New York City indoor dining reopening restrictions leave some restaurants wondering, is it worth it?

Joanna Fantozzi

Following weeks of growing pressure from restaurant owners, New York City Gov. Andrew Cuomo announced on Sept. 9 that restaurants would reopen indoor dining at 25% capacity on Sept. 30. But in addition to capacity limitations and table distancing restrictions of six feet, New York City restaurants have to follow a list of guidelines including mandatory temperature checks, contact tracing no bar service, and filtration upgrades that the city will enforce with 400 additional inspectors to oversee compliance. If all goes well, the city will upgrade capacity restrictions to 50% on Nov. 1.

But with a new list of restrictions on top of COVID-19-related struggles that most restaurants are still sorting through, is indoor dining worth the investment for New York City dining establishments? Many restaurants are struggling to figure out how to make these restrictions work for their companies, like Shake Shack, which is planning to open their New York City locations for indoor dining on Sept. 30, despite the challenges of taking the temperature and contact information of every customer that walks in.

"That kind of makes sense if you are Gramercy Tavern and you take a reservation,” Shake Shack CEO Randy Garutti said, referring to the New York restaurant owned by Danny Meyer’s Union Square Hospitality. “That makes less sense when you are a fast-casual restaurant like ours who will have hundreds of people a day coming through.”

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New York City-based casual-dining burger chain Bareburger is unsure how to make these new restrictions work for their restaurants. It’s not worth it to reopen their smaller restaurants with only 40-50 seats, Bareburger CEO Euripedes Pelekanos said. It’s more prudent, he said, to wait and see until dining capacity goes up to 50%.

As for the indoor dining restrictions themselves, Pelekanos is less concerned about their feasibility and more worried about customer reactions.

“We are curious to see if patrons will find it intrusive for temperatures and contact tracing information recorded, and ultimately if they feel safe dining in,” he said.

According to the New York City guidance on reopening indoor dining, employees and customers can only be admitted to the restaurant if they have their temperature taken and it is no greater than 100 degrees. Although many establishments already have this restriction in place, the contact tracing requirement is fairly new for American restaurants. According to the guidelines at least one party from each party has to give their full name, address, and phone number “for use in contact tracing efforts.”

Although operators like Bareburger might be concerned with how customers will react to this mandatory collection of data, countries like China have been using contact tracing throughout COVID-19 recovery efforts.

By April, Yardbird Hong Kong and Black Sheep (with 25 restaurants in Hong Kong and Shanghai) had started making diners sign contracts upon entering their restaurants, promising they did not have coronavirus  and giving their contact information in case there’s an outbreak.

Besides customer privacy concerns, the other challenge restaurant operators foresee is how strictly these restrictions will be enforced.

“There is an unspoken concern that the restaurants will be targeted with hefty fines for small infractions,” Pelekanos said. “We have all heard about restaurants recklessly breaking the rules and justifiably paying the price, but we’ve also heard about restaurants receiving hefty fines for something as trivial as not having a lid on an alcoholic beverage.”

For many New York City operators, deciding whether or not to open their restaurants for indoor dining will come down to the perceived return on investment. Between the cost of implementing these restrictions and possible hefty fines issued by inspectors, reopening at 25% capacity just might not be worth it. For Junzi Kitchen, as a takeout and delivery-heavy concept

Deciding whether or not to open their restaurants for indoor dining comes down to, for most operators, figuring out the return on investment for sinking more money into COVID-19-ready dining. For takeout and delivery-heavy restaurants, the 25% capacity may not be worth it. New York City-based fast-casual Chinese chain, Junzi Kitchen will likely wait to reopen their dining rooms. Right now for their original fast-casual concept and newly opened takeout spot, Nice Day Chinese, it makes more sense to rely on digital orders for now.

“We want to observe what happens first before we try indoor dining,”Junzi Kitchen CEO Yong Zhao said. “[If there’s an outbreak] the 25% may be rolled back so we don’t want to get dependent on it. If you’re going to do it, the marginal benefits and return on 25% capacity are pretty small.”

When figuring out the cost-benefit analysis of opening up on September 30, or at any time during this first phase of New York City dining, the most expensive investment could very well be in upgrading the restaurant’s filtration systems.

Some restaurants have already tried installing new sanitation technologies like cupcake shop chain, Magnolia Bakery, which announced in June that they would be installing UVC sanitization lights to zap germs like coronavirus bacteria.

But the New York City guidelines now specifically require restaurants to “meet the highest rated filtration compatible with the currently installed filter rack and air handling systems, at a minimum MERV-13, or industry equivalent or greater.”

According to Chris Fox, president of Rochester, New York-based R.P. Fedder Industrial LLC, which makes and sells commercial filtration and purifier producers, the higher the MERV rating, the smaller the particle size that the filter will be able to catch and filter out. MERV-8 is the standard-sized filter, which mostly captures larger dust particles to cleanse the air. MERV-13 filters are usually used in sterile settings like hospitals.

“The thought process is that when we speak or sneeze, we put out these droplets and if I’m infected, those droplets contain virus particles,” Fox said. “While the heavier droplets fall to the ground, the smallest ones can attach themselves to fine dust particles in air and linger in the air and float around and someone walking by can inhale it. MERV-13 is better suited at capturing those smaller particles.”

The challenge is not only going to be the price — about three to four times the cost of MERV-8s at 10s of thousands of dollars — but also the backlog. Because so many buildings, including hospitals, doctor’s offices, gyms, schools, and now restaurants are looking to buy MERV-13 filters, there is a backlog of about 12-16 weeks, he said. In short, it would be nearly impossible for a New York City restaurant to be completely compliant by Sept. 30.

Additionally, the filtration devices should ideally be changed out every two to three months because after a while, they stop working properly. Safety compliance could therefore become a very steep expenditure that many restaurants would not be able to afford.

Most of the restaurants we interviewed had not even begun looking at the air filtration requirements, but they were overwhelmed by the sheer detail of these new requirements.

“it’s very confusing why the HVAC guidelines, the contact tracing and guests temperature requirements are only required in New York City,” Euripedes Pelekanos said. “If the decision was based on science, it’s odd that the science doesn’t apply to other parts of New York.  We all shake our heads in confusion and frustration.”

Contact Joanna Fantozzi at [email protected]

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