Strict rules on booze bills threaten NYC restaurant reopenings

A state-ordered blacklist for New York City restaurants who have fallen behind on their booze bills is threatening to crimp plans to reopen this week, The Post has learned.

The so-called Phase Two reopening for the Big Apple on Monday allows the city’s 26,000 restaurants and bars to resume outdoor dining after spending months under a coronavirus lockdown that has limited them to takeouts and deliveries.

But when thirsty patrons begin filling up the sidewalk tables, cash-strapped restaurateurs will be scrimping every last penny to keep the beer, cocktails and rosé flowing.

That’s because state regulations order that restaurants whose monthly booze bill isn’t paid in full can’t use credit or borrowed funds to buy alcohol. This strict cash-payment condition has been all-but-impossible to meet for most of the city’s shuttered restaurants, according to industry officials.

Terroir Tribeca — a chic wine-and-tapas venue that seats 65 indoors — ordered roughly $30,000 worth of booze in late February, a few weeks before it got shuttered by the lockdown ordered by Gov. Andrew Cuomo on March 16. To add insult to injury, owner Paul Greico notes his wine list wasn’t ready for the change in seasons that would follow.

“I had zero rosé,” Grieco laments. “Now all of a sudden it becomes 50 percent of your wine sales, and I need to buy rosé and I’ve got no goddamn money to do that.”

The State Liquor Authority’s “Delinquent List,” which forces restaurateurs who haven’t paid their monthly liquor bill in full to pay cash for any booze orders, usually ensnares less than 5 percent of the city’s restaurants in normal times, according to Robert Bookman, an alcohol regulatory expert who serves as counsel to the New York City Hospitality Alliance.

The SLA couldn’t provide the exact number of businesses currently on its delinquent list, but Bookman estimates it has likely now engulfed an “overwhelming majority” of New York City restaurants and bars.

“Theoretically, you could have places opening and within a few days they have exhausted their alcohol supply that they had for March,” Bookman said. “It could really negatively impact their opening and their ability to get moving again and bring in revenue again.”

Darryl and Melissa Burnette are among the lucky ones who are able to restock before reopening. They used part of a $132,000 Small Business Administration loan to get their restaurant, Belle Harlem, off the delinquent list last week.

But the list made surviving the shutdown harder because it prevented them from ordering wine to sell to go. That meant they couldn’t capitalize on soaring demand for booze from locked-down consumers.

“We would’ve been able to do pretty well if we were able to increase our stock,” Darryl Burnette told The Post.

The New York State Restaurant Association has called on the SLA to relax the rules for at least 30 days to help restaurants get back on their feet, Chief Executive Melissa Fleischut said. But state officials claimed that would be unfair to the wholesalers, she said.

“I tried to explain to them the wholesalers aren’t going to get their money anyway,” Fleischut told The Post. “[Restaurant owners] can’t pay.”

Wholesalers can’t give restaurants a break on their own because state law dictates that they report delinquent customers. The law also contains rules governing prices and credit that would bar wholesalers and restaurants from working out a payment plan, according to SLA spokesman William Crowley.

Crowley did not explain why the SLA hasn’t relaxed those rules. But he said officials have taken other steps to help restaurants and bars during the crisis — such as letting them sell cocktails to go and extending license-renewal-fee deadlines.

“We understand the difficulties these businesses are facing and will keep supporting them as the state’s economy continues to reopen,” Crowley said in an email.

Terroir Tribeca’s Grieco said he has “a few shekels in the bank” to buy about $1,000 worth of rosé before he reopens Wednesday. But with the costs of reopening and roughly $200,000 in outstanding bills, he estimates he won’t be able to pay off his old booze bills for six to eight more weeks.

He blames the state’s inflexible laws, which prevent him from making a deal with liquor wholesalers like he can with food vendors or his landlord.

“Everyone else is willing to have a conversation and I can’t with that group of vendors, and your back’s against the wall,” Grieco said.