business was getting good when the weather started to get nice and it was basically all takeout orders. Outdoor dining is not all it's cracked up to be. The way it's set up, maybe for others with bigger footprints it works, but my space is very small. It's squished between two other places. My sales actually dropped off when outdoor dining started — they did not increase.

When outdoor seating started, business dropped by about 8% to 10%. Part of it was because people started going out more and more places opened. Also, I don't have the ability to seat more people. Indoors we have 52 seats, outside I have 14. 

What did the process of getting up and running outdoors entail? Was it expensive?

Getting the outdoor situation set up was a hugely burdensome process. The state had the Department of Transportation inspecting us every week. They kept changing the rules and made it difficult to be in compliance. We were inspected five or six times, and every time it was for something different.

It started with the barriers — first you were allowed to put out planters, then you weren't, then the barriers had to be a certain width, then they had to be locked together. It was just one thing after another, and I ultimately spent about $10,000 on barriers and setting up the outside area. 

Have I made that back in profit? Absolutely not. We are barely staying afloat right now. 

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Ed McFarland said he spent about $10,000 setting up outdoor seating in front of his restaurant in Manhattan's Soho neighborhood. Ed McFarland

You'll be allowed to open for indoor dining starting next week. Are you encouraged?

I do plan to open indoors, but we are only allowed to open at 25% capacity, and that is not enough. I need the same amount of staff to accommodate 25% as I do 50%. I have a restaurant on Long Island, too, where we've been open at 50% capacity since July. But no one has a plan to go to 75% or 100% anywhere. 

Do you think it would be safe to open at 100% capacity given the continued threat from COVID-19? Some states around the U.S. are seeing a spike in cases.

I've been on a plane with 200 people as recently as a couple months ago, and I don't understand why you can go on a plane but you can't have 50 people inside a restaurant for one-and-a-half hours. It doesn't make any sense.

We should be allowed to open up and let the people decide if they want to go out and eat. I think it's safe to reopen. I am happy to follow safety measures –– I have partitions, our staff wears masks in the kitchen and our waitstaff wears masks. At some point you have to say it's up to the individuals to decide what they want to do.

You got a Paycheck Protection Program loan to help prop up Ed's Lobster Bar. But it sounds like the funding has been a mixed blessing at best.

We used the loan to bring staff back with the promise that the restaurant was going to reopen at some point in the middle of the summer. But that's not what happened.  

I was able to bring some staff back, but a lot of staff did not want to come back. With the additional unemployment, people didn't want to come back, and a lot of them made excuses like they were afraid it's not safe, they were afraid of getting sick — but in reality everyone knew it was slower, and they were going to make more on unemployment. 

So would you rather not have taken on the loan?

I took a PPP loan and am hoping the whole thing will be forgiven. I used it solely for payroll. But if I would have had any inclination that it would be this long before we could reopen [for indoor dining], I would have closed and waited to reopen. I would have held the money and spent it when we could reopen. 

It doesn't make sense they doled all this money out to people who had no ability to spend it in a proper way. And even if you did spend it in the proper way, you were doing such little business you wasted it. It didn't help me at all. 

Are you concerned about a second coronavirus hitting New York City and shutting you down again?

If they did another shutdown, even if I could survive, I wouldn't even waste my time — I would just close. We are going on six months before anybody is sitting inside a restaurant, and the only thing that is going to cure this is putting butts in seats — not another loan we can't pay back, not a bailout. I just want to be allowed to reopen.

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