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Ms. Hamilton Exactly How I've Felt About It For 15 years


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but yeah, i'm not that into the privileging of the voices and perspectives of chef/owners like this guy or hamilton over the situations of their workers, who they often talk about in paternalistic ways. there are very few restaurants whose specific closings will be actual catastrophes and all these chef/owners will be fine even when they close (which is not to say that these closings may not be sad). but every worker who slides into poverty or gets sick and dies will be a catastrophe. let's hear (from) less of/about the former and more from/about/of the latter.

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My situation was far from what is average. My job then involved lots of travel--where basically all my expenses were covered for 28 + weeks of the year while I was traveling. Health insurance was part

I love making my own morning coffee. We have no credit card debt. Our rent is cheap. We have a stash. Baby boomer indeed.

#notallboomers

2 hours ago, Steve R. said:

Okay, so I'm clearly not the finance person on this board, but I listen and try to understand what seems to be a foreign language to me.  At any rate, on MSNBC this morning (Stephanie Ruhle's hour), Gabriel Stulman spent some time talking about the restaurant industry.  A lot of what he said made sense to me (like the idea that the restaurant industry should be separated out as a specific category, the way the airline industry has been, and specific measures taken to assist), but there were a couple of things that I really wondered about and worry that he (& probably others in his peer group) don't get (or don't want to get). 

The first was the federal PPP, which he wanted amended (no talk about him giving back anything even though he owns 9 places as CEO of a company and isn't exactly a "small" business compared to a lot of others).   A close paraphrase of what he said was that keeping his employees on for the 8 weeks while the restaurants were closed was not an effective use of the funds and that there were other things that would better keep these businesses solvent.   So... my question to youse financial guys is this: isn't he (intentionally?!) confusing the purpose of these specific funds, which I didn't think was to help businesses (his or others) in general, but to specifically keep folks on payroll (that's what the first "P" is for, right: "payroll"?).  Is this not the case?  What am I missing?  

The second thing I wondered about was his disclosure that most of his leases required a personal guarantee and that, if he wants out of any, he is personally responsible for paying the landlord for 3-6 months rent (depending on the lease he signed) and losing his security deposit.  He questioned this, saying "isn't it enough that the business goes bankrupt... should they be able to come after my house, etc too" (paraphrase).  I was left wondering why not, since those were the leases he signed.  Sure, he didn't foresee a pandemic & having all 9 closed, but the landlords (god help me, I'm not one to generally side with landlords) didn't foresee 9 bankrupt restaurants leaving vacant storefronts with no way to re-rent them either.  Given the restaurant industry's known insecurity in good times, wasn't this clause a good idea for the building owners and saying "let my personal wealth go untouched even though I personally guaranteed the rent" just passing the buck elsewhere?  Wasn't this lease entered into "eyes wide open"?  I mean, isn't it possible that at least a couple of the landlords are actually less wealthy and unable to absorb the loss, even in the West Village?  Maybe this would be a good time to sell shares in his places and reorganize (maybe at 25% on the dollar) to keep afloat and stop whining that he's the only one suffering?

I guess that I just think that some "celebrity chefs", like other "celebrity" categories (athletes, entertainers) seem to come off as very "entitled" & more worthy of protection than those without such amazing talent, who have to actually wait on the tables or work the box office.  Or, on the other side of life, more protection than the banks and landlords they worked with to hopefully make their fortunes.

::gold star::

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Yeah, he's intentionally confusing things and he's not the most sympathetic cat, but, I don't know, it is somewhat hard to entirely sympathize with the literal economic rent extractors as against the operational (smallish) business. If you assume you can rent to a much bigger business at higher rents when this all ends, and you also can realize on the personal guarantee to make yourself whole for the lost rent for the three to six months the tenant is required to be closed, it's a rational move by the landlord to boot Stuhlman and not, I think, the socially beneficial outcome. It's pretty vicious to be told that you have to lose your house because the government has banned your otherwise operational business for four months or whatever. When you went into things with your eyes open you also weren't expecting that the government would shut down your operation and, even if they did, there is a virus that makes people not want to hang for a few months.

It seems to me that, mostly, whatever we can do to avoid having this thing reallocate capital away from businesses that were viable pre-COVID we should.

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return on capital isn't a rent man. C'mon you marxist. Or georgist I guess really.

My original point was really just that landlords are delusional if they thought they could boot him out and be better off.

 

Talking to people who might know I've actually been told showing up in court trying to repossess things is being seen as a Very Bad Thing at the moment.

I'm most intrigued to see how people who make their living doing that behave.  If they get their teeth kicked in could happen to a nicer group of guys.

 

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2 hours ago, Adrian said:

Yeah, he's intentionally confusing things and he's not the most sympathetic cat, but, I don't know, it is somewhat hard to entirely sympathize with the literal economic rent extractors as against the operational (smallish) business. If you assume you can rent to a much bigger business at higher rents when this all ends, and you also can realize on the personal guarantee to make yourself whole for the lost rent for the three to six months the tenant is required to be closed, it's a rational move by the landlord to boot Stuhlman and not, I think, the socially beneficial outcome. It's pretty vicious to be told that you have to lose your house because the government has banned your otherwise operational business for four months or whatever. When you went into things with your eyes open you also weren't expecting that the government would shut down your operation and, even if they did, there is a virus that makes people not want to hang for a few months.

It seems to me that, mostly, whatever we can do to avoid having this thing reallocate capital away from businesses that were viable pre-COVID we should.

Yeah, I get that.  I have several friends who have stand alone restaurant businesses with large overhead.  And, maybe they have mega corporation or hedge fund landlords that I can re-label "rent extractors".  It does conjure up some really bad feelings to think that these friends might lose their personal shirts because of something they have no control over and is being enforced by the government.  But, I really don't know if Stulman's corp. isn't wealthier than any/all of his landlords (he has 9 upscale restaurants in the corp. that he's CEO of and a W.Village landlord may well own 1 well placed building for a very long time).  But, let's assume that the building owner is bigger and wealthier than "Happy Cooking Hospitality" (Stulman's corp.)...

1- why does he think it supportable to do the same thing to his employees that he doesn't want the landlord to do to him; that is, get the ground rules to allow him to not pay his workers and use earmarked federal PPP dollars for his business needs instead of payroll?  Why is he, the middle person, obviously more worthy than those both below and above him?

2- why does he think that his personal wealth, which he voluntarily put on the line by signing the lease guarantees, should be exempt from this, but that his employees personal wealth should be used while unemployed and his landlords' wealth should be used to make up for lost expected income?  

3- since no one is being evicted here, shouldn't we expect that he (the Corporation) do everything possible to keep each individual restaurant in business and have the corporation first use other means to pay its payroll & debts?  An Eater article describes 3 of his landlords agreeing to "work with him" on some compromise solution.  Gee, maybe its time to agree to sell a 50% partnership in what will be, down the road, a resumed lucrative restaurant (& restaurant corporation) or max out small business loans from other sources?  Maybe government bail-out funds are more important to others who don't have the resources I'll bet he does.

4- as for the personal wealth issue, if he is going to do P.R. and explain that his restaurants operated on "single digit profits" in good times (which he said), maybe he should be somewhat transparent on these restaurants' spreadsheets.  So, was the profit margin so slim that he, and a bunch of others, could only take moderate salaries, or was the slim profit margin because of other factors?  I've worked with many "non profits" (that, by definition, means a less than single digit profit equal to 0%) whose Admin structure made sure that quite a few highly placed individuals  "earned" very large amounts in various ways -- all calculated before "profit".  Is his personal wealth tied to that -- of course it is (& should be).  So... how much has the corporation been paying its CEO & others and how much might they be still paying them during this pandemic so far, while laying off workers and not paying bills to landlords and others?  Just wondering what his salary has been in the last several months, if the corp. still had some "single digit profit" savings in the account.  Maybe he's better than that but, before he tugs on my heart strings, its his job to show me if he wants support.  

For me, he's leaving too much unsaid, while picking exactly what to say.  Everyone wants to be the victim.  I choose which to use my moderate means to support carefully.

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I'd just like to say that, while I sympathize hugely with restaurant workers (certainly more than owners), if the bartender at the fancy Midtown restaurant who told me a few months ago that he thinks it's fair that he makes (made) a decent living out of tips, while the non-English-speaking immigrants in the kitchen (who produce the actual product that customers come to the restaurant for) worked for slave wages, because he "chose" to be FOH rather than BOH slips into poverty, I wont' be crying any tears.

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Just now, Sneakeater said:

I'd just like to say that, while I sympathize hugely with restaurant workers (certainly more than owners), if the bartender at the fancy Midtown restaurant who told me a few months ago that he thinks it's fair that he makes (made) a decent living out of tips, while the non-English-speaking immigrants in the kitchen (who produce the actual product that customers come to the restaurant for) worked for slave wages, because he "chose" to be FOH rather than BOH slips into poverty, I wont' be crying any tears.

Workers can be assholes too.

Overall, I worry more about the folks whose resources give them more way more assholery potential.

My mother could sound like Trump.  She couldn't do as much damage.

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2 hours ago, Steve R. said:

Yeah, I get that.  I have several friends who have stand alone restaurant businesses with large overhead.  And, maybe they have mega corporation or hedge fund landlords that I can re-label "rent extractors".  It does conjure up some really bad feelings to think that these friends might lose their personal shirts because of something they have no control over and is being enforced by the government.  But, I really don't know if Stulman's corp. isn't wealthier than any/all of his landlords (he has 9 upscale restaurants in the corp. that he's CEO of and a W.Village landlord may well own 1 well placed building for a very long time).  But, let's assume that the building owner is bigger and wealthier than "Happy Cooking Hospitality" (Stulman's corp.)...

1- why does he think it supportable to do the same thing to his employees that he doesn't want the landlord to do to him; that is, get the ground rules to allow him to not pay his workers and use earmarked federal PPP dollars for his business needs instead of payroll?  Why is he, the middle person, obviously more worthy than those both below and above him?

2- why does he think that his personal wealth, which he voluntarily put on the line by signing the lease guarantees, should be exempt from this, but that his employees personal wealth should be used while unemployed and his landlords' wealth should be used to make up for lost expected income?  

3- since no one is being evicted here, shouldn't we expect that he (the Corporation) do everything possible to keep each individual restaurant in business and have the corporation first use other means to pay its payroll & debts?  An Eater article describes 3 of his landlords agreeing to "work with him" on some compromise solution.  Gee, maybe its time to agree to sell a 50% partnership in what will be, down the road, a resumed lucrative restaurant (& restaurant corporation) or max out small business loans from other sources?  Maybe government bail-out funds are more important to others who don't have the resources I'll bet he does.

4- as for the personal wealth issue, if he is going to do P.R. and explain that his restaurants operated on "single digit profits" in good times (which he said), maybe he should be somewhat transparent on these restaurants' spreadsheets.  So, was the profit margin so slim that he, and a bunch of others, could only take moderate salaries, or was the slim profit margin because of other factors?  I've worked with many "non profits" (that, by definition, means a less than single digit profit equal to 0%) whose Admin structure made sure that quite a few highly placed individuals  "earned" very large amounts in various ways -- all calculated before "profit".  Is his personal wealth tied to that -- of course it is (& should be).  So... how much has the corporation been paying its CEO & others and how much might they be still paying them during this pandemic so far, while laying off workers and not paying bills to landlords and others?  Just wondering what his salary has been in the last several months, if the corp. still had some "single digit profit" savings in the account.  Maybe he's better than that but, before he tugs on my heart strings, its his job to show me if he wants support.  

For me, he's leaving too much unsaid, while picking exactly what to say.  Everyone wants to be the victim.  I choose which to use my moderate means to support carefully.

I don't disagree with this. GS is making a lot of self serving points!  I do think, regardless of the ethics of this particular situation, it's a bad outcome if operators are forced to sell equity (at fire sale prices), or expose themselves to personal risk, or even drain the kitty because they have been forced to close. This should, obviously, not come at the expense of workers. Nor should operators bear the brunt of this (though structurally they do bear the most risk). Landlords are probably best situated to weather the loss, but probably shouldn't either! The prohibited political comment is that if government is going to tell people to shut down their business, it should cover them - especially when they can make the money printer go brrrr.

Landlords do have contractual recourse against the assets of the business itself (notwithstanding AB's post about repo folks) and the security deposit so, they have some cover and, given the circumstances, I think that advocating for limitations on personal liability, or policies that prevent immediate recourse against personal assets, are a good thing. I think the benefits likely outweigh whatever damage it does to the sanctity of contract law.

Again, this isn't a defense of Stulman's behaviour in any other regard, just a statement that his argument about whether he should be exposed to any level of personal liability in this situation resonates.

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3 hours ago, Adrian said:

I don't disagree with this. GS is making a lot of self serving points!  I do think, regardless of the ethics of this particular situation, it's a bad outcome if operators are forced to sell equity (at fire sale prices), or expose themselves to personal risk, or even drain the kitty because they have been forced to close. This should, obviously, not come at the expense of workers. Nor should operators bear the brunt of this (though structurally they do bear the most risk). Landlords are probably best situated to weather the loss, but probably shouldn't either! The prohibited political comment is that if government is going to tell people to shut down their business, it should cover them - especially when they can make the money printer go brrrr.

Landlords do have contractual recourse against the assets of the business itself (notwithstanding AB's post about repo folks) and the security deposit so, they have some cover and, given the circumstances, I think that advocating for limitations on personal liability, or policies that prevent immediate recourse against personal assets, are a good thing. I think the benefits likely outweigh whatever damage it does to the sanctity of contract law.

Again, this isn't a defense of Stulman's behaviour in any other regard, just a statement that his argument about whether he should be exposed to any level of personal liability in this situation resonates.

We mostly are of like minds.  Since the government forced the shutdown (for very good reason, I might add), protecting business owners from personal liability and limiting it to the business itself, regardless of the contract signed, is probably the right thing to do.  But, given that the federal government is probably not going to print up enough money to bail out everyone at every level, priorities need to be set.  It seems to me that everyone is willing to, in practice (not in theory), throw the folks who worked in the kitchens and front of house overboard so that "the business" can survive &/or the business owner(s) can keep their "earned" money.   I don't expect everyone to be a Jose Andres or even a Michael Bloomberg, but some introspection and context in their presentation would go a long way with me (like they care).

This evening, the owner of Li-lac Chocolates, a company I've liked since Bleeker St days & enjoyed seeing headquartered at Industry City, made much the same pitch on a NY 1 interview to "save his business" by allowing for something other than the current PPP regs. for him to get his "loan" forgiven.  He didn't think it best to rehire all 60 employees for 8 weeks and show that 75% of the "loan" went to payroll in order for it to be forgiven.  And all I could think of was "ingrate".  Sure, he might have to re-think how to offload the inventory these folks would produce for him with his stores all closed, but he'd be getting a free payroll, 25% free other money & the extra product to sell.  Not as good as just giving it to him and singing "happy birthday" but pretty fucking nice, considering those that haven't yet gotten a damn thing, free or loaned.  Another company I won't be patronizing afterwards.

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