Broke in Philly

Philly passes 180-day ban on restaurant evictions, throwing struggling industry a lifeline

Other retail businesses are still looking for relief, as landlords demand rent payments.

An outdoor dining set-up in December 2020

An outdoor dining set-up in December 2020

Mark Henninger / Imagic Digital
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Philly restaurants struggling to pay rent may be getting a winter reprieve. Philadelphia City Council passed a bill Thursday that would prevent independent proprietors from being evicted for the next 180 days.

The six-month eviction moratorium, spearheaded by City Councilmember Bobby Henon, applies to non-chain restaurants with fewer than 100 employees. With unanimous passage in Council and an expected signoff from Mayor Jim Kenney, it’s a godsend for an industry whose cash flow has been decimated by coronavirus safety restrictions and the recent ban on indoor dining.

“For a lot of restaurants, this is definitely a huge relief,” said Rich Landau, co-owner of Vedge in Center City. “We’re in a fly-by-night business. We can’t raise our prices, and all the hard work could go up in the snap of a finger if they get evicted. This is going to be a lifeline.”

The breathing room on rent, which can cost tens of thousands of dollars monthly, will at least help restaurants get through to the warm weather, when outdoor dining becomes pleasant again.

And by spring, the city is expected to be well into the dissemination process for a coronavirus vaccine.

After the pandemic hit in March, the city enacted a moratorium on evictions that included small businesses with 100 employees or less. That ban expired at the end of August, and this new moratorium comes too late for a number of Philly restaurants that felt the strain of high rent.

So far, the city has lost popular dining rooms in nearly every retail corridor. Revolutionary Era throwback City Tavern shut down in Society Hill. Groundbreaking martini bar Continental ended its run in Old City. Irreverent ramen house Cheu Noodle Bar shuttered in Washington Square West. Southern food kitchen Green Soul closed up on North Broad.

While the new ordinance may help other restaurants make it through, it still leaves thousands of struggling small businesses in other industries vulnerable to eviction.

Anna Shipp, the executive director of the Small Business Network of Greater Philadelphia, which represents hundreds of operations from cafes to mom-and-pop shops, has been pushing for an extended eviction moratorium.

“Some landlords are being flexible and some of the members have been able to negotiate partial payments — 80% or 50% or rent — but cash flow is a pretty significant concern,” Shipp said.

A recent bill to extend the widespread ban on residential and commercial evictions, like the one instituted in spring, is now dead in City Hall, according to sponsor Helen Gym.

Residential renters have some security through the holidays after the Philadelphia court system decided last month to pause residential eviction proceedings until the end of the year, though it’s unclear how many property owners will push out non-paying tenants after Jan. 1. Philadelphia Municipal Court is currently processing eviction cases for commercial businesses, a court spokesperson confirmed.

Meanwhile, many businesses will run out of federal stimulus money via the Payroll Protection Program within weeks, Shipp noted, and still there’s no timeline for a new relief package from Congress.

Under the new Philly law, all restaurants will be protected from eviction so long as they can prove they lost 50% of their revenue due to COVID-19 restrictions. The bill also suspends late fees on rent payments.

Said Henon, the bill’s sponsor: “While this legislation won’t solve every problem facing restaurants and catering facilities, it’s a measure that will provide some relief and ensure that our commercial corridors remain intact temporarily.”

 

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