Brooklyn Businesses That Have Survived Pandemic Seek New PPP Loans

The Garage, which specializes in shooting TV commercials for food and beverage companies, has seen business bounce back since the economy reopened. But it has not booked a single job for January.

Sahadi Fine Foods, a wholesale and retail imported food business, is once again bustling with customers at its stores in Industry City and on Atlantic Avenue in Brooklyn. But its restaurant clients are having trouble paying their bills and 10% of them closed permanently even before the recent suspension of limited indoor dining.

Christophe Pourny Studio, an antique refurbishing company that also sells natural furniture repair products, is once again restoring furniture as many well-off New Yorkers decide to remodel their homes. But like The Garage, its list of upcoming projects is short as New Yorkers gird for a winter worsening of the coronavirus crisis.

Gov. Andrew Cuomo and Mayor Bill de Blasio this week both said a lockdown of the in-person economy seems likely, with the mayor putting its start at just after Christmas.

Meanwhile, Congress has yet to pass another federal aid bill, which could include hundreds of millions of dollars in new Paycheck Protection Program loans that all three companies say would be vital to getting through another round of severe restrictions on economic activity.

Ben Fractenberg/THE CITY

THE CITY talked to the operators of the companies, all with bases at Industry City in Sunset Park, to assess how they have survived the pandemic recession that has devastated the economy, how they will cope with another shutdown and what help they need.

“The ups and downs of navigating ups and downs is extraordinary,” said Pat Whelan, managing director of Sahadi’s. “We are almost in a day-to-day thought process.”

The business operators also know that many people have it far worse — while others are thriving.

“Most of our customers have never spent this much time in their homes and now they have decided to do projects,” said Jason Jobson, co-owner of Christophe Pourny Studio, explaining the revival of his business. “We feel fortunate and it’s a little bizarre when so many people are struggling.”

In all, about half of Industry City’s 550 tenants have returned to their offices, factories and workshops, said the complex’s CEO, Andrew Kimball. The sprawling collection of former industrial buildings, which also houses food and retail outlets, attracts about 10,000 visitors on weekends, despite the pandemic.

Taking a Chance on Expansion

At the start of the year, business was booming at The Garage, which has been based on West 36th Street in Manhattan for 15 years.

The company decided it needed more space to expand its staff and launch two new businesses — one called Garage Education to provide training for the kind of highly technical video work it does and one called Garage Rentals to rent out the additional three $500,000 robots it planned to buy as part of the expansion plan. The robots move cameras at high speed and with precision.

The company eventually inked a lease at Industry City, where it is currently building out its space.

But when the shutdown came in March, every one of the jobs The Garage had lined up was cancelled and work came to a screeching halt. A PPP loan of $215,000 allowed owner Steve Giralt to keep on all five of his employees and pay the rent. But the freelancers he uses on shoots don’t get paid when The Garage doesn’t have work.

Ben Fractenberg/THE CITY

Because of its strong first quarter, The Garage’s revenues will be up slightly this year. Giralt spent this week working 12-hour shifts shooting a commercial at his Manhattan location, with every member of the crew getting tested for COVID-19 at the start of each day. A single case and the ensuing quarantine would close the company down again.

“The pandemic is still affecting our business because traveling for assignments isn’t worthwhile and some clients are trying to pay their bills and not spend money on advertising,” Giralt said.

If there is another shutdown, he’ll need a PPP loan to keep his staff paid and continue his expansion plans.

“It will help me not be scared about hiring on new people, not knowing what’s coming,” he added.

Furloughs Feared

One week before Cuomo ordered all non-essential businesses to close in the spring, Jobson and his partner Christophe Pourny closed their studio in the makers’ section of Industry City.

“We were concerned, especially about our employees taking the subway,” Jobson said. Soon all the work they were doing had shut down as well.

A PPP loan of $50,000 allowed him to pay rent and payroll.

Business started trickling back in June before taking off and returning to pre-pandemic levels.

Ben Fractenberg/THE CITY

“Most wealthy people travel and have two, maybe three, homes,” he said. “These people have never spent this much time in their homes and now they have decided to do projects.”

Interior designers, the company’s major source of business, have never been busier, Jobson added.

The Studio also sells a line of all-natural furniture products through 300 stores across the country. The business has done well as those stores focus on online sales and customers of a much wider economic spectrum spend time sprucing up their homes.

Yet as with The Garage, the outlook for next year remains uncertain because no one knows what actions government officials will take to contain the latest surge in coronavirus cases.

“Another shutdown will be very difficult,” Jobson said. “We will probably have to furlough our workers.”

Paying his bills will depend on another PPP loan.

A Bill Balancing Act

This week, Whelan of Sahadi’s sat down with his controller to review a restaurant-chain client whose unpaid balance had increased to $60,000 from $40,000 after reopening during the summer. With another shutdown looming, he’s worried he could be stuck with the entire amount if the chain can’t survive the latest restrictions on dining.

“We told them they would have to consolidate their deliveries into fewer drops,” he said, “and they have to work that balance down.”

Ben Fractenberg/THE CITY

Whelan’s suppliers seem worried too. He recently received two emails from one seeking payment for a bill. He had to call them to say that not only was he fully paid up, but the amount they were asking wasn’t due for another 10 days.

The pandemic has proved the most difficult period in the 30 years that Whelan has worked at the family-owned firm. He said his warehouse, where workers roast nuts and spices and package imported food, loses money because it is no longer able to compete with lower-cost operations outside of New York.

He has been working to reposition the company with the new 8,500-square-foot store in Industry City, designed as the prototype of a group of similar outlets planned around the city to showcase his company’s products and other specialty foods.

An Unprecedented Turnover

Whelan recently rearranged the Industry City store so workers could move tables that had been outside indoors with the beginning of winter. He finished doing that last week.

“Then they shut down indoor dining,” he noted.

The company collected some $800,000 in three PPP loans to keep operations running through the turmoil.

Whelan believes another lockdown could pare his restaurant clients by another 20%. Asked about the future he said simply, “Ask me again in two weeks after I look at the year-end results.”

Kimball is confident that Industry City and its tenants will survive. Since March, the complex has signed leases totaling 500,000 square feet. In addition to The Garage, coming to the complex are Union Square Ventures, a major venture capital firm, and Cowtan and Tout, which took 25,000 feet for a home goods and fabric showroom, warehouse and offices.

In all, 75% of the complex will be leased by year end, the highest yet under current ownership.

Courtesy of Sahadi’s

Still, signs of how the pandemic has upended business abound, including at Sahadi’s: Each year, the company hangs the names of all employees on a small Christmas tree in the office lobby. This year, half the names are new, representing unprecedented turnover.

“We have never seen that in 30 years,” Whelan said.