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New York restaurant owner worries about a city "emptying out" after COVID-19

Small businesses worry about PPP money
Small businesses worry about PPP money 05:31

David Seixas, owner of Lupe's East L.A. Kitchen in Manhattan, has relied on a crowdfunding campaign and a Small Business Administration Paycheck Protection Program loan to reopen his restaurant for takeout and delivery after shutting down due to the coronavirus. While that will allow him to at least pay rent for the next two months, the popular eatery's longer term future — like so many restaurants around the U.S. damaged by the pandemic — is uncertain. He spoke with CBS MoneyWatch about his efforts to keep his business going while New York City remains under lockdown. This interview has been edited for length and clarity.

New York restaurant owner David Seixas said the federal Paycheck Protection Program loan he received will help cover his expenses, but only for the next two months. "Places that were functioning on the sheer numbers of people in the streets ... I don't know if they are going to survive," he said. Megan Cerullo/ CBS News

You temporarily closed your doors when restaurants were forced to close to dine-in customers. When did Lupe's East L.A. Kitchen reopen, and did you receive any federal assistance?

David Seixas: We reopened last Monday. It took us a while to get our PPP loan, but we finally got it [the week of May 11] after we applied for the loan in the first week that they offered it. It took a long time — seven weeks — and during that period we were closed because we didn't have any money. I don't want to disclose what the amount of the loan was, but we got it through JPMorgan Chase and it is the equivalent of 2.5 times our average monthly payroll, like the [Coronavirus Aid, Relief and Economic Security Act] says. 

How important was that federal loan in being able to pivot and start offering food to-go? 

We ran out of money quite quickly. But now, between that and the GoFundMe that we started, we can be open for the next couple of months at least. The GoFundMe was amazing. We got $30,000 from it, and that would have allowed me to open for three weeks or something. That's the level of money it takes to run a restaurant. But there is no business right now. 

Not even for takeout? Have many of your regular customers have come back?

Takeout is fine for now while everyone has their unemployment benefits and is getting money from the government, and there are some affluent people here. But after a while it's going to dry up. Who is going to order Mexican food? I don't know, unless I am wrong. But I am guessing that it could be problematic. Obviously the density of the city is going way down and that's another issue. 

Elaborate on that — you're worried about patrons and potential customers leaving the city for good?

Anyone who had high rent and lost their job and is younger is going home to their parents. I don't know the figures, but this building is emptying out. A lot of it was occupied by young professionals. Those apartments are expensive, not to mention small.

We are fairly fortunate in that we have been here for more than 20 years and have a very loyal following. But lots of other places that were functioning on the sheer numbers of people in the streets — those kinds of restaurants, with the number of people in the workforce dwindling and lunch business being down because people aren't going to their office, I don't know if they are going to survive.

Right. And how about yourself — what's your plan after your small business loan runs out?

It's complicated. The loan helps me for two months. But it's not going to help me stay in business forever, and it's basically for the employees. But it is helping for now. A lot of things have come through that are helpful. The main issue is going to be the rent. We have a high rent, and I wasn't able to renegotiate my lease with my landlord. I am liable for the next four years of rent for $1 million or something — but luckily, at least temporarily, I can pay. But rent is a big stumbling block.

What other expenses do you face?

My landlord knows I have the PPP loan and that I can use 25% of it on rent, so he knows he's getting the next two months rent from me. That's fine as long as I have the PPP, but we won't be able to make that rent in this climate afterwards. Things like payroll and all that, it's adjustable. But this high rent isn't, and we are not even using all the space. The PPP is going to let me stay open for now, but past that I have no idea. I have no clue!

What have you been able to do to make up for the loss of dine-in customers?

We are on the delivery apps, but we are trying to minimize that if we can. We have done a lot of business through Seamless and GrubHub, but they took a lot of money from us, too, through their commissions. Obviously, I don't want people to order from GrubHub — I'd rather they come from my website. I would say, overall, it must help in some way, but it's not optimal. 

How are your workers faring? You're using the PPP to pay them — are you close to getting back to pre-pandemic employment levels?

[Pre-pandemic] we had 29 to 30 full and part-time workers. Right now, I can't have that number of people in the restaurant. It's already crowded just with the employees we do have on. We are a little place, and if I had everyone working here, what can these people do? It's better they stay home and get their unemployment.

Makes sense. How do your workers who are coming in feel about working in an environment where they could be exposed to the virus?

A lot of people don't want to come back because they are still worried, and plus because of the differential with the $600 additional unemployment benefit they're getting, they are going to make more than they were making just to stay home. I have no need to push them to come back, so the people who want to work are working and the rest are staying home.

I asked everyone if they wanted to go back on payroll. I understand why you wouldn't want to get on the subway. The subway is a dangerous place now, and for less money than you'd get on unemployment. Some people feel invincible, and some people do not.

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