As COVID-19 spreads, Manhattan’s Chinatown contemplates a bleak future
Starting tomorrow, all of New York City’s restaurants, bars and cafes will be restricted to selling food through take-out or delivery only in an attempt to contain COVID-19. While most of the city’s small businesses are now grappling with the new economic reality, most Chinatown enterprises in Manhattan have been suffering, some more drastic than others, since late January. That’s already two months of reduced business, with some restaurants and stores reporting an 85% drop in sales.
Legacy restaurants in the touristy area around Mott and Canal Streets, like Jing Fong and Hop Kee that have been in operation since the 1960s and ’70s, have temporarily shut their doors to try to help curb the spread of COVID-19 through social distancing, as have newer establishments like Grand Shanghai House. A slew of other temporary closures are expected to follow this week.
“I’m closing for two weeks,” said Hop Kee’s owner Peter Lee on Sunday, before New York City Mayor Bill De Blasio even announced the take-out only restrictions, “then we’ll see.” Lee, like most business owners, said that drastic measures need to be taken to contain COVID-19, but it will be economically catastrophic. Especially for businesses in Chinatown, which have been impacted by reduced business due to fears before the first case of COVID-19 was even confirmed in the city on March 1.
The day before Hop Kee temporarily shut its doors, veteran servers in light blue jackets who would normally be zipping around carrying plates of food to a Sunday afternoon lunch crowd that typically packs Hop Kee to its 168-seat limit, stood around with nothing to do. Many Chinatown businesses will simply not be able to pay their rents.
“The last thing a landlord wants,” said Jan Lee (no relation to Peter Lee) who owns the building where Hop Kee operates and is a neighborhood activist, “is to remove the tenant who is existing in the property — the last thing.” The building has been in Lee’s family since 1924, the two families have been linked for three generations.
Chinatown’s small businesses often have thin but manageable profit margins, however when catastrophic events such as the 9/11 terrorist attacks, Hurricane Sandy in 2012 and now the COVID-19 pandemic, there are no safety nets for owners, sole proprietors and scores of hourly workers.
“I’m doing it day by day,” said Mei Chau, the chef and owner of Aux Epices, a cozy Malaysian/French bistro on Baxter Street just north of Canal Street. Chau‘s business declined 35% in February and recently plummeted by 85%. “I’m weighing my options,” she said with a stunned look as she assessed whether to remain open or temporarily shut down, which was not even a consideration several days prior.
Di Palo’s Fine Foods on Mott Street on the edge of Chinatown, is down 20% compared to a year ago, according to Lou Di Palo who runs the store with his two siblings. The Di Palo’s are absorbing the reduced revenue for the time being. “But if it continues and it gets worse,” said Di Palo, “then we’re all going to have to suffer the pain and that includes my employees.” As a last resort he’ll cut back his employees’ overtime hours he conceded, sounding pained, “Overtime hours really makes a difference in their paycheck.”
“You gotta remember,” said Di Palo, “if I can’t pay my fixed expenses, they won’t have a job.”
Chinatown is unique as it’s one of one of the only downtown neighborhoods in New York City that remains packed with individually owned small enterprises, from thriving mom and pop restaurants and tiny coffee shops, to plant stores and vegetable markets. There might be a bubble tea chain here and there, but Main Street is thriving in Chinatown. At least it was before COVID-19 hit the city.
Businesses that solely rely on Chinatown tourism are scrambling. “No foreigners come, no tourists come—nobody comes here,” said Mohammad K-Alam recently, standing in his fluorescent-lit souvenir shop on Mott Street. The shelves and displays were stuffed with standard issue “I heart NY” sweatshirts, mugs and shot glasses.
K-Alam, originally from Bangladesh, has a monthly rent of $8,255, plus utilities and workers’ salaries. He must earn a minimum of $500 a day to survive, which he’s typically surpassed in previous years. Early this month K-Alam thought he was facing a disaster by selling a mere $100 – $150 worth of merchandise a day due to reduced tourists, now he is barely making $20 a day and is visibly shaken as he contemplates how he’ll support his family in the Bronx.
Chinatown food tours were still taking place over the weekend, but many are temporarily stopping. Alana Hoye Barnaba, owner of Ahoy New York Tours and Tasting, which specializes in eating at Chinatown and Little Italy establishments, has cancelled tours for two weeks.
Lori Pickhardt a tour guide and manager at Free Tours by Foot in New York City said they were already hurting in February and early March from reduced bookings, now they’ve cancelled all their Chinatown tours through April.
It’s early in the COVID-19 crises and no one knows how long it will last; Chinatown’s small businesses don’t know where to turn for financial help yet.
“I’m looking to apply for anything that’s out there,” said Peter Lee, who received financial help from the 9/11 Fund and FEMA, after the attacks, “Businesses don’t know what to do, there’s nothing we can look to yet.”
The New York City Small Business Services is offering emergency financial assistance for impacted businesses, zero interest loans up to $75,000 for businesses that have lost more than 25% of sales and grants to cover 40% of payroll for two months.
“We need to start looking at grants,” said Jan Lee, noting that many Chinatown small businesses are already paying off loans so even zero interest loans are not ideal.
Peter Lee thinks sales tax for this quarter due March 28 should be waived altogether, “I have just enough to pay,” said Lee shaking his head, “I pretty much have no option but to close.”
Lou Di Palo thinks if the government needs to step in and protect small businesses, a start would be to hold insurance companies accountable that try to find loopholes and excuses to weasel out of paying legitimate claims. He was less than impressed with the response to the aftermath of Hurricane Sandy and throws around around descriptors like “disgusting shame” and “didn’t stand by the small people.”
Desperate small business owners like Mohammad K-Alam are looking for any financial help they can find, not knowing how they are going to pay next month’s rent.
“City government or other honorable person,” K-Alam implored, “please help us.”
COVID-19 Economy FAQs
What are the details of President Joe Biden’s coronavirus relief plan?
The $1.9 trillion plan would aim to speed up the vaccine rollout and provide financial help to individuals, states and local governments and businesses. Called the “American Rescue Plan,” the legislative proposal would meet Biden’s goal of administering 100 million vaccines by the 100th day of his administration, while advancing his objective of reopening most schools by the spring. It would also include $1,400 checks for most Americans. Get the rest of the specifics here.
What kind of help can small businesses get right now?
A new round of Paycheck Protection Program loans recently became available for pandemic-ravaged businesses. These loans don’t have to be paid back if rules are met. Right now, loans are open for first-time applicants. And the application has to go through community banking organizations — no big banks, for now, at least. This rollout is designed to help business owners who couldn’t get a PPP loan before.
What does the hiring situation in the U.S. look like as we enter the new year?
New data on job openings and postings provide a glimpse of what to expect in the job market in the coming weeks and months. This time of year typically sees a spike in hiring and job-search activity, says Jill Chapman with Insperity, a recruiting services firm. But that kind of optimistic planning for the future isn’t really the vibe these days. Job postings have been lagging on the job search site Indeed. Listings were down about 11% in December compared to a year earlier.
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