Full Transcript:
Roy: Good afternoon, Roy Oppenheim here. How are you? This is our 21st…I said last week was our 21st but this is our 21st “Zoom at Noon,” sponsored by both our law firm and our title company, Oppenheim Law and Weston Title. And I wanna thank everyone who’s always helpful and participating in these events. This particular week, we’re gonna be talking about, of course, the weekly economic update, our pandemic update, and of course, we’ll be talking about COVID-19. Is it safe and social? How do we manage those two diametrically opposed issues and we have a wonderful special guest I’ll be introducing shortly. For those of you who are new with this, this is an interactive process, we ask you to ask questions. The topics themselves are interactive, for example, this week was requested by some of our folks to talk about, you know, how do we actually try and go out at night and do the things that are fun at the same time? Stay safe, and what are the legal implications with all of that?
Our firm went through the last economic crisis. We were founded in 1989, both by my wife, Ellen Pilelsky, and myself. And we’ve been around for over 30 years. And, next page. Thank you. And I wanna now introduce my team that was gonna just do a minute ago. Besides myself and Ellen, as I mentioned, Jeff Sherman, my partner, Mia Singh, our senior associate, Paola Vergara who’s of counsel and helps prepare these presentations. And Sarah Spurlock who I’d like to tell you a little about her because she’s absolutely fascinating. Sarah has worked with the City of Fort Lauderdale since January of 2018. She’s a nighttime economy manager. She serves as a liaison between the city and the hospitality and nightlife industry in Fort Lauderdale. The night office promotes social order, safety, and enhanced service provisions to all those who work, play, and live after 5:00 p.m., which means, of course, trying to create as much cultural activity in the city and in the community as possible. And Sarah has worked in local government for over 20 years. Can we just put Sarah on for a second so Sarah can say hello to everyone? Is that possible? Let’s see. Sarah, are you there?
Sarah: I’m here, can you…? I guess you can’t see me.
Roy: Yeah, we can see you, great. Thank you so much for joining us. It should be a really fascinating discussion, and I even saw on the “Sun-Sentinel” this morning, there’s a front-page story about what we’re talking about today. So, we couldn’t have been more timely. Last week, Sarah, we talked about the consequences of COVID-19 on real estate, specifically, its impact that we’re gonna have on the impeding foreclosure and eviction crisis. And the question isn’t if there’s gonna be a foreclosure eviction crisis, the only question is, when is that crisis gonna occur? How is it gonna manifest itself? And we talked about last week that it looks like there’ll first be an eviction crisis, which will almost, like, create a domino effect into a foreclosure crisis. And when that happens and how that happens will be soon for us to all figure out. This week, however, we’re gonna be talking about with you how to be safe and social during the pandemic. Next slide, please. The weekly economic update.
For those of you who do get “The New York Times,” this was a quite remarkable headline. As we can see from the chart, the gross domestic product literally fell by 30-some-odd pages. Can we go to the next slide, please? And we can see in-depth a little bit. We can see here what how the GDP, or GNP has worked over…actually, the GDP has evolved over the years and the red is obviously the down. The good news is there has been more ups than downs over the past 50 years, 70 years, but the reality is, we’ve never seen a decline like we’re currently suffering in the history of this country or any civilized country in the world. So, this is a remarkable decline in one quarter. I wanna remind everyone that this is interactive. If there are questions that come to mind, please ask them as we go through the slides, and we’ll get back to them.
This is a fascinating site, we’re seeing that the personal income actually has grown by over 5% through the government bailout and the economic stimulus packages while the gross domestic product has dropped. And we’ve never seen such a disparate view of the red line going down and the blue line going up right here if we can…so there you go. It’s quite remarkable. Even during ’08 crisis, we saw the two actually go in tandem. And here that’s what’s so remarkable that this is an experiment, an economic and social experiment of trying to keep the economy afloat by just propping up personal income. The problem is, is that it cannot remain that way,and that the two are gonna converge probably back to where we were in ’08 and have a crisis of that type as we proceed. Next slide.
In terms of unemployment benefits, we’re seeing here that if we look at what the unemployment benefits are doing, they’re actually keeping income at around $800, $900 a month for the average person and that’s 100% benefit. If we dropped it to 70%, it drops to around $600, $700. And if we removed all benefits on the third slide, we’re seeing that income drops to around $250, $300 a week because so many people are unemployed right now. Next slide. Thank you.
Let’s go over the pandemic because this will relate both to the economics and to what Sarah is gonna be talking about. As we all know, Florida is still a hotspot, things have leveled off a little bit, the death rates have come down. The number of cases we’re not sure about because it’s we’re a week behind but there’s a suggestion that the cases have leveled off in part because of the curfews and part because of the closings of restaurants and bars. And of course, that’s the issue and then we’re seeing all the other states that also are having hotspots, including states that previously didn’t have issues and it’s spreading to rural areas also in the United States. Number of known cases is doubling every month in Florida. Hopefully, we’re gonna see a leveling off now. But there has been a remarkable increase over the past 90 days.
The good news is that there are a number of vaccines that are in the process of coming through, we’re not sure how effective they’re gonna be. There are 140 in pre-clinical trials and there are 18 and phase 1, there are 12 in phase 2, 6 in phase 3. And the one approved one I’m not very familiar with, but it’s only for limited use, but it’s the six that people are betting on and if you looked at the logos, you’ll be familiar with many of those names. There’s Moderna, then you have Cambridge, Oxford University as well as other folks that are intimately involved with this. Obviously, the current recommendations still remain about face masks, social distancing, constant handwashing. And now the new thing is also to cover your eyes and sometimes still wear gloves, and we’re gonna talk about that in the context of restaurants.
So Sarah, let’s get you onboard if we can. And let’s just go back one slide if we can. So Sarah, welcome aboard and thank you so much for joining us at our 21st “Zoom at Noon.” I heard you first, you know, on the local NPR affiliate, it was a great piece on your position and what you’re doing for the City of Fort Lauderdale. So first, just describe what your job really is. I thought that was fascinating.
Sarah: So, thank you for inviting me to this. And again, my name is Sarah Spurlock. I’m the City of Fort Lauderdale’s nighttime economy manager. That position was created after a study was done by a group called Responsible Hospitality Institute back in 2016. And part of their recommendation was to hire a nighttime economy manager and that would be a person that looks after the city at night. And this is a kind of a growing phenomenon. There’s 8 of us here in the United States, but there’s probably 40-ish, 50 positions like mine all around the world. The position started in Amsterdam, actually. And basically, it’s a focus and a realization, a recognition that just as much happens at night as happens during the day, especially in urban cities. And because we’re living in a 24-hour world now, it’s even more so. And folks, when they’re looking for someplace to live, when they’re looking for someplace to work, and they wanna be in an urban environment, they pay a lot of attention to what happens at night. That they have the amenities, that they’re able to walk around at night safely and do all kinds of things at night that they’ve only been able to do during the day traditionally. So, my…
Roy: And I’m just curious, why do you think the night promotes those kinds of activities? Maybe it’s a silly question but I’m curious since you’ve probably studied that.
Sarah: Well, people don’t just work 9 to 5 anymore. So, you have folks that work maybe 3 p.m. to midnight. You have folks that work in the graveyard shift. So, they’re looking for ways to be able to do their life, their day-to-day life, at any time of the day. Going to the dentist from the hours of 9 to 5 is not always a realistic possibility for a lot of folks. So, wouldn’t it be great if I could go to the dentist at 8? Wouldn’t it be great if I could go and buy a pair of jeans at 10:00 at night? Wouldn’t it be great if I could take my kid to the library after we eat dinner? So, there’s a lot happening at night. Mostly, it’s like that’s when creative things happen, music, art is especially lively at night. And those things are particularly important in an urban-type environment.
Roy: Right. So, from an anthropological perspective, what we’re saying is that the night promotes really the enrichment of cultural life in the community is what sounds like.
Sarah: Yes. Sociability, creativity, that has its primary base at night.
Roy: Very, very interesting. So, let’s talk about this headline today in the “Sun-Sentinel,” which talks about getting rid of the curfew but expanding code enforcement to make sure the restaurants are complying with their set hours as well as their social distancing rules. I mean, it seems like they’re almost like saying two different things. Sure, you can go out but you can’t go anywhere. So, let’s talk about that.
Sarah: Yeah, so what I have found when we first reopened back in May, the issue…we were having issues with some restaurants. They weren’t abiding by the rules. In the hospitality industry, when it is your nature to be hospitable and friendly and not to have to enforce things, it’s very difficult. So, we had a lot of issues right at the beginning with them abiding by the 50% rule, abiding by the mask rule, abiding by the social distancing role. So, after a few weeks of this and a tremendous spike in cases, we cracked down on our enforcement and we started shutting places down. And then the county implemented their fine policy that, you know, the second violation, you can be shut down for up to 4 days, you can be fined $15,000. And within a couple, few weeks, the hospitality industry really stepped up and got in line.
And now, in my opinion, the hospitality industry is not the issue. The issue is the vacation rentals and the after-hour parties. So, when you close the restaurants at 10, they still want someplace to go. Folks, especially young people, still want someplace to go. So, people are renting out vacation rentals and having big parties. So, there has been a definite shift in our enforcement. So, getting rid of the curfew, I think, might be useful because then we can keep folks at establishments, at venues where there’s more regulation, there’s more safeguards in place than at a vacation rental where there’s very little control.
Roy: But aren’t some of these venues still required to close by a certain time?
Sarah: Well, yes, under…right now, yes, the curfew is at 10, and you have to be home by 11. So yes, they have to have…all customers need to be out by 10.
Roy: Right. So, now without a curfew, they still have to be out by 10. But they can still go to a vacation rental after that or a parking lot.
Sarah: Yeah.
Roy: So, it’s gonna be tricky. But I understand from personal rights and from a legal perspective, we can’t have these constant curfews, telling people for extended periods of time that they can’t go out. I mean, there needs to be a compelling reason that we can exercise that compelling reason from a governmental perspective by saying, okay, we’re gonna narrow the times that the establishments are gonna be open. That doesn’t inhibit my constitutional, my legal rights to be able to travel freely. And so, I think there’s this balance between our legal rights and what the state is trying to achieve. And the state is trying too to get the COVID rate down, but we can get the rate down not by being as extreme and being more narrow in our focus. So, I think there’s a balance here and that people just don’t like the idea that they’re being told they have to stay home. It’s just not fair, it’s not right, it’s not constitutional. We have some questions, let’s start going through them. Does Sarah think that the protocols in place now will remain in the foreseeable future? Can she please explain those protocols?
Sarah: So again, I work for the City of Fort Lauderdale and the protocols are being put in place by Broward County. So, because I don’t have a crystal ball, I don’t know exactly what the county’s gonna be doing. But their mindset is that until the numbers go down, the protocols will stay in place. And those protocols are that everyone if you’re inside of a restaurant or a retail store or inside of any establishment, you need to be wearing a mask. You can take off your mask once you sit down at the table to eat. But if you’re going to go to the restroom, you need to put your mask back on to go to the restroom.
Roy: Let’s talk about a bar. So, how about a bar? I mean…
Sarah: You can’t go to a bar, our bars are closed.
Roy: Bars are closed.
Sarah: Yeah, South Florida’s like a different world from the rest of Florida. For some reason, we are the epicenter of the epicenter. And most of the cases are down here in West Palm, Fort Lauderdale, and Miami. So, we have much stricter rules than the rest of Florida.
Roy: Let me ask a silly question, someone had suggested, why don’t we just lower the decibel level that is permitted in terms of music so that people don’t have to speak so closely to each other to hear each other? Because if you have a high decibel level for music, by definition, you have to be close. Now, I know that may create a form of socialization but it also creates causes of the direct contact of the disease. And so, the loud noise, loud music is a direct relationship to the spread of the disease. And so, the question is, why aren’t we focusing on targeting those issues, you got to keep your noise up, you got to have better acoustics? If it’s too much people talking, you got to change your acoustics. I mean, I haven’t seen any of that.
Sarah: Yeah, I think that’s a very good point, actually. It would be more relevant in a bar situation. So, in my mind, when you’re going out to dinner, you’re going out to dinner with your folks. It’s your family, your friends, and you’re at a table and that’s really…you’re the only social group for the evening. If it’s going to pass between folks at your table, I think that’s gonna happen whether the music is loud or not. In a bar situation where you might be mingling and so you’re not just sticking with your group of people, but you’re going all over the place and you’re talking to people in the whole venue, then the loud music becomes more of an issue. Because then you’re not just spreading it in your own little group, you’re now potentially spreading it to everybody in the bar. But that’s a very good point.
Roy: We were talking earlier about what percentage of restaurants and bars are gonna likely make it, and what kinds of restaurants and bars will make it, and which ones are just aren’t going to. Can you go over those numbers? Because I thought they were staggering.
Sarah: Yeah. So, Yelp put out a report last week for the second quarter of 2020. Let me pull up those numbers. And for places…according to their status on Yelp, the places that are closed, for restaurants, permanent closures are at 60%, temporary closures at 40%. Shopping and retail 48% are permanently closed, 52% temporarily closed. Bars and nightlife, 45% are permanently closed, 55% are temporarily closed. Not every state has obviously the same closure protocols that we do. So, my guess is that our numbers…we’re more closed than other places so my guess would be that our numbers are higher for permanent closures.
Roy: You know, when we started the “Zoom at Noon,” we were talking about literally an existential event for small businesses, small restaurants and bars. And we were saying that around 50% or 60% would not make it and it seems that that’s exactly what’s happening. But what’s interesting is, what kinds of restaurants and bars are making it and which ones aren’t? I want you to focus a little bit on that because it’s very interesting.
Sarah: So, I believe that the restaurants…First of all, no one’s gonna be able to sustain themselves for a very, very long term. So, there needs to be some level of opening. However, there can’t be any level of opening and we can’t increase the level of opening until the number of cases get down, go down. So, in my opinion, the places, the restaurants that are going to do well, and the bars when they are able to open, that are going to do better than others are the ones that are willing to adapt and the ones that have the resources. So, the neighborhood bars were probably not doing very well pre-pandemic. So, they’re really suffering now. So, they’re close to closing if they haven’t already closed. Those places that have kept up with the times, folks are not just looking for a place to drink, to get drunk, and to pick somebody up. They’re looking for an experience. And actually, statistics show that the younger crowd are not drinking as much as they were in perhaps my generation.
So, just going out and getting drunk is no longer a thing. There has to be something else to do, there has to be an experience. So, places that are offering that experience, Fort Lauderdale isn’t real big on those. But we have a few, you know, you have the ax-throwing, or the game rooms, or the paint and sips. So, you’re doing something besides drinking, you’re socializing. I think they’re going to do better with a pandemic or not, without a pandemic. The places that have said, “Okay, I accept that there’s a pandemic, I accept that I need to make some changes in my business model moving forward,” they’re going to do better than the places that are saying, “You know what, I’m just going to wait until things get better, and then just reopen what I’ve had for the last 20 years.” Those places are not going to do as well in my opinion.
Roy: And no question the folks who I’ve been able to adapt in any business seem to be doing better than people who thought this was only gonna be a several-week event, you know, were unfortunately misguided. Fortunately, the people who’ve been watching “Zoom at Noon” had the advice to know that they were gonna have to adapt or perish. And so, we’ve had lots of folks who aren’t even on today because they’re out doing their thing. And we used to have an hour-long presentation. Now, it’s a half-hour because people are, in fact, out trying to do stuff. The other folks, and I think you mentioned that, you said those who have the resources, in my opinion, you’re gonna see a lot more large chains and less fine dining like you talked about. And that those large chains, they have access to capital, they have access to SBAs, they have access to the Federal Reserve, Main Street Loan Program, they have access, they issue junk bonds that the Federal Reserve seems to be buying. Small businesses just don’t have the ability, the resources, and access to that kind of stuff. It seems like the playing field is remarkably unfair, favoring really large gets larger, smaller perishes. What’s your thought on that?
Sarah: Yeah, it’s been heartbreaking and really unfortunate to hear this because that’s exactly what’s happening. Again, the small neighborhood bars, it’s the owner, who’s also the manager, who’s also the head bartender. And then he or she has a handful of loyal employees. They might have somebody that, you know, does their audit at the end of the year or pays their bills, but somebody to help navigate through that PPP paperwork, the SBA loans, they just don’t have those resources. And so yeah, it has been unfair for them. They’re definitely at a disadvantage.
Roy: We, in fact, represent a few small restaurants and have worked with their landlords and worked with their bankruptcy counsel and we’ve worked with them going through the bankruptcy process. And to some extent, sometimes the answer, and you and I talked about this, is for them to throw in the cards, get in the suit, file that bankruptcy. And then when the smoke clears, come out like a phoenix and re-emerge stronger and better than before. And maybe sometimes just hanging on isn’t necessarily the best answer.
Sarah: Right. And unfortunately, a lot of business owners don’t necessarily have the business acumen to weather through this kind of storm.
Roy: I have a slide here and we don’t have to go into detail, but it just shows you the ventilation systems of indoor restaurants and why bars are so challenging and how, you know, the virus can spread in a small area based on the ventilation system. Is the City of Fort Lauderdale looking at UV lighting as a requirement or trying to provide grants to folks so they can work on their ventilation systems or bring in more fresh air into the ventilation systems? Because, you know, it’s interesting, airplanes, people flying on airplanes, you know, they’re not getting sick on airplanes because the airplanes bring in fresh air constantly. Yet the nursing home and a cruise line doesn’t do that. And so, we’re starting to see what kinds of indoor air are bad and what kinds of indoor air are not bad. But bars kind of are like nursing homes and cruise lines right now.
Sarah: Yeah. So, the city has not delved into that kind of detail. I feel like that’s maybe a little bit crossing the line between the government getting involved in private enterprise. But the hospitality industry has come out with some amazing protocols and best practices for this. And, in my mind, they’re way ahead of anything a bunch of bureaucrats in the government could come up with. So, again, it’s a willingness to say, “Okay, this is the way it’s gonna be for a while. So, we need to adapt by doing this, this, and this.” And in a bar situation, like you said, it’s particularly challenging. And the way I see it, bars are going to have to figure out how to put everybody in their place and have a place for everybody like you do in a restaurant.
So, mingling is just not gonna happen for several months, for many months until we get a vaccine. We can’t have situations where there is mingling, we can’t have situations where you’re leaning over a bar and congregating in a bar. So, the bars almost need to be set up like restaurants, or they do need to be set up like restaurants. Everybody has a table, everybody has a chair, and everybody has a server. So, that’s really gonna be the first step. Well, that’s probably the second step. The first step is being able to do more of this outdoors. So, I think once this summer heat goes away, we’re into fall, we’re in October, November, December and we can have more outdoor opportunities in controlled contained areas, I think that’s going to be the first step.
Roy: And the city’s gonna be very adaptive about closing streets and creating extensions for these restaurants for public space, I understand, right?
Sarah: I certainly hope so. We are doing it now to a limited degree. On Las Olas, we’ve closed the lanes going…one lane in either direction. And then when the beach has been closed, we’ve also closed down A1A. So, that just allows more pedestrian activity. We haven’t had so much an expansion of outdoor seating, although I hope that’s where we head, but there’s other ramifications to having more outdoor activity. You have more noise, you have businesses occupying space that doesn’t necessarily belong to them. So, I hope that the city, we are able to come up with ways to maybe use parking spaces, or parklets, or even park space to accommodate some additional outdoor social activities when the numbers are where they need to be.
Roy: So, Sarah, we’re talking about that, right now, if you look at this chart, right now, indoor seating is at 50% for restaurants, and previously it was 25%. But you were telling me that the reality is most of these restaurants aren’t even at 50% because people aren’t coming out. Is that right?
Sarah: Yeah, realistically, since the July 4th weekend, it’s been pretty dismal. Yeah, they’re allowed…we never were at 25%. We started right at 50% in Broward County. And at first, it was going really well and then the cases just went through the roof and July was just a horrible month for most of these restaurants.
Roy: This is a cute picture I just wanted to show you about the new way to social distance. And then you turn me on to this. I know you found this, you saw an article in “Time Magazine” about some new futuristic types of outfits that people may wear, there’s another picture too if you go the next one. And I just wanted to know your thoughts about these new partying outfits.
Sarah: Yeah, you know, it’s an interesting concept. Basically, it allows folks to engage in nightclub and bar activity as they did pre-pandemic. So, you’re still able to get in each other’s faces, you’re still able to dance with one another, you’re still able to mingle and socialize as you were before. I honestly can’t see anybody wearing this stuff but, you know, it’s an option.
Roy: I’m gonna take one question and then we’re gonna have to call it quits right here. How can you police private parties? Is it legally enforceable, I guess is the question?
Sarah: And that is really the tough question. So, the county came out with rules about private parties in people’s houses, but it is not possible to enforce. So…
Roy: Unless it’s a noise issue, unless it’s a noise issue, right?
Sarah: Yes. So, we have normal laws that govern activity, but going into someone’s home that’s having a dinner party is probably not something that our law enforcement or code is going to do.
Roy: And we, you know, we’re just not a totalitarian society. And so, I know those societies have done better with controlling this, but we will have to continue to balance our legal and constitutional rights with that of the greater good of society. And that’s gonna be the challenge. And it’s remarkable that the City of Fort Lauderdale has someone like you, Sarah, that’s trying to balance those two things. And I think it’s wonderful that you’re doing this and that you are a repository of this kind of conflict that we’re trying to deal with right now. On the one hand, trying to keep these places open, and the other hand, trying to keep the community safe. And I wish you well, I think it’s an impossible job and I’m glad that you’re doing it, not me. On that note, I wanna thank you, Sarah. Sarah Spurlock from the City of Fort Lauderdale in charge of nightlife at the City of Fort Lauderdale.
Again, I wanna thank the law firm, Oppenheim Law, our title company, Weston Title. We’re here, we’re open, we’re virtual, we’re a hybrid model, we adapted immediately. And I encourage all of you who haven’t done so to just get in the suit and just adapt because that is the only way we’re gonna survive as a species. And so, I will see all of you next week at “Zoom at Noon.” Sarah, thank you again. And everyone, have a great week. “Zoom at Noon,” Roy Oppenheim, thank you so much. Take care, Sarah. Bye-bye.
Sarah: All right, thanks.