Ducey delays evictions for businesses

Dillon Rosenblatt//April 6, 2020

Ducey delays evictions for businesses

Dillon Rosenblatt//April 6, 2020

Gov. Doug Ducey issued an executive order today that would halt evictions until May 31 for small businesses and nonprofits unable to pay rent due to the COVID-19 pandemic.

The order is similar in tone to Ducey’s order barring evictions for residential areas. It also encourages commercial landlords to defer rent payments for tenants and considers waiving all fees and interest associated with late payments.

The coronavirus was gutting small businesses in Arizona and beyond, and one local chef was trying her best to make sure the restaurant industry was able to remain intact for as long as possible.

Danielle Leoni
Danielle Leoni

Danielle Leoni, who co-owns The Breadfruit & Rum Bar in downtown Phoenix, has been hit hard from COVID-19. Her restaurant was one of the first ones to close due to the unsustainable nature of take-out or drive-thru-only operations under one of Ducey’s executive orders to prevent spread of the virus.

Leoni took it upon herself to help form a small restaurant coalition with its main goal to bar evictions for restaurant owners in the state. She said there are now more than 1,200 restaurants who are part of the group and they kept trying to get a response from Ducey or his staff to lend a helping hand. Legendary spots like Durant’s and Chicago Hamburger Company are some of the restaurants to hop on board.

“I’m not asking [Ducey] for money, I’m just asking him to not cost me more money. That has been our angle,” she said.

Leoni and the coalition got their wish today.

“This order helps ensure no small business or nonprofit will face eviction due to COVID-19 and that landlords and small businesses work in partnership to make sure we get through this emergency together,” Ducey said in a statement.

Leoni and other restaurant owners have obviously taken a financial hit, but still have to pay rent for the buildings that house those restaurants and they still have to pay for their transaction privilege tax, which can add up especially when the restaurant is no longer operating. The amount due for February sales was supposed to be paid before the end of March, but Leoni said she used her TPT money to pay her staff instead.

“I know that I owe that money. And it’s not my money, it’s owed to the state, I get it. We don’t have that money today, and we want to pay that. But it’s gonna be harder for us to pay it if [Ducey’s] going to pile on,” Leoni told Arizona Capitol Times last week.

Dan Bogart, the Arizona Restaurant Association’s COO, said the tax is due each month, but how it works is by paying the tax on the previous month’s sales.

“One of the first things we asked for was a delay in these dates,” he said. “We did not get that so a bunch of restaurants missed their deadline and we’re now working to get late fees and penalties waived.”

Leoni said they’ve been using the Twitter hashtag “hit pause” to halt the payments right now so these businesses have a chance to survive.

“Not all of us, but a lot of us are facing commercial eviction,” she said on April 1.

Restaurants are sometimes given a three-day grace period for rent and other payments, she said, and April 3 was their “do or die day.”

Leoni rents two properties, the brick-and-mortar restaurant, where the landlord is working with her and will not evict her. She also has a warehouse that stores expensive equipment where she says that the landlord would not work with her at all.

“If you don’t pay then there’s fines assessed,” Leoni said about that landlord. “And if you don’t pay that then we go to the eviction process.”

Leoni’s request for the governor for roughly two weeks had been consistent — give the businesses an eviction moratorium similar to the one for residential areas.

“People need homes to stay safe, but if our businesses don’t have homes so we can stay safe then there’s not going to be an economy when the pandemic is over,” she said. “He’s going to kill small business.”

The Governor’s Office heard those demands and put this new order in place, to their delight.

Ducey had already taken some action prior to today based on requests from the coalition, but Leoni said it was something toward the bottom of their demands. On March 31 he issued an executive order deferring all liquor licenses and fees for bars and restaurants for 90 days.

“I’m glad that he addressed it, but he addressed one thing out of our list and it was the most minute, insignificant and least impactful of all of our asks,” she said.