Opportunity Knocks: Even when forced to close during the pandemic, some eateries still found ways to expand
By Soo Min Kim
The flavors of Korea begin along Northern Boulevard in Flushing. From ginseng boiled chicken, kimchi stew to beef barbeque, there are hundreds of restaurants serving authentic Korean food.
Hahm Ji Bach is one of the most robust Korean restaurants. It opened in 1999 and has space for 165 diners including outdoor seating. However, during the pandemic, the restaurant closed for four months from March to June 2020.
A Korean immigrant, Byeong Chul Kim, 51, a head manager of Hahm Ji Bach was out of work for four months. “I was actually depressed,” Kim said. “I didn’t know what to do for a living”
Former Governor Andrew Cuomo issued an executive order declaring a state of emergency in March 2020, when the city was the global epicenter of the pandemic and more than 224, 000 restaurant workers lost their jobs by April, according to the office of the New York State Comptroller.
It seemed unlikely that Kim could go back to the restaurant anytime soon. He said he was scared and could not sit and wait until everything got back to normal. “I had to do something to live,” he said. “I pushed myself and took every part-time job I could possibly get. I started with Uber driving and food deliveries.”
But even during the chaos and shutdown some restaurant owners including the owner of Hahm Ji Bach found once-in-a-lifetime opportunities.
“Although it was hard for us employees, the pandemic was a good opportunity for our owner to buy a new restaurant at a much cheaper price,”, said Kim, who returned to his job in June 2020.
“Some restaurants that would cost above $200,000 during the pre-pandemic were out on the market with a massive price drop and were sold at $50,000, it was a steal,” Kim added.
The restaurant was eligible for the SBA Paycheck Protection Program (PPP), which provided forgivable loans to small businesses, nonprofits, sole proprietors, and other entities with fewer than 500 employees and which received about $10,000 from the government.
The owner of Ham Ji Bach, Young Hwan Kim, owns three more restaurants: Janchi Myeonga, Porridge Story, Coffee Factory. And he recently opened a fourth restaurant called Daori BBQ, in September, which serves various Korean-style duck dishes.
The restaurant has recovered about 70% of its pre-pandemic average monthly revenue and is operating at full service with 20 staff members. The restaurant is crowded with regulars. “We have about 126 open seats including our outdoor tables and we usually have two rounds of customers near our full capacity during the peak time, lunch and dinner,” said Kim.
Another restaurant owner, Esther Choi, just opened her fifth restaurant Mokbar in Midtown in September. She signed a lease with a Manhattan food hall, the Hugh, on Lexington Avenue and 53rd Street, right before COVID-19 hit the city. Although she had to shut down all of her restaurants for two months, she decided to continue the lease and kept the space for her new restaurant.“I knew that Covid-19 is not going to last forever,” said Choi.
The Hugh also allowed the restaurant owners to operate their business rent-free until the end of this year. “If COVID-19 gets worse again with the delta variant, the landlord would also be willing to adjust the rent,” Choi said. “We were lucky.”
Choi’s other restaurant in Chelsea Market, on 9th Avenue, is owned by Google and was also granted a rent exemption during the crisis.
Her business’ revenue is also returning to its pre-pandemic level and she is hopeful about its future. “Especially my bar, Ms.Yoo, I can’t even go in there during its peak time,” she said. “It gets really crowded so I only go check on them during the week.”
Jeremiah Stone, 37, is another restaurant owner who recently opened his fourth restaurant in August 2021. Stone and his business partner, Fabián von Hauske, rented a space and built a new restaurant last year during the pandemic. It is a hamburger restaurant called Mighties on Delancey Street on the Lower East Side. Stone owns three more restaurants in the city: Contra, Wildair, and Peoples.
Stone, too, had a difficult time keeping all of his restaurants open during the crisis and had to close his wine bar, Peoples, in March 2020. He recently reopened it this summer.
“After last year, upon shutting down the restaurant, it really felt like a handicap,” said Stone.
To maintain his restaurant business and his regular 55 employees, he not only applied for SBA loans, but he also started multiple fundraising projects, collaborated with non-profit organizations, sold merchandise online, and did private event catering.
“The biggest thing that we learned was how to be more accessible outside the restaurant, you know, have a bigger presence online,” he said, “how to have a larger reach than just the physical attendance in the restaurant.”
His restaurants have recovered about 90% of their revenue and his regular customers have returned.
There is a trend in reopening new restaurants since the pandemic has been abated. As the government alleviates the rules and regulations with the outdoor dining permits, a total of 11,889 restaurants have opened since September 2021 according to the NYC open data.
Kathleen Reilly, Government Affairs Coordinator for the New York State Restaurant Association, said despite some restaurant owners’ successful expansion, it’s still too early to assume that the restaurant business has recovered, as “most of the people in [NYSRA] membership did not open new restaurants.”
Reilly said the restaurant openings are still far below where they were pre-COVID. It took six months for employment in the restaurant industry to rise to 174,000, according to the NYC open data.
Statewide, according to the restaurant association’s recent survey, 71% of operators had lower sales volume in August 2021 compared to 2019. In August 62% of operators report worse business conditions now than even three months ago. And the majority predicted a very long road ahead on the recovery, normal business conditions, with 20% saying it would take seven to 12 months, 49% saying it would take more than a year, and 18% saying it will never happen.
“Many are in a really difficult position because they've been taking various kinds of losses over the last year and a half,” Reilly said. “They went months without even being able to have any on-premise dining. So all those losses add up.”
The damage the pandemic has already done is coming into focus. According to the data collected from multiple sources on a city level, including the health department and the New York Times, which has been collecting data on restaurant openings in New York City, there have been 1,713 new restaurant permit applications from Jan. 1 through July 2, according to figures from the city health department.
“The data also includes renewals for existing restaurants. And still, in 2019, the number of applications for roughly that same period was 2,388, and many owners say they’re a long way from the old normal,” said Reilly.
The strict vaccine mandate in New York City could also create a point of friction for restaurant operators.
“It's not about liking or not liking the vaccine. It's about having your 20-year-old hostess at the door getting screamed at by some person who doesn't like the vaccine,” said Reilly.
As restaurant owners struggle to find or replace laid-off employees after the pandemic, their establishments face a higher level of scrutiny than ever. Many worry that with the approach of winter, both vaccinated and unvaccinated people who were already pressured to abide by the strict requirements will take their business somewhere else.
There is also a push from the city to make the current open restaurants program into a permanent outdoor dining program. The permanent program isn't the same as the current open restaurant’s program; it allows outdoor dining all over the city where it used to be governed by geographical restrictions. But the program is getting backlash from nearby residents, who don't like the noise.
Meanwhile, restaurant owners are preparing heaters for outdoor diners as this winter is predicted to be a brutal one in NYC. Still, restaurants in NYC are evolving and expanding creatively in order to survive the changing business trends brought by the pandemic.
“It’s very difficult to find employees in the restaurant business now but I think of doing things that I never would have considered, like what you're capable of doing outside of the restaurant,” said Stone. “So whether that's in catering, merchandise, anything that allows you to exist outside of the four walls.”