Blue Hen

New York Restaurants Juggle Rent Increases and Regulations

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From left to right:
• Steven Picker, Executive Director, Food and Beverage Industry Partnership, NYC Dept. of Small Business Services
• Melissa Fleischut, CEO of the New York State Restaurant Association
• Taniedra McFadden, Director of Operations, Sylvia‘s Restaurant in Harlem

The New York State Restaurant Association hosted a panel yesterday at the International Restaurant & Foodservice Show of New York to discuss how restaurants, particularly those in New York City, can survive amid increasing rents and regulations, like New York State’s new $15 minimum wage.

“It’s a balancing act,” said Taniedra McFadden, Director of Operations at Sylvia’s, a legendary Harlem soul food restaurant that has been in business since 1962.

McFadden was referencing the challenge of retaining the restaurant’s employees, some of whom have worked there for 35 years, while having to pay them all New York State’s increased minimum wage. She said that they have been creative by reducing shifts from five to four and eliminating overtime. McFadden said that they are also working with a new POS (point of sale) system, called Aloha, that allows the restaurant, which has three dining rooms, to control clock-ins and clock-outs of their employees.

“Our employees aren’t thrilled and they’re pushing back,” McFadden said. “But we’re pushing back because we don’t have a choice. And we’re trying to educate them on why.”

“Between rising rent and food costs, it can feel like the world is against them,” said NYC Department of Small Business Services Steven Picker of NYC restaurateurs, who was a restaurateur himself more than 20 years ago.

Picker said there were many services that his office can provide to NYC restaurateurs, although he conceded that 90% of the resources on the site are meant to help startup restaurant owners, not those that have been in business for a few years or more. However, McFadden said that the decades-old Sylvia’s has used advisors from the NYC Department of Small Business Services that have helped them with inspectors of their kitchen and have also helped them with recruiting.

Moderated by Melissa Fleischut, President and CEO of the New York State Restaurant Association, Fleischut asked McFadden “If there was one regulation you could remove, what would it be?” McFadden couldn’t pick one. Instead, she gave an example of of how, according to regulations, an employee could legally take as many as 22 consecutive weeks off for medical leave and caring for an ill family member.

“With a small business, I don’t have the luxury of having someone out for 6 months. I’d have to hire someone else,” McFadden said. “I wish legislators would consider both sides - the employee, and the employer.”

The subject of using technology to reduce overhead was also discussed. But at what cost?

Someone in the audience said it would be heartbreaking if Sylvia’s ever had self-ordering tablets on its tables.  

“Putting a screen on the table [to order your meal] doesn’t feel cozy to me,” McFadden said. “But I’m looking at everything.”

See photos from the show here

Small Business