4,000 Applications for Outdoor Dining. 39 Licenses Issued.

During the worst of the coronavirus pandemic, desperate New York City restaurants found a financial lifeline by expanding seating outdoors. Dining sheds began popping up without much city oversight, somewhat haphazardly reshaping the city’s streets.

At outdoor dining’s peak, there were nearly 13,000 sheds outside restaurants — some costly and elaborate, others dingy huts that served as many rats as people. Most sat on the roadway in spaces where cars used to park.

While the al fresco dining options were popular with many New Yorkers, some complained about sheds becoming eyesores and oversized trash bins, and some politicians expressed concern about the sheds’ impact on street parking.

Last year, after wrangling involving the mayor, the City Council and the restaurant industry, the city ordered all the sheds to be taken down as it formalized a permanent outdoor dining program to begin this spring.

Some 4,000 applications have been submitted for roadway and sidewalk licenses. But as Grub Street first reported, many angry restaurant owners say they are stuck in a bureaucratic maze ahead of the busiest dining season. With the start just weeks away on April 1, only 39 licenses have been approved.

“Without roadway dining, I don’t want to continue in this business,” said Philip Guardione, the chef and owner of Piccola Cucina Osteria Siciliana. “You need outside dining, or you kill restaurants.”

Faced with such an extensive backlog, the Department of Transportation, which initially reviews and approves the applications, announced on Thursday that businesses could open their outdoor structures — on either the sidewalk or roadway — on April 1 without a license. As long as the restaurant had submitted a completed application and was following the program’s rules, it would not be subject to fines.

The backlog has angered the New York City comptroller, Brad Lander, whose office issues the licenses after the Department of Transportation reviews them. Mr. Lander said the program was important for the city’s finances, providing nearly $10 million in annual sales-tax revenue during the pandemic.

“Spring is almost here, and restaurants owners are running out of time to design new outdoor seating and obtain liquor licenses,” Mr. Lander, who is running for mayor, said in a statement. The Department of Transportation, he added, needed to speed up its work and “start sending their permits to this office.”

On Thursday, the Transportation Department said that staff members had finished reviewing more than a thousand applications for outdoor dining structures on roadways and expected to approve hundreds of them before April 1.

“We are proud that outdoor dining is now a permanent part of our city’s streetscape and have reviewed every roadway application we have received,” said Vincent Barone, the department spokesman. “As required by the law passed by the City Council, reviews are underway by community boards, council members and the comptroller. The comptroller should take up his concerns with the City Council.”

Even before the reprieve was announced on Thursday, some restaurants awaiting approval had planned to still open on April 1 despite the risk of fines. They are hiring additional staff and have already paid for the sheds to be designed and fabricated, which can cost tens of thousands of dollars.

Many restaurant owners were reluctant to speak openly about their frustrations with the city’s slow approval process, saying they did not want to jeopardize their applications.

They said that as the costs to operate restaurants soars — from personnel to food to rent — al fresco dining had become essential for survival, allowing them to expand their footprint, serve more customers and bring in more money.

Mr. Guardione said his payroll costs have jumped 50 percent since before the pandemic, while some produce has increased 40 percent. His 700-square-foot restaurant in SoHo must generate $7,000 to $8,000 in revenue every night to survive, he said.

Mathias Van Leyden, who owns the French restaurant Loulou in Manhattan’s Chelsea neighborhood, said he expected the city would sign off on his outdoor dining space before April 1.

“We spent a lot of money to do it,” said Mr. Van Leyden, whose restaurant had a shed made of reclaimed wood and colorful bouquets. “And it’s beautiful for the community.”

Under the bill the City Council passed in August 2023 to make outdoor dining permanent, sheds can only stay up from spring to early winter and must share basic design guidelines, including limitations on size, proximity to the street and the materials allowed.

Restaurants were required to submit their applications for the new outdoor dining program in August to the city’s Department of Transportation, which is overseeing outdoor dining on both sidewalks and roadways. About 3,000 restaurants applied.

While the department had said that final approval would then take about five or six months, it took the department several months just to read through them before the formal review could begin, several people involved in the process said. The department has hired more employees to handle all of them and is now nearly fully staffed.

Hundreds of applications have been sent back to restaurants because they were incomplete. The most common issue has been restaurants not providing full details on their site plans, which must include a drawing of the outdoor dining setup and identify its distance to nearby objects like mailboxes and fire hydrants.

But sign-off from the Department of Transportation is just one step in the lengthy process before a restaurant can move tables outdoors. Restaurant owners also have to present their proposals to local community boards and advisory groups made up of activists and civic leaders.

While those groups do not have an up-down vote on the plans, their recommendations are submitted to the Transportation Department for consideration before approval. Some boards have sought large-scale changes, such as reducing the dimensions of sheds, restaurant owners said.

Even after the comptroller office issues a license, restaurants then need to seek approval from the State Liquor Authority to serve alcohol outside.

So far, just four restaurants with outdoor-dining licenses have been authorized to serve alcohol outside, the authority said.

Steven Abramowitz, who co-owns three well-known Manhattan restaurants, Cafe Cluny, Cafe Luxembourg and the Odeon, said he had been trying to get answers from the city on the status of their sidewalk and roadway applications. He questioned whether it was worth opening on April 1, as the Department of Transportation will now allow, if the State Liquor Authority will not issue alcohol permits without licenses.

“They presented it as a very simple process but it absolutely is not,” Mr. Abramowitz. “The whole thing is pretty arduous.”