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Long Island Association

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PJ Lobster House is just one of several local businesses whose owners say inspectors have repeatedly shown up to the restaurant around dinner time in a small, two-week period. Photo by Kyle Barr

Local restaurant owners have reached out to regional officials saying the New York State Liquor Authority inspections meant to determine if they’re complying with state mandates have become more than excessive, but actually damaging to their businesses.

‘I think they were making some restaurants sort of the poster children for: if you don’t comply, you face some significant penalties.’

—Kevin Law

A letter dated Aug. 24 saying just that was signed by Port Jefferson Village, Port Jeff chamber of commerce and BID leaders and sent to Kevin Law, president of the Long Island Association. It was also copied to County Executive Steve Bellone (D) and Cara Longworth, regional director of Empire State Development. Letter writers argued that the SLA inspections have put too much onus on restaurants when they’re barely struggling to get by.

“Please realize we totally agree that inspections need to take place and strive to have our

business owners here operate in full compliance,” the letter reads. “However, we are concerned that overemphasis is being put on our restaurants — rather than the bars that remain open after the kitchens are closed and continue to serve alcohol until 4 a.m.”

The letter further states that restaurant owners have seen groups of four come in at a time, usually around dinnertime, sometimes not showing ID, with one armed with a pistol and wearing a bulletproof vest.

James Luciano, the owner of PJ Lobster House, said he has personally seen SLA inspections come through five times within a 14-day period at about 7 p.m. each time. The agents, though courteous, informed him that they were not from the SLA but from a New York State Police task force. A group of men, one armed, strolling into an eating area when people are sitting down for dinner does not make a good impression on diners, he argued.

“I am not certain that is the perception that we want the general public to see,” Luciano said. “I stressed to them that this was borderline harassment.”

PJ Lobster House is not the only local bar or restaurant that’s experienced a heavy hand with inspections. One Junior’s Spycoast employee related seeing a massive number of inspections in just two weeks. Danfords Hotel & Marina has been previously cited for SLA violations July 4 as well, according to state documents.

Though he said he has not heard from the inspectors since just before the letter was sent, he and other business owners have experienced the stress of constant inspections.

New York State has, according to the latest numbers as of Aug. 28, suspended the liquor licenses for 168 businesses for not complying with COVID regulations, though the vast majority were businesses centered in the five New York City boroughs. Later, Gov. Andrew Cuomo (D) announced Sept. 7 that seven bars and restaurants in New York state had their licenses revoked. Five of those were from Suffolk County.

The number of inspections, however, has yet to slow down. The governor’s office announced SLA and New York State Police task force members visited 1,064 establishments just on Sept. 6. Per the governor’s near-daily reports, inspectors conduct at least several hundred inspections daily.

In order to carry out reopening and COVID guidelines enforcement, New York has been broken up into regional economic development councils. The local task force, or “control room” contains members of the LIA, Bellone, Nassau County Executive Laura Curran (D), among others. It is captained by Longworth.

It’s a balancing act, trying to keep businesses healthy while avoiding a resurgence of the virus that would surely shut these businesses down for good. LIA’s Law said he received Port Jeff Village’s letter and has brought it up to members of the control room, whom he said were entirely sympathetic to the issues restaurants were having. Law, who has been at the forefront of Long Island’s reopening plan from the start, said hearing that armed and armored individuals have helped conduct inspections concerned everyone sitting at their daily video control center meetings.

“It’s impossible for them to inspect every restaurant and bar, because there’s just so many of them, so I think they were making some restaurants sort of the poster children for: if you don’t comply, you face some significant penalties,” Law said. “I think it was important that word did get out there so some businesses would comply. We all know with every type of category with every business, you have good guys and you have a couple knuckleheads who don’t obey by the rules and they ruin it for others.”

He said he and others did appreciate the village officials’ idea of focusing more on inspections of bars open in the early morning hours instead of weekday dinner time.

Though at the same time, Law said he and the local control room are only really in advisory positions, and it would require change on the state level to truly impact the rate of current inspections.

Either way, restaurants still remain in a tough spot, and Luciano said he and so many others continue to struggle.

“Our landlords and vendors don’t take IOUs,” the PJ Lobster House owner said. “We’ve done everything that has been asked. The numbers are way lower than they were. It’s been over six months. We can’t hang on that much longer, we are on a sinking ship.”

U.S. Sen. Chuck Schumer said there is need to increase the PPP loan funding, but he and Republicans have disagreed how. File photo by Kevin Redding

The federal Small Business Administration announced the government’s Payment Protection Program, which initially put up $349 billion in funds for small businesses across the country, has run out of funding in just eight days since it came online.

Thousands of loans are still being processed, and both government and small business owners are calling for more funds to be added to the bill, which was meant to stimulate small businesses and help keep more from filing for unemployment.

Around 41,000 loans have been approved for New York State out of 1.7 million. However, many businesses were left short of approval or didn’t manage to file in time. Others, who filed early as possible, found their early attempts confused with both misinformation and lack of clarity from banks and federal agencies.

Bernie Ryba, the regional director of the Stony Brook Small Business Development Center , said during a live stream with the Rocky Point Sound Beach Chamber of Commerce April 16 there are growing signs of the economy deteriorating “faster than anticipated,” and the $2.2 trillion CARES Act, passed at the end of March, may not be enough.

He added banks have already been ordered to not accept any more applications.

“It demonstrates the extent of the damage small businesses have experienced over the past three weeks,” he said. 

Ryba said the SBA was not staffed to handle the number of applications. From acceptance of application to approval was going to be 30 days, but he said that number has gone out the window due to the incredible number of applications.

Some have also criticized who have been able to apply for loans, and how quickly they received it. Politico reported that a number of large chain restaurants ate up millions of dollars in loans meant for small businesses. Such chains as the companies behind Potbelly Sandwich Shop and Ruth’s Chris Steak House, each received $20 million and $10 million in loans respectively. While the loans were meant for companies with 500 or less employees, this rule was expanded to allow companies to apply as long as they didn’t have more than 500 employees in a single location.

While both Republicans and Democrats agree more funds need to be added, the parties are bickering back and forth about how much. The GOP has proposed an additional $250 billion to the PPP program, but Dems stymied that, arguing the bill, which U.S. Sen. Chuck Schumer (D) called CARE 3.5, should also include $100 billion for hospitals, $150 billion for state and local governments and a boost to food assistance. Republicans have blocked that effort in return.

Schumer, the senate minority leader, said in a live streamed conference with Long Island Association President and CEO Kevin Law April 17 that there could be two additional COVID-related bills in the near future.

Meanwhile, Ryba said his small business center, which also has offices in SUNY Farmingdale, will be receiving around $1.1 million in federal assistance so they can hire additional staff in order to handle a larger number of business owners looking for advice.

Law said the thing of biggest importance isn’t the long term of the whole U.S. economy, but making sure that these small businesses and average people have money in their pockets to deal with the short term. He also questioned whether the government may allow some different types of nonprofits to apply for aid through PPP, as currently only 501c3’s are applicable. Schumer said they would look into allowing 501c6’s and others to also apply for any further aid in the future.

Schumer agreed, saying the government’s focus should be twofold, adding the government needs to approve the PPP extension “so their money gets out there faster, it is job number one. Testing — if we don’t get it done we’re not going to recover. Those are the two biggest things.”

More from Schumer and Law’s Conversation

People are facing multiple hurdles during the ongoing coronavirus crisis, but Law said those people need help from the federal government.

With people’s $1,200 checks for people making under $75,000 a year finally going out, Schumer said that should not be the end of such funds to everyday Americans. He added he thought the wage limit should be raised to people making around $99,000 a year.

“If you have a wife who is a hospital worker, you’re making more than [the $75K] but you still need help,” he said.

In terms of mortgages, Law said while there was something being done for those with federally backed mortgages, he asked if there was anything being done for those with more locally or commercially backed mortgages.

“We need some kind of commercial forbearance for both commercial and tenants,” Schumer said. “I pushed for this in CARE 3.” (The bill called the CARES Act passed March 30.)

The LIRR is currently asking for an additional bailout, with ridership now down by 97 percent, but services are continuing for essential workers, especially those working in health care. Schumer said he wants to provide more assistance to both the LIRR and to the Suffolk and Nassau bus systems.

For other municipalities, he said bills he called CARE 4 and 5, the first of which he expected to come up in the first few weeks of May, will also include more money for townships who have also experienced revenue shortfalls from the coronavirus.

Law also suggested the federal government look into creating some kind of public works program in the vein of President Franklin Roosevelt’s post-Great Depression programs in the 1930s and 40s, specifically for public and infrastructure works such as roads, bridges and sewers. Schumer agreed with the idea for when things finally start to open up.

“We’re going to have to stimulate the economy, and the best way to do that is through infrastructure,” the senator said.

 

Suffolk County Legislator William "Doc" Spencer. File photo

Government officials and community organizations alike are concerned with possible tax reforms they say could cost Long Island residents millions.

While President Donald Trump (R) has not released any formal proposal yet for tax reform, organizations like the Long Island Association, a nonprofit group focused on business and civic affairs, are reacting to both Trump’s and his administration’s rhetoric during and since the 2016 election.

The LIA sent Trump a letter in December outlining some of their fears with possible tax reform in the coming year, specifically the possibility of eliminating deductions for real property taxes, mortgage interest, state income tax and reducing charitable donation deductions.

“We are concerned about some of the comments your Secretary of Treasury nominee Steven Mnuchin made about limiting the ability to deduct mortgage interest and property taxes on federal tax returns,” the letter from the organization said. “Speaker Paul Ryan has also expressed support for scaling back or eliminating the deduction for state and local income and property taxes.”

Matt Cohen, vice president of government affairs and communications for the LIA, said eliminating deductions could be a “disaster,” for Long Island. He referenced various news articles including one in The Hill, which reported the administration is taking a “serious look,” at capping deductions including ones for charitable donations.

“If these proposals are given more structure and momentum it would be devastating for Long Island.”
—Matt Cohen.

“If these proposals are given more structure and momentum it would be devastating for Long Island,” he said in a phone interview.

The LIA Research Institute did a study on the effects eliminating the deductions might have and said it could cost Long Islander’s $4.4 billion. In a 2013 report, they found Long Island sends the federal government $23.1 billion more than it receives back in programs and services from the government, so taxpayers in all brackets would be impacted by these cuts to deductions. The study said the middle class would be hit especially hard with tax increases, anywhere from $1,000 to $4,000 annually, and $3 billion would be taken away from the regional economy.

“No matter who you are, if you’re deducting mortgage interest on your returns you’re going to get hurt by this,” Cohen said. “In an area with high costs and high taxes, this could even drag down the real estate market.”

Cohen is not the only one who is concerned.

Suffolk County legislators and Executive Steve Bellone (D) echoed the sentiments.

“For Suffolk County residents, who already pay a steep price in property taxes, this type of tax reform will be a blow to homeowners and will have a negative ripple effect on our economy as a whole,” Legislator William “Doc” Spencer (D-Centerport) said at an event earlier this month. “With potential increases as high as $4,000, this reform will cut off many Suffolk County residents from the American dream by discouraging home ownership, and will cripple current homeowners’ ability to make ends meet.”

Legislator Steve Stern (D-Dix Hills) stressed the importance of residents understanding this debate as it reaches the national stage.

“Whether you are a local business owner or a middle class Suffolk County resident looking forward to a reduction in your taxes as it was promised along the campaign trail, it’s important for all of us to understand what the impact to each of us will actually be if you have a proposal such as this one that would be implemented,” he said.

Bellone said the elimination of these deductions is not welcome to Suffolk County.

“Any attempt by Washington to eviscerate these critical financial incentives under the guise of tax reform is a nonstarter and should be dead on arrival,” he said.  “Instead of making it more costly to own a home on Long Island, the federal government should do more to lower taxes for hardworking homeowners and not the other way around.”

Elected officials were not the only voices speaking up.

Robert J. Ansell, board member of the Huntington Township Chamber of Commerce also spoke at the April 5 press event.

“Two-thirds of the country’s gross domestic product is consumer spending,” Ansell said. “The elimination of the mortgage interest, state income tax, and real property tax deductions not only puts a significant damper on incentivizing home ownership, but will also mean that families will have less disposable income to spend in their communities on local businesses.”

Cohen said it’s important to get out early with this issue, even though no formal or concrete decisions have been made yet.

“It’s a new administration, a new theme with new policies — we just want to get out ahead of this and show where we stand,” he said