By Chris Mohney
When New York’s Olmsted shut down due to the coronavirus restrictions, chef/owner Greg Baxtrom and general manager/owner Max Katzenberg decided to take the lead on organizing the city’s hospitality industry to advocate for government intervention. Specifically, they lobbied for the state sales tax payments—due today, on March 20th, 2020—to be delayed so that operators could more confidently pay their workers. That policy change was actually announced by New York state during this interview.
MAX KATZENBERG: It’s a surreal situation to have your whole industry shuttered essentially overnight. Sunday night into Monday. We’re doing all that we can to try to keep morale up and get our message out.
GREG BAXTROM: We had to lay everyone off. At first we were going to switch to carry-out, employ as many people as we could. But that’s not really saving anything. It could create a couple thousand dollars. But you have to split that among 60 people. It’s not even a band-aid. And now you’re endangering your staff by having them work during this situation, and you’re going to have deliveries, and you’re endangering those people. So we just said, okay, fuck it, shut it down, and we’ll start a GoFundMe page. Max and I thought we’d get like two or three grand. And now it’s over fifty grand. It’s remarkable.
We were just sitting around, isolating ourselves. And we were not seeing a unified effort in our industry, in New York. Chicago did it really well. They got together really quick and started sending their message out in a very concise way to their governor. And that’s what we’re trying to do here. The New York state sales tax is due today from restaurants. That money could be used to help payroll and help our staff.
MAX: The New York Hospitality Coalition is a grassroots effort. It’s a unification of our 250,000 hospitality workers in New York City. We need to focus our voice. We need to prioritize our issues. And we need to preserve as many of those 250,000 jobs as possible. That’s the main question now. How many of those jobs are still going to be there when this is all over? And are we heading towards a recession or a depression in this city? Will 150,000 jobs be lost? Or 200,000 or 225,000? That’s up to what the government does now. And it’s not only stimulus. It’s not only disaster relief. That’s a big part of it.
Our first point of action is to request that these sales tax payments for businesses who have been interrupted—the entire hospitality industry and others—be suspended. Those payments are due today. We’ve had no cash flow since Sunday night. Operators are now in the position of choosing between bouncing payroll checks and paying their tax on time. There’s been no disaster relief to the hospitality industry at this point. And we need cash now. We need help now. We cannot have our businesses shuttered and then be treated as if it’s business as usual. And that’s a little bit what it feels like.
This week, the news was, who’s temporarily shuttered, who’s going to delivery and take-out. We do not want the news of next week to be which restaurants and bars are bouncing payroll checks. Who can come back from that? This is a small margin industry. This is an image-based industry, and damage like that can sink a business. We need to unify the industry and talk to our representatives and our government. We all have to get on the same page of saving these jobs.
In normal times—and they’re treating it like normal times—there’s an immediate 10 percent penalty for not paying your sales tax on time. There is an exorbitant interest rate. And if you cannot get onto a payment plan immediately—and how could these businesses get onto a payment plan if they don’t have any cash—a tax warrant is issued, and the businesses are seized by tax marshalls. And even now, we’ve been given no indication by the government that’s not their current position. It’s just an awful circumstance for all … for the government, for the operators. We need disaster relief. This was a total disaster and it needs to be treated that way.
We’ve spoken with one of the governor’s representatives. Our colleagues in other organizations have been working very closely with the governor’s office. They’re saying they are aware of the situation. They agree with us that the vibrant hospitality industry that we have in New York City is what makes New York City the best city in the world. Now we need to see those words they’re seeing match up with their actions as far as providing disaster relief, today, for these businesses.
As this interview concluded, New York State Budget Director Robert Mujica, along with Governor Mario Cuomo, announced that the state would forgive penalties and interest for late tax payments until July 15. In response, Max Katzenberg said, “This is a victory for the hospitality industry. Those who cannot pay will not be forced to. It is a very good first step.”