Coronavirus Q&A: Greenspoon Marder's Hospitality Chair

By Nathan Hale
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Law360 (March 19, 2021, 6:38 PM EDT) -- The one-year anniversary of the coronavirus pandemic this month overlapped with another major annual marker for South Florida — spring break.

Louis J. Terminello

For the region's hospitality industry, a leading driver of the economy and a sector as hard hit as any by the global health crisis, this year's edition provides a key test of the mindset of the public and a chance to assess government efforts to curb the spread of COVID-19 and keep businesses afloat.

Louis J. Terminello, the Miami-based chair of the hospitality, alcohol and leisure industry group at Greenspoon Marder LLP, recently spoke with Law360 about his work with hotels, restaurants, bars and nightclubs throughout Florida that have been impacted by the pandemic, an event unlike any he's seen during his 40 years in the business.

Here's what he had to say about where Florida's hospitality industry stands, what has worked and what hasn't during the pandemic, and what is needed to help businesses recover.

One year into the pandemic, where would you say we stand right now in Florida in terms of the impact on the hospitality industry and any recovery?

Up until just before spring break, most of the hotels that I've talked to were still below their break-even threshold but were gaining, which was a good sign.

If you're talking about South Florida, spring break has really accelerated that comeback. I've been on South Beach a few times in the last two weeks, and it's gridlock. You can't walk. Every hotel is jammed. It's wonderful.

Switching to the restaurants, they're just as jammed. I don't like to mention names of places in particular, but I had to pull every string I had to get into [just-opened New York transplant] Carbone. They allege they have a three-month waiting period.

We're waiting to see now what happens after spring break, if this evens off and we have the steady uptick that we're hoping for.

On the nightlife side — which by the way, I think, generates a lot of hotel and restaurant business — we're eagerly anticipating the end of this misguided midnight curfew [in Miami-Dade County]. I hope that Mayor [Daniella Levine] Cava sees fit to lift it on April 5, as she's announced. We can't afford any setbacks.

Everybody is looking forward to and making plans for reopenings of venues and for retooling of venues in anticipation of the curfew being lifted April 5.

But it's very important that venues remain COVID-protocol compliant. We don't want to be superspreaders. We don't want to be spreaders at all, even minimal spreaders. And that's why the curfew was so misguided, because it assumed that you were OK at 11:55 p.m. but not at 12:05 a.m.

The Florida Legislature is in session this month and next. Are there any bills you're following closely that address the pandemic and hospitality?

Senate Bill 148, which would allow restaurants to continue selling alcohol to go [as authorized under one of the governor's emergency orders]. It's just not well-thought-out, and I don't think it's good for the industry. It's going to diminish the value of a big segment of the alcohol-intense industry in Florida.

First of all, it's going to be an increased taxation on the regulatory agencies when you have alcohol walking out of the doors of restaurants, which are generally not as attuned to the age limitations as bars and nightclubs would be.

But more importantly, it's going to have a fiscal impact on a large segment of the alcohol industry. I think the sponsor is well-intended and thinks that this is going to generate recovery business for restaurants, but there are unintended consequences to the industry as a whole, which I don't think have been taken into consideration.

Months ago, it was important to the struggling restaurant industry to include alcohol in its food-to-go orders when they were only open for pickup or delivery. Those days are either over or are going to be over very soon. And it's never a good idea to have knee-jerk legislation to purportedly cure an immediate, temporary problem, because that legislation stays with you forever.

What are some other steps the state has taken during the past year that were significant to the hospitality industry? What worked well or didn't work so well?

Thankfully, we saw zoning authorities — cities and counties, the government agencies that regulate — have been and hopefully will continue to be a lot more flexible on outdoor seating arrangements and configurations, as they were during the height of the COVID restrictions.

That's a great benefit that should continue. Florida is a hospitality state. People like to be outside. The weather is great, in my view, 10 months of the year — I'm not an outdoor diner here in August and September, but I am the rest of the year.

As we're building out new restaurants and configuring restaurants today, outdoor seating or semi-outdoor seating — with a solid roof and open bay windows and things like that — every new build-out is trying to fit in its share of outdoor seating today, because I think we discovered a rough jewel out there. People just like to be outdoors.

Do you think municipalities are open to continuing that? And do you think there might be a residual feeling that consumers want that because of the pandemic?

Well, it started as a result of the pandemic when restaurants were allowed to start the reopening process using outdoor only, but I think it's just an idea that caught on.

Let's face it, if you're here from snowy Michigan in January, you want to eat outside on Ocean Drive or in downtown Miami or whatever the case may be. And I think we're clearly seeing building officials and code enforcement personnel being a lot more flexible with the outdoor seating, which is a good thing.

Unfortunately, some of the procedures for securing outdoor seating can be a little convoluted and expensive, just the whole permitting process. I could name municipalities, but then they'll hate me, so I won't. But some are clearly worse than others. As this goes along, and there's an opportunity to revise these procedures, it appears like the municipalities that are most egregious are understanding that and are willing to work with us and be flexible with an eye toward changing the requirements and making it an easier process.

Going back to the hotels, safety and the cleanliness is the prominent reason why people are willing to travel again and stay in hotels.

In our post-COVID world — the "new normal," as people like to call it — I think we're going to see our hotel experience a little bit differently, at least for the next few years. It's going to take a solid two years for the hotel industry to go back to where it was and to move forward, and I think they have to continue to maintain their policies as to cleanliness and COVID protocols in order to get there.

I mean, I see people all the time before they're booking a hotel go online and review what their health and safety precautions and protocols are. I never did that before, but I see that happening right now where people are picking hotels based on that warm and cuddly feeling that they're going to protect them.

You talked about Miami-Dade County's curfew as an initiative you thought was misguided. Were there any other steps that governments took, either with an eye on safety or even a goal of helping to prop up businesses, that ended up not helping?

As we went along, we were certainly lucky and certainly found encouraging the business-friendly attitudes that we were seeing in Florida as opposed to our clients in California and other places.

Taking politics out of it for a minute, and zeroing in solely on the hospitality clients, they much prefer to be in Florida than in LA.

I don't want to go back and criticize anybody for doing what we have to believe they did well-intended, but I think Florida emerged as a model for dealing with business and the business openings and reasonable business restrictions — all except the curfew in Miami, which was just wrong from day one.

What the Miami and the Miami-Dade County mayors should have done was to beef up enforcement of COVID precautions at nightlife venues by closing the venues down that were not being compliant.

That's what they should have done, not impose this arbitrary curfew, which just makes no sense at all.

Do you think they didn't do enough with enforcement?

One of the concerns that I kept hearing and saw for myself was the legitimate nightlife operators, who were doing everything within their power to meet all of the standards, were really agitated by those few venues that ignored them and gave the nightlife industry a bad name.

It wasn't hard to figure it out. All they needed to do was look on social media or radio advertising, and they could have known which ones were not abiding by the curfew. And a mere glance would have told you which ones were not abiding by the COVID protocols.

Instead of sending troops at 12:01 a.m. to stand outside of nightlife venues to make sure that they were closed, I think those resources would have been better utilized by identifying the repeat offenders and the most blatant offenders and shutting them down so as to not give nightlife a black eye.

Other than that, following Gov. [Ron] DeSantis' lead, Florida emerged as a leader in dealing with COVID and businesses and a model for the rest of the states.

The result is downtown New York City is a ghost town today. I have an office in New York City and just gazing down at Midtown from the office windows, it's a sickening sight.

Looking forward, are there other steps that your clients feel are important that they need help with or would just be good steps for the government to take?

I think the prevailing attitude here in South Florida is let's just eliminate whatever restrictions remain, let assistance flow where appropriate, such as the different loans and grants, let's get the vaccine in everybody's arm, and let's just move on.

How do you think the vaccine rollout has gone in terms of the hospitality industry in Florida, which hasn't opened up eligibility to "front-line" workers in the commercial sector as some other states have?

At the beginning of the vaccine rollout, somebody had to prioritize, and in our state, we chose health care and the elderly as opposed to what we refer to as "essential workers" or restaurant workers. I can't criticize that decision. It's not my job to have made it, and I don't criticize it, but again, as the rollout continues, more and more people are getting vaccinated, so it becomes more and more of a moot point.

I expect very soon — certainly it's everybody's aspirational expectations — that there'll be a needle in everybody's arm by the summertime.

Was there frustration or any efforts among your clients to push for more worker eligibility?

Sure, there was frustration because everybody wanted to get back to whatever the new normal was going to be as soon as possible, but whether or not that was the right or wrong decision to prioritize in that manner, again, it's ancient history now. Let's move forward and get a needle in everybody's arm and just put this behind us.

I don't want this to sound like they were doing something wrong, but everybody was looking out for their own self-interest. I wanted a COVID vaccination, but I had to wait until I was eligible.

Looking closer to home, what has the past year been like for your practice?

Within our group, we have been re-energized. We were moving very slowly in the hospitality field, as far as new deals, new openings, new transactions during the height of the pandemic. But all that's changing now as of right after the first of the year. We saw a very substantial resurgence here in South Florida. New York is still behind. We haven't seen that that kick in [there] yet.

Hopefully that'll kick in. But we're busy now, we're really busy. And that's a good feeling.

What we were focusing on during the height of the pandemic was less deals, less transactions, but we were trying to protect our tenants and trying to modify leases and financial obligations all around. We were helping them with loan and grant monies from the federal government down — the PPP money, the SBA, the Metro-Dade loans.

We were more holding hands and being conciliatory and trying to keep them afloat than we were with new plans and new endeavors and new transactions.

That doesn't pay as well. It doesn't pay at all. So, we had challenges during the year, fiscal challenges. But we're clearly turning that around now. It's all good now. It's all getting better.

--Editing by Aaron Pelc.

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