Diners outside in Brooklyn Tuesday. A report from the state...

Diners outside in Brooklyn Tuesday. A report from the state comptroller's office paints a dire picture of the financial state of NYC restaurants and bars due to the coronavirus pandemic.   Credit: Peter Foley/EPA-EFE/Shutterstock/Peter Foley/EPA-EFE/Shutterstock

Up to half of New York City restaurants and bars in business before the coronavirus pandemic could close permanently within a year without financial support, state Comptroller Thomas DiNapoli warned in a report released Thursday.

The report came as the state began Wednesday to allow reduced-capacity dining indoors, at 25% of normal, masking mandates except when eating, temperature checks, requiring each party to leave contact information in case of an outbreak and other rules.

DiNapoli's report estimates that if a third of restaurants and bars close over the next sixth months to a year, it would mean a loss of nearly 8,000 establishments and 106,000 jobs.

"If the closures rose to 50 percent," the report says, "nearly 12,000 restaurants and bars would shutter and almost 159,000 jobs would be lost."

The report said: "While there are indications that revenues for open restaurants improved since their low point in March 2020, many establishments are still struggling and others remain closed."

Asked on Wednesday whether he planned to dine indoors at city restaurants, Mayor Bill de Blasio said: "So, what I'm going to do, for sure, in the coming days is continue, as I have, to enjoy outdoor dining first while the weather's still good."

Among the grim findings in the comptroller's report:

By August, industry employment had recovered only to 55% of February’s pre-pandemic level.

Slightly less than half of all city establishments — about 44% — have set up outdoor dining, suggesting reduced operations and closures are significant and may continue if further operational or financial support is not forthcoming.

"The COVID-19 pandemic has affected this sector to an unprecedented extent and in ways that have never been seen before. It has impacted individuals’ jobs and income, business owners, restaurant patrons and neighborhoods," the report says.

The report says of state pandemic-related safety restrictions: "The guidance should also change as public health conditions allow."

In a statement, Mark Johnson, NYC Hospitality Alliance executive director, said "many more polices must be enacted by all levels of government to help save these small businesses and our economy."

"New York City’s restaurant industry is vital to our economy and Comptroller DiNapoli’s shocking new report confirms with data the economic devastation that COVID-19 has inflicted on these vital small businesses. The Comptroller’s report sends a critical message that must be heard by policy makers and New Yorkers at large, which is, that in order to save our city’s greater economy, our restaurant industry must be at the core of its recovery."

Besides theaters, stadiums and cinemas, which remain closed by state order, eating establishments indoors in the city were among the last allowed to reopen.

Before the pandemic, the industry boomed: 23,650 establishments in 2019 provided 317,800 jobs and paid $10.7 billion in total wages citywide, and earned nearly $27 billion in taxable sales, the report says. From 2009 to 2019, industry jobs grew by 61%.

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