‘I’ve never felt more abandoned’: Headed into a third pandemic year, restaurants are still pleading for help
“This is a make it or break it year for us.”
Two years of ever-changing health restrictions, people working from home, and sometimes-cautious customer bases have left restaurants across the country struggling to survive. Not only are they financially stretched, but the marathon of uncertainty and constant change is taking the magic out of it for some.
For Steve “Nookie” Postal, who owns Commonwealth in Cambridge and Revival Cafe & Kitchen in Somerville’s Davis Square, the last two years have left him feeling abandoned and defeated.
“It’s awful what we’ve gone through in the past two years,” he recently told Boston.com. “I don’t want to do it anymore. The glitz, the glamor, it’s all over for me.”
Already last year somewhere upward of 90,000 restaurants had closed, either permanently or long term, according to a National Restaurant Association report from May 2021.
The pandemic has also cost restaurants and bars $280 billion in sales, according to a United States Census report.
Though those numbers are for the entire country, the situation isn’t much different in Massachusetts.
For Villa Mexico Café in downtown Boston, the pandemic has stretched them thinner than ever before, even after closing temporarily, operating with a skeleton crew when they were open, and saving as much money as they possibly could.
“We’ve been in operation for 21 years this year, and it is the first time ever that we literally have to be even more of penny pinchers than we ever are,” Bessie King, who runs the restaurant with her mother, Julie, said. “Generally, we’re very hopeful, and we’re like, ‘All right, let’s try it.’ We don’t have that leisure anymore.”
Cheryl Straughter, who owns Soleil in Roxbury’s Nubian Square, is facing the grim reality that her business may be another casualty of COVID-19.
“If I don’t get more customers, I’m not going to survive,” she said. “If I don’t get more contracts, I’m not going to survive.”
‘$28 billion is not enough’: What happened with federal aid
It became clear to many in early 2020 that restaurants and bars needed help. Not only were their consumer bases virtually disappearing due to COVID-19 concerns and restrictions, but staffing issues, supply chain delays, and operating cost spikes also upended the industry.
The first national attempt at restaurant relief was called the RESTAURANTS Act, which stood for the Real Economic Support that Acknowledges Unique Restaurant Assistance Needed to Survive Act.
Unlike the Paycheck Protection Program, which was designed to help small businesses maintain payroll and hire back employees, the RESTAURANTS Act targeted restaurants and bars with a proposed $120 billion relief fund.
“Although the RESTAURANTS Act never passed, the skeleton of the RESTAURANTS Act was included in the American Rescue Plan, and that’s what created the Restaurant Revitalization Fund,” said Erika Polmar, the executive director of the Independent Restaurants Coalition.
The American Rescue Plan, President Joe Biden’s plan to “provide direct relief to Americans, contain COVID-19, and rescue the economy,” was signed into law on March 11, 2021. Contained in it was the Restaurant Revitalization Fund, or RRF, which provided $28.6 billion in relief to restaurants and bars.
“When we wrote the RESTAURANTS Act, it was a request for $120 billion,” Polmar said. “And the Restaurant Revitalization Fund had $28.6 [billion], so what the Restaurant Revitalization Fund needed was more money, just straight up.”
The RRF received more than 278,000 eligible applications, totaling more than $72.2 billion in requested funding, according to the Small Business Administration. The amount of money a restaurant or bar was eligible for was typically equal to the establishment’s 2019 gross revenue minus its 2020 gross revenue and any PPP loans it received.
Because there was not enough money to go around, only a fraction of the eligible restaurants that applied got the funding they needed. More than 177,000 restaurants were left without aid after the fund ran out of money, according to the National Restaurant Association.
Despite the huge number of restaurants that didn’t get any help, Polmar said it’s important to remember that it did work, just only for some.
“It’s really easy to be angry and frustrated and maybe latch on to any fact that sort of supports your anger when you’re one of the folks that wasn’t funded,” Polmar said. “The fund actually worked. The smallest restaurants actually really were taken care of … there just wasn’t enough to go around.”
In Massachusetts, 6,867 restaurants and bars applied for over $2.4 billion in relief, according to IRC. But 4,311 restaurants and bars, or more than 60%, didn’t receive the funding they applied for.
Villa Mexico Café was one of the 2,566 applicants in Massachusetts who was lucky enough to get RRF funding. The cafe received nearly $200,000, most of which went directly into rent.
“Without that RRF money, we would have already closed. It’s that simple,” King said. “It’s not even money that we are asking for is just ‘Oh, let’s see how much I get.’ It’s literally the sales that we lost in one single year.”
King, the cafe’s owner, said they were able to save some, but it isn’t enough to tide them over through continued lower business levels.
Revival didn’t qualify for RRF funds, but it’s sister restaurant, Commonwealth, did. However, even though it was eligible, the Cambridge eatery didn’t receive any money.
“It wasn’t [the government’s] fault that [the pandemic] happened,” Postal, the owner, said. “They came out like they were going to save the restaurants … then they took the pictures and they shook the hands and they kissed the babies and they did all that but they didn’t actually do it. And we’ve been screaming about [how] $28 billion is not enough.”
Postal said he’s “never felt more abandoned” and faults the government for poor execution.
Soleil in Roxbury also didn’t receive any RRF funding, owner Straughter told Boston.com.
“We were plugging in our numbers, and I had a tremendous loss — I could justify everything that would really get me a grant,” she said. “I got to the bottom of the page and it said, ‘You do not qualify.’”
Straughter said she is unsure how a minority, woman-owned small business with large losses wouldn’t qualify for relief, but the RRF form didn’t clarify.
Even among the restaurant owners that received RRF funding who spoke with Boston.com, there is a feeling of abandonment and disappointment in the government.
The program laid out was a good one, they said, but the scale hasn’t matched the need.
“When you have a business and that’s your sole means of income, and it’s your life’s investments, and it’s your life’s dedication to community,” King said. “When you don’t see a response to fix the problem, you’re like, ‘What the hell am I doing this for?’”
Postal, at Commonwealth, said the unequal distribution of RRF funds is contributing to even more competition in the restaurant world. Places that received funding can afford to pay higher wages, which attracts more employees, and in many cases, the people buying restaurants as they close are people who received funding originally, he said.
“So many places have closed because [the government has] done such an absolutely awful job,” he said of the government distribution of RRF. “If I was in charge of that company, the government, and I ran my job, I would fire myself. That’s how bad they’re doing.”
Postal said he doesn’t fault the people who received funding, rather the distribution tactics.
“Imagine you’re living on a street and your house burned down to the ground,” he said. ”All the houses on your street burned down to the ground, and the government came in and said, ‘We know this isn’t your fault. We got you. We’re going to help you rebuild. All you have to do is fill up all this paperwork, wait your turn, and you’ll get your money.’ And then we did that, and then they gave money to 30% of the houses on your street.”
Soleil’s Straughter echoed complaints about the distribution of funds, saying she would have preferred the money go to the state and the state do “due diligence” to disperse it to individual companies.
“You cannot always judge a business on a financial — and that is the standard, that is the norm,” Straughter said. “There’s got to be somebody, like the Wizard of Oz, somebody’s got to sit behind the curtain and just figure this stuff out.”
What restaurants owners say they need
Sen. Chuck Schumer called the RRF a “down payment” on restaurants when the fund was first established. Now, almost 300 days later, restaurants are wondering where the rest of the investment is.
Right now, IRC is trying to get the fund replenished by Congress.
“We created this organization with one goal originally, and we haven’t accomplished it,” Polmar said. “We have to get these restaurants and bars the financial assistance that they need.”
Though Villa Mexico has some of its RRF funding stored away in savings, it’s not enough. King estimated that if Villa Mexico Café can reopen at the start of March as planned and sales don’t rise dramatically, their savings will only last until about the start of summer.
“This is a make it or break it year for us,” she said. “We need to realize that if we don’t make a [profit] this year, it’s really going to impact the future of the business.”
Above all else, restaurateurs who spoke with Boston.com all echoed that the Restaurant Revitalization Fund needs to be replenished to help the overwhelming majority who didn’t get any aid in the first round.
Those who were eligible, but weren’t at the front of the line, are still in a state of limbo, they said.
“They’re in purgatory, and it’s awful,” Polmar said of the more than 177,000 applicants who are waiting for the fund to be refilled. “These folks have been waiting almost 300 days since the fund was created. Many of them are on the verge of bankruptcy. Eighty percent of them will permanently close if the fund doesn’t get replenished.”
The need was exacerbated by the omicron wave, which brought spikes in cases and more restrictions in some places. According to a recent IRC survey, 58% of businesses reported their sales decreased by more than half in December 2021.
Straughter said she appreciates all her returning customers at Soleil, but noted that COVID has forced her to expand her business in other ways, mainly through catering.
“Thank you to anyone that has ever walked through our doors or ordered online,” she said. “I appreciate whether it’s a cup of coffee, or it’s a barbecued beef rib dinner. Every dollar helps. In order for us to survive, catering matters, [and] we need new customers … We need people to come outside of their neighborhood and just explore other cuisines.”
Polmar said IRC has been fighting to get restaurant relief included in a larger package like an adjacent omnibus bill or a COVID urgency package. She said the organization is targeting mid-March, and “if that doesn’t happen, we lose the industry.”
She encouraged people to enter their representatives numbers in their phones and call often to express support for replenishing the fund.
If all the restaurants that are on the brink of closing do shutter, Polmar said it would cut the industry in half.
That is not only a huge loss of jobs, but money in taxes and fees, community spaces, and yummy places to eat, according to restaurant owners who spoke with Boston.com.
“A politician is never going to go to the Cheesecake Factory to hold a fundraiser, they always go to the local mom and pop place because they want to see part of the community,” King of Villa Mexico Café said. “As long as you want to keep utilizing us, we need to survive. … We need local economic relief for independent restaurants.”