Hopes for a quick recovery fade in NYC’s Chinatown

The road to recovery for New York City’s Chinatown looks fraught with challenges: restaurants at half-occupancy, landlords attempting to collect on months of deferred rent, banks increasing loan-loss provisions. Yahoo Finance’s Brian Cheung joins Kristin Myers to discuss.

Video Transcript

KRISTIN MYERS: All right. So I want to bring in "Yahoo Finance's," Brian Cheung, here now to discuss, as we've been chatting a lot over the last couple of weeks, states and businesses reopening. Obviously, with these protests taking place some of these businesses, maybe think a longer road to recovery than they would hope. But here in New York City, in Chinatown, some businesses definitely being hard hit and facing a very long road ahead. Hey, Brian.

BRIAN CHEUNG: Hey, Kristin. So New York City's Chinatown again, down in downtown Manhattan has really received a double whammy over the past few weeks. In addition to the coronavirus shutdowns that have forced those businesses to close, there's also the protests that are going on right now that have disrupted many parts of the city. But what we did know before last week was that those Chinatown businesses, those restaurants and shops that you might see walking down Canal Street, walking down Mott Street, had been hammered because they've either been forced to close or are open in a limited capacity right now to take out or delivery. And much like every other restaurant that's out there in New York City, it's really hard to make money and then make those rent payments if you're essentially a stripped down business.

But in Chinatown, the specific concern is really on two fronts. First, xenophobia, with a lot of workers from these restaurants that even though the owner wants to reopen the restaurant, the workers don't want to get on public transit because they're worried about getting assaulted. We've heard about cases of Asian-Americans being targeted on the New York City subway as they commute from the outer Chinatowns, like in Flushing or Brooklyn, into Manhattan. And the second bit of it is also just the foreclosures that could threaten those business owners that are actually the landlords of those businesses. So one example being, I had a chance to speak with Chan Lee. He is a landlord who actually has three tenants, two restaurants, and one shop.

And he was saying that, I haven't collected any rent for the month of May. And if I need to pay my tax payments which, by the way have not been deferred, despite the fact that there is some rent forgiveness going on in the city, he might have to foreclose on his business-- on his building, as many other landlords who have owned their buildings for multi-generations do in New York City. So there's this ripple effect you can see through New York City, Chinatown, where is the concern those businesses might not return even after the shutdown lifts.

KRISTIN MYERS: So, Brian, I know, as I mentioned earlier, that protests have also been hitting some small businesses pretty hard. Have you at all, you know, heard any updates over the last couple of days of maybe there's business owners being hit with almost a one-two punch, first coronavirus and now protests?

BRIAN CHEUNG: Well, because it's-- everything has really escalated so fast over the last week, really with most of the protests and disruptions happening this weekend, still a little bit of a back and forth in terms of what the actual impact has been of the protests on those small businesses. But when you consider that A, these restaurants are not open for dine-in any way. So it's not like people are necessarily sitting in the restaurants and being forced out by the protesters, or any of that.

I mean, they were already relying on people-- on delivery drivers, essentially, sending out orders into the city. And to what degree maybe that has been disrupted because people who drive for Uber Eats or people who are on those bikes can't necessarily get to the city. That could be one factor.

But I think that some business owners, and again, have yet to really talk to them, but I'd imagine a lot of them would say, our revenues are already down 75, 80% in some cases. So even if we lose a little bit more business, it's still a dramatically bad situation that we're in right now. And these businesses are still worried about making their tax payments, still worried about making their rent payments. And if those businesses decide at some point, we just can't open up and operate profitably, then maybe they just have to close, which is the really big concern that Chinatown might look completely different if these businesses ultimately go belly up, and the landlords maybe some of them with them as well.

KRISTIN MYERS: All right. Brian Cheung, thank you so much.