N.Y.C. Clubs Are Packed, but Many Are Still in Debt

Inside Good Room, a nightclub in Greenpoint, Brooklyn, people were dancing to techno, sweating off their makeup and mingling with strangers, while outside, rain poured down on a line of partygoers that snaked down the block. It was Friday night and, as on most recent weekends, the event was sold out; things almost seemed normal.

“It’s nice to know places like this still exist,” said Caitlin Widener, 33, as she stood near the bar inside, reflecting on what she had missed about Good Room while it was closed for nearly 18 months because of the pandemic.

Things may be somewhat back to normal for its patrons, but the club, which reopened in September, is struggling. Its managers, thrilled with the revived business, still must pay 18 months of back rent, maintenance and reopening costs, all of which total about $500,000, said Josh Houtkin, Good Room’s booking director.

“It’s such a labor of love,” he said. “I would have never imagined that it would go this way, from the support to the positivity to just how happy people are to be out.”

Good Room is not alone in its predicament. Many New York City clubs that survived the pandemic are seeing large crowds now but are still plagued by debt and uncertain futures. Many have had to turn to holding fund-raisers (sometimes generously hosted by competing clubs with outdoor spaces) or to rethinking their business models, while others have shut down entirely.

“This industry is crucial to our economic and cultural well-being,” said Ariel Palitz, the senior executive director of New York City’s Office of Nightlife. “It is our backbone of the city, and without its recovery, the city can’t recover either.”

In a study published in 2019, the Office of Nightlife examined the economic impact of the local industry in 2016, the most recent year data was available. Across all five boroughs, the report found, nightlife produced nearly 300,000 jobs and over $35 billion in total economic output.

But few government grants have been available for clubs and bars. One such lifeline was the Shuttered Venue Operators Grant, administered by the Small Business Administration’s Office of Disaster Assistance. Shuttered grants worth more than $1.3 billion were distributed to nearly 900 recipients across New York City. However, Good Room’s application and appeal were denied (applications are no longer being accepted).

Its managers cannot explain why Good Room was passed over, nor were they given a reason.“I sent literally hundreds of pages of text documentation and photos,” Mr. Houtkin said. “We walked them through our entire process of booking someone to selling tickets to having them perform.”

Trans-Pecos, an avant-garde music venue in Ridgewood, Queens, did receive a Shuttered grant. But even with that funding and a booming business now, both indoors and outdoors, the club still owes about 14 months of back rent, said Todd Patrick, its founder and executive director. “We’re trying to negotiate with our property owners to try to reduce some of the burden, but it’s a huge amount,” he said.

Since Trans-Pecos has a large outdoor space, it was able to partly reopen in the summer of 2020, much earlier than many other nightlife spots. It even held fund-raisers in its backyard for other clubs, including Our Wicked Lady and Baby’s All Right, both in Brooklyn.

Over the past 18 months, it became common for venues to offer this sort of support. “It’s a very close-knit community,” Mr. Houtkin said. “Everyone asks each other for advice; if anyone needs help, we try to help each other.”

“Everyone was almost forced to have to work together, there was no other option, to understand every new rule, new law,” said Sophia Sempepos, a Good Room manager. “Everyone was communicating about what procedures they were taking,” she continued. “People were giving each other liquor to help restock.”

Public Records, a music and performance space in Gowanus, Brooklyn, managed to get through the pandemic by changing its business model, which also helped qualify it for several grants.

“When we first started Public Records in 2019, it was really a music and culture space with a great bar,” said Francis Harris, a co-founder. But in August 2020, the venue reopened as a garden restaurant, which became a crucial driver of revenue and allowed the business to keep many of its employees on board. “We always wanted the beverage program and the food program to be on the same level as the music and cultural programming, and the pandemic sort of allowed us to rebuild it from scratch,” Mr. Harris added.

Some clubs faced bleaker fates. China Chalet, a dim sum spot by day and glamorous party destination by night in the Financial District, announced its permanent closing last year. Even if the club kids had returned, the business would not have been sustainable without the lunch and dinner crowds from nearby office towers, said Alexander Kellogg, a former nightlife consultant and liaison for China Chalet.

Beverly’s, an artist-run nightlife and exhibition space on Manhattan’s Lower East Side, closed its original location on Essex Street in July 2020. “Even prior to the pandemic, being a small venue meant operating on incredibly slim margins, if there was a margin at all,” said Leah Dixon, the director of Beverly’s. “So when the pandemic hit, we did not have any savings to get us through.”

After Beverly’s announced its closing on Instagram, a flood of people reached out with memories of nights spent there, Ms. Dixon said. She heard stories of “D.J.s that got their first D.J. gig at Beverly’s, so many artists talking about their exhibitions — it was just jaw-dropping,” she said. “I was like, OK, this isn’t going to end. Some way, somehow, this is going to continue.”

Beverly’s became a nonprofit and, as such, qualified for a grant from the Jacques Louis Vidal Charitable Foundation Fund, “which was enough to put a gust of wind in our sails to keep moving forward,” Ms. Dixon said. Beverly’s reopened this May on nearby Eldridge Street.

Though operations at the new location are certainly different — it’s open only on weekends now, and its recognizable neon pink sign is no longer visible from the street (it’s now inside in the back) — Ms. Dixon remains hopeful that it can still bring people together. “We very much learned that Beverly’s was not about that specific space,” she said. “This isn’t about us anymore. This is about what the community needs us to be.”