Re:What happened during your Heath Department inspection?
New York's byzantine bureaucracy, where fines are more for revenue than health and safety, and competing, overlapping offices are run by people who are afraid that if they don't bring in a lot of revenue, they will be eliminated, creates special problems. If the Health Department requires a standard, and your business exceeds that standard while creating a safer environment, you will get downgraded and fined. And often, there are contradictory regulations, where you are required to do things that you are forbidden to do (my favorite was the two regulations that required liquor stores to have doors no greater than 3 feet wide and no less than 6 feet wide). At one of my clients, an inspector came in about a month ago, and was almost furious to find out that the client was exempted from the rules that they were ready to fine them on (the security cameras were on, so that probably helped).
Oddly enough, the City Council has been regularly blocking or placing deal-killing regulations on large chains trying to get into the city under the principle of "protecting small business", while small businesses are getting fined out of existence.