Brian Lehrer: Brian Lehrer on WNYC. Now that we've spent our first 45 minutes talking about the fate of the whole world, or so it seems, let's talk about the fate of restaurants and other businesses in New York City under Mayor Mamdani. It's no secret that many New York City small businesses are struggling. Owners are dealing with rising costs of commercial rent, insurance, inventory, plus the bureaucratic maze of applications, permits, licenses, inspections, fees. The list goes on.

Last week the new mayor took a first step towards easing the burden on New York City small businesses as he sees them with an executive order aimed at cutting excess fines and fees. And let's talk about that with Andrew Rigie, executive director of the New York City Hospitality Alliance. Generally, he represents the restaurant industry, but also businesses beyond that. Andrew, welcome back to WNYC.

Andrew Rigie: Hey Brian, thanks for having me on.

Brian Lehrer: You want to just set that context for our listeners? The New York City Hospitality Alliance represents.

Andrew Rigie: We represent thousands of restaurants, bars and nightclubs across the five boroughs from your small neighborhood cafe, your diner, to four-star restaurants and everything in between, as well as pubs and nightclubs. So much of the not only economic impact of the city, but also that social and creative sector as well.

Brian Lehrer: Can I ask you how Mayor Adams did with respect to the interests of your members? He certainly touted himself as a small business guy.

Andrew Rigie: Absolutely. Mayor Adams did a lot of good work for the city's restaurant and nightlife industry, supporting small businesses, reducing fines. The reality is, though, under Mayor Mamdani, there's still a lot more work to be done. Our past mayor did a great job. Obviously, you could always do more, especially from the small business perspective, but it was nice that he was out there talking about and championing small businesses because it's, yes, the reforms, but also being a cheerleader for the city and our small business community.

Brian Lehrer: Give me one reform that should go down in history as an Eric Adams positive with respect to the hospitality industry or small businesses generally.

Andrew Rigie: Well, on nightlife, after we repeal the historically racist cabaret law as part of City of Yes, a lot of the focus has been on housing, but it also eliminated a lot of the anti-dancing restrictions which were found in the zoning code. That was something that is really helpful and will be helpful to ensure people can dance and express themselves in New York City.

Brian Lehrer: Before we talk about what Mayor Mamdani has already done and things that he may be promising, why don't you lay out for our listeners what your main agenda items for him are as he comes into office, from your organization's perspective?

Andrew Rigie: Number one, really establishing a relationship with the city's restaurant and nightlife community and making sure that they are at the policy table, talking about the permitting, licensing issues that they struggle with, with the fines, and really being a voice for the small business community. There's a long menu of policy ideas to not only reduce regulatory burdens, which we'll discuss, but also enact policies that uplift these small businesses, uplift the workers, to make sure that New York City is a small business-friendly city. For far too long, small businesses have felt like they're the city's personal atm where they are over-regulated.

I think he has good opportunity right now working with the small business community to make that happen. It's going to take a lot of work and a real focus and dedication to regulatory reform because it doesn't just happen easily.

Brian Lehrer: Let's talk about this executive order from Mayor Mamdani. I see it begins a multi-agency effort, the Department of Buildings, the Department of Consumer and Worker Protection, Environmental Protection, Fire Department, Health Department, Sanitation. Give us your understanding of the executive order and what it actually does do and your reaction to it.

Andrew Rigie: Sure. Well, it's a very good thing. It's something that has actually occurred under the Adams administration, the De Blasio administration, and happened at the end of the Bloomberg administration, after fines and fees on small businesses had skyrocketed. What this executive order does, it is an analysis of all the fees for licenses, for permits, all the penalties for various violations and the city's going to have to index them and then come back to the mayor and say, "Here are all the fines and fees that we recommend should be eliminated, reduced or modified perhaps to allow a warning or a cure period before a monetary penalty is levied." That's the good news.

One thing that is different and it's important to point out in Mayor Mamdani's executive order is the indexing, creating a long list of all these fines and fees that small businesses are subject to, and not just rely on the agencies who, in reality, have a vested interest in collecting a lot of those fines and fees to make recommendations. They can make their recommendations for reductions, but we will now have a long list to be able to say, "Hey, why shouldn't that be reduced? Why shouldn't that be eliminated?" That's new, unique, and a really important feature of this executive order.

Brian Lehrer: Listeners, if you own or run or even work at a restaurant or anything else that you could consider in the hospitality industry, or even other small businesses, we welcome your calls for Andrew Rigie, who represents you as executive director of the New York City Hospitality Alliance. How are things at your business, and how do things that your business reflect the state of small business or restaurant business in general, restaurant business in particular, or small business in general? 212-433-WNYC with a story or a comment or a question, or a plea. 212-433-9692. Our phones are open for you or anyone else with a question for Andrew Rigie, executive director of the New York City Hospitality Alliance.

How are things with respect to small businesses? We could look at the last five, six years as a frame with what the pandemic did in particular and how much recovery there's been from that, but also the ongoing transition to shopping so much online rather than in storefronts. That might not affect restaurants so much. How would you give us the big picture of what's going on with the kinds of businesses you represent?

Andrew Rigie: There's really two different tales. There's the hundred or so restaurants that are always busy, New Yorkers, visitors can't get a reservation there. If you speak with those businesses, obviously, they're very happy to be busy, but they'll certainly list out a long list of challenges that they face. The problem is there's the 25,000 other small business restaurants, bars across the five boroughs that are really struggling.

You had mentioned at the top, commercial rents are up, insurance rates have skyrocketed. Labor costs are very high, particularly in a restaurant business that's very labor-intensive. You need a lot of workers unless you digitize and just put everything on a touchscreen. There are a lot of challenges. There's a lot of frustrations. A lot of small business owners do still feel like they're being micromanaged by government. The good news is that people want to go out, they want to eat, drink, dance, and celebrate.

Our economy is so food, beverage, and experience-focused now. I think that provides a lot of opportunities. Although it's very difficult to open up a new restaurant for the permitting, licensing, and all the expenses that go along with that, these are small business owners. They're entrepreneurs, people from around the globe, and this is their dream, and it's in their DNA. They're working to persevere. I think we have a great opportunity now with our new mayor, new speaker of the City Council, Julie Menon. She owned a cafe, which she lost after 9/11. She's done a lot of work to help uplift these small businesses as well.

I think it's going to be a balance and a focus on helping reduce regulatory burdens, which there are a lot of good programs offered through the New York City Department of Small Business Services. Making sure that all these business owners know about them is going to be critical, and like I said, just making sure that for both the mayor and the city council, small business issues is a pillar of their agenda.

Brian Lehrer: Here's a restaurant owner, Daniel, in Manhattan. You're on WNYC. Hi, Daniel. Thank you for calling in.

Daniel: Thank you. My last restaurant, prior to the one I own now, I lost because of the increase of rent, had doubled. I'm wondering why we don't have rent stabilization for restaurants and small businesses, number one. Number two, the fees that the city puts on are pretty crazy. I'm not sure if this gentleman realizes that when I get my state liquor license, I have to pay a $500 permit also to the city. They do nothing in regulating the state liquor authority. They don't issue my beer, wine, and liquor license, but yet, I got to pay that.

Also, the fire department came in and made me pay $225 for an open flame because we had an open candle of the candles on our tables. Pretty much the fire chief said, "If you don't pay it, I'll pull your business license," which would take out the entire business. This was just like two years ago. I had to go down to the fire department and pay this permit. What does he know about these things because that's what's really happening to us?

Andrew Rigie: Daniel. It's like music to my ears, but it's very frustrating, you raising all of those issues. On the second point, the liquor license fee, that's something that we're hoping is eliminated. We were actually successful, you may remember, for one or two years during the pandemic, we got the city to suspend collection of that fee. You're 100% correct. It makes no sense that the city is charging a tax on a state license. It's ridiculous and it doesn't occur anywhere else throughout the state of New York that I imagine. That's a great one for Mayor Mamdani to completely eliminate. Not just the temporary suspension we had a couple of years ago.

The open flame permit, again, another example. Why are you paying that as long as your business is meeting the proper fire safety rules and regulations? Why are you paying a fee just to do that? It's very nitpicking. You're already generating tons of tax revenue to fund the fire department and all the city's essential services. Your first point on rent, that's a bit more complicated. Rent control stabilization for commercial tenants is something that's been discussed for decades. There's a lot of questions about its constitutionality and some more questions about what happens to the upkeep of the general business or building under those types of scenarios.

There's also something the city could do when it comes to property tax. You probably pay, as many small business owners do, a portion of your landlord's property taxes that are passed through your business, and those have gone up, and they can be so costly as well. There could be tax credits or elimination of some of those taxes for small businesses. All three of your points, spot on. That's why we need voices like yours at the mayor's policy table.

Brian Lehrer: Let me come back to the executive order from the mayor. I see that it gives agencies 45 days, that's the city agencies, to create a comprehensive inventory of the regulations, fees, and civil penalties affecting small businesses. Then the agencies will decide what's necessary and what should be cut. Do you want to give your recommendations to the bureaucrats looking to cut the red tape beyond anything that you've already said? Which fees, which fines, which regulations do you want to see on the chopping block? Because I guess mostly what we have here is in the classic governmental tradition, a committee to look into it.

Andrew Rigie: Absolutely. Especially with the agencies, they can do some good recommendations, but you can't let the fox guard the henhouse. This is going to have to come out of city hall, and it's going to have to be a clear directive. Outdoor dining. We have this new outdoor dining program, and unfortunately, many of the associated costs with it have made it cost-prohibitive for too many small businesses, particularly in neighborhoods that never had outdoor dining before the pandemic. Were able to thrive with it during the pandemic and then lost it post-pandemic. That's an area to look in as well as streamlining that permitting and licensing process. There's fees associated with that.

The Health Department, the letter grade inspection system doesn't allow for true due process for small businesses. I think that this administration cares a lot about equity, a lot about due process, so it should be extended to our small businesses as well. If it was, that would further reduce the need for excessive inspections and reduce fines that are levied on local restaurants and do it in a way, by the way, that would still ensure high food safety standards and compliance among businesses.

Brian Lehrer: Arlie in Manhattan says he or she, I don't know, owns a small bar in Brooklyn. Hi, Arlie, you're on WNYC.

Arlie: Hi there. Yes, I'm Arlie. I own a bar called Honey's. We're out in Brooklyn. One of the biggest challenges that we've been facing, and it's been a challenge over the years, is just the rising insurance costs for liquor liability insurance. Just this past year, it basically doubled to a point that it's just really soul-crushing. Every year, we haven't had a single claim, but our insurance gets dropped, and we have to renew. We have to pay three months up front. It's just gotten to the point where it's almost untenable.

Andrew Rigie: This is one of the most common issues that we're hearing over and over, particularly from bars, nightlife venues, some restaurants as well. The skyrocketing insurance premiums, even when you don't have claims, the premiums have gone up. You've had different programs disappear from the market, and then you're scrambling, trying to get access to them.

Right now, at the state level, there are some discussions about potential insurance reforms. We've spoken with some lawmakers that there should be some sort of oversight hearing to investigate why exactly are the premiums going up. The other problem is mostly premiums are based on a business's sales. As the cost to run a small business continue to go up, even if you haven't had claims, your insurance premiums continue to go up, up and up. It's very frustrating. It's way too much of an expense. This is another example where government can help small businesses. They need to take action, and they need to move quickly, because unfortunately, there's even been articles about small businesses closing because of insurance and related expenses.

Brian Lehrer: Why is insurance going up so much? People feel it in their lives on various ways, car insurance is spiking last few years, homeowners' insurance. Some people say climate change has a lot to do with it on the property side, more risks from floods and etc. What about for the small businesses you represent?

Andrew Rigie: There are these macro issues. One of the things that we keep coming back to is liability. It is so litigious to own a small business in New York State and New York City and there must be tort reform. People always just say, "Oh, it's so difficult. That's never going to happen." The problem is minor violations of very technical laws result in these big lawsuits and small businesses can't afford litigation to defend it. If they're told, "Hey, we could fight this and maybe win, but it's going to cost you $500,000 or you can settle right now for $60,000," what do you think they do? They end up settling and their insurance company and the lawyers that are assigned, sometimes they do that because it's in the best interest.

There are things related to liquor liability, dram shop laws, that have been reformed elsewhere, where there are some caps on these fees. I think in Connecticut, they recently, or within the not-too-distant past, had some reform. We need to really reform laws in the state of New York to reduce the liability small business owners face, particularly in the restaurant and nightlife industry.

Brian Lehrer: A couple of specifics that I know you've been calling for. You suggest changes to the outdoor dining program in the city, allowing winter enclosures year-round, roadway cafes, reducing fees. A lot of New Yorkers were happy to see the outdoor dining sheds have to go down for the winter months. A lot of New Yorkers were not. You also called for repealing the New York City only liquor license surcharge and the commercial rent tax on storefront businesses. Take me through one of those. How about the winter outdoor dining structures, which are so controversial?

Andrew Rigie: I think one of the controversial parts of it was that when these roadway cafes went up in the beginning of the pandemic, there were ever-changing rules and regulations. People didn't know that they were going to be up for multiple years because the pandemic was going to continue on so they got worn down. There was a lack of enforcement, but then there was over-enforcement. Under new, higher standards that many of these new roadway cafes people have seen are under, hold up to the different elements throughout the winter.

What happened was so many small businesses with the roadway cafes, they just cannot afford to set them up in the spring and then only pay to have them broken down and then stored for multiple months during the winter and then pay to set them up again. That's why we've seen so many of them disappear. I think through building standards and other rules, you could ensure that a roadway cafe would be solid and sufficient and not create some of the same concerns people had during the height of the pandemic. That's just rules and regulations and enforcement and smart design.

Brian Lehrer: Regarding the letter grade system for restaurants, listener writes, "Please have them explain how the letter grade system hasn't allowed for due process." I'll hook that to a larger question, which is some listeners may hear a call for reducing regulations, especially on something with health implications and safety implications like restaurants, and think, "Yes, yes, there goes another business lobby looking to have the things that protect us as diners or other kinds of consumers rolled back. The government protects us in this respect, so stop being so nice to this business lobbyist."

Andrew Rigie: Listen, I'm not sure that the letter grade system is going anywhere, but not only is it bad for small businesses, I also think it's misleading to the public. A letter grade represents a snapshot in time, not actual conditions. If there's going to be letter grades, it should be A or F. A restaurant is either safe and sanitary enough to serve the public, or it is not, and they should be shut down until they are. Whether it's a B or a C, it's not actually representing the current conditions. You could see an A in the window, but it could be C conditions. You could see a C in the window, but it could be operating at A condition.

Brian Lehrer: If you just have a pass fail system, which is, I think, what you're saying, then in high school terms, it could be a 66 out of 100 and still pass.

Andrew Rigie: A 66 is still safe and sanitary enough to serve the public. I think you have to start looking into what the violations are that add up to the C. I think there are certain violations that would be more administrative, like or non-directly related to food safety, that could result in the B or C letter grade. Everyone wants high food safety. Nobody wants unsanitary restaurant opening and operating.

Just to put into perspective, when the letter grade system was first implemented, I think back 2011, 2012, or maybe it was a little before that, the city health department brought in about $12 million a year in health department fines. There was no big food safety issue in the city of New York. Restaurants were still safe and sanitary. After the letter grade system was implemented for some time, it skyrocketed from $12 million a year in fines to over $50 million a year in fines. There was certainly not an equivalent reduction in food safety issues. It was a way for the city of New York to generate fines on the backs of small business owners.

Our position has been if something does not pose an immediate hazard to workers or the public, it should allow for a warning or a cure period for that small business before the city levies a fine. Listen, other cities around the globe, they don't have letter grade systems and they have high food safety standards. I think we just need to look at it in context, fairness and also not to mislead the public into thinking one thing or another.

Brian Lehrer: I'm seeing some instant reactions to your 66% food safety is okay. Might have made news that you didn't want to make on that one. Are you standing by it?

Andrew Rigie: What I'm saying is that food safety, that a restaurant is either safe and sanitary enough to serve the public or it's not. Mind you, it takes the way the system works without getting too overly technical, it's not based on 100 points. There are actually thousands of points if you were to add them all up. If you were to convert it into a fraction or a percentage, a restaurant could-- It just doesn't work the same way because if you add up all the points, it's not 100%, it's 100 points, it's 1,000 plus points. It's not the best equation, but yes, if a restaurant's not safe, you shut it down. If it's safe and sanitary, obviously, you let them operate.

Brian Lehrer: I know you got to go. Last thing you wrote that Mayor Mamdani should ensure hospitality has, "a permanent seat at his table." Real quick, what would that look like?

Andrew Rigie: That means that he, his deputy mayor, small business services are constantly engaging with small business owners to know what's going on in their business, what's working for them, what's not working for them, and enacts policies to support them. Both when he agrees with them and even if he disagrees with them, they should be heard, and their issues should be considered.

Brian Lehrer: Andrew Rigie, executive director of the New York City Hospitality Alliance. Thanks so much for joining us. Great to have you on the show again.

Andrew Rigie: Thanks, Brian.

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