Shutdowns have local bar owners on the rocks
Bars that offer food service are scraping by with booze to-go operations. Their counterparts without kitchens can do little but watch their coffers wither.
“We’re all looking at our bank accounts like you would at the life bar in a video game,” said Michael Neff, owner of the Cottonmouth Club downtown. “All of us are just watching that life bar every day trying to predict how long we have until it disappears.”
The industry had barely got its legs back following the limited reopening that went into effect on May 22 when on June 26 Gov. Greg Abbott ordered the state’s roughly 5,500 bars closed indefinitely. Bar owners, feeling they have been targeted, have decried what they describe as a lack of support from leaders as they square off with the coronavirus. Some have gone as far as filing suit against Abbott seeking to have the closure order overturned.
“Financially it’s just the worst you can imagine,” said Scott Repass, owner of Poison Girl in Montrose.
To be clear, Repass said, he agrees that people should not be drinking in bars right now. But he said there’s little difference between what would be happening at bars if they were open and what continues to happen at
and restaurants.
“If you shut down a bar, people are just going to go to a restaurant with a bar,” he said. “There’s just no logic to it, that that is safer than a bar operating at 25 percent capacity. We feel like we were scapegoated.”
The mandatory shutdowns devastated the industry, said Michael E. Klein, president of the Texas Bar and Nightclub Alliance. “Every day that passes is a business that will never return.”
When neighborhood bars go under, Neff said, the economic and cultural impacts ripple broadly.
“The blood in the water would be without precedent,” he said. “Entire identities of cities would disappear.”
Hard choices
Before Texas bars were first shut down in March, Union Venture Group employed nearly 500 people among its dozen bars in Austin, Houston and Dallas. Today that workforce is down to nearly nothing as the hospitality group, like other Texas bar and nightlife operators, is shut down.
“A lot of people may have to make that hard choice to either shut down for good or pivot to something else to make a decent livelihood,” said Darren Van Delden, a principal at Union Venture Group whose portfolio of bars includes the posh 77 Degrees in Midtown. “The people being affected the most are the employees themselves. People need to take care of their families, so there’s going to be a lot of hard choices ahead.”
Abbott first threw Texas bars into stasis when he ordered them to close on March 16. The immediate impact was more than 75,000 lost jobs. At the time, it was estimated that closing the bars would account for $630 million in lost gross revenue and a loss of more than $42 million in liquor tax revenue to the state.
Bar owners — those who receive more than 51 percent of their gross receipts from selling alcohol — got a reprieve on May 22 when they were allowed to reopen at 25 percent capacity, which increased to 50 percent on June 3. But it all came to a halt again three weeks later when Abbott, out of concern for a continued spike of COVID-19 cases, ordered them shut June 26.
“We went into this thinking it was going to be a temporary thing,” Van Delden said. “Now we’re being shut down indefinitely. It’s one thing to stay afloat when you can see light at the end of the tunnel. But when you don’t know when you’re going to open up, it’s hard. There’s no light at the end of the tunnel.”
Van Delden’s brother and business partner, Jeff Van Delden, was a plaintiff on a federal lawsuit filed by the Texas Bar and Nightclub Alliance against Abbott challenging the constitutionality of the governor’s executive order to close Texas businesses that take in more than 51 percent of their gross receipts from selling alcohol.
That lawsuit, filed in the U.S. District Court for the Western District of Texas, calls Abbott’s order unconstitutional, irrational and unjust.
“This is extremely arbitrary, capricious and unfair,” said Brent Webster, senior counsel at Edwards Sutarwalla law firm. “The governor didn’t just close down the service of alcohol, he punitively went out for bars. He literally banned any activity in that business. No other industry has been banned in that sense.”
While a federal judge granted Abbott’s motion to dismiss this case late last month, two similar lawsuits filed by Texas bar owners are still pending — one in Travis County Disers trict Court and another in Dallas County District Court, which called for depositions of Robert Rowling and Tilman Fertitta. Both prominent businessmen served on the governor’s Strike Force to Open Texas.
“Rowling’s and Fertitta’s testimony is necessary because these individuals on the Strike Force have businesses that have not been shut down, despite the fact that their businesses have components to them that are identical to standalone bars that were shut down,” a presiding judge wrote, noting both men also contributed heavily to Abbott’s campaign.
A hearing in that case was set for Aug. 28. Spokesmen for Abbott did not respond to a request for comment.
Through it all, bar owncafes
have had to adapt to the reality of the moment.
Innovate to survive
Alba Huerta said that when the second shutdown hit, she knew she’d have to get creative to survive, which is why she’s launching a cocktail delivery truck service out of her Washington Avenue Corridor bar, Julep.
When Abbott allows doors to swing back open, Huerta fears a rerun of what happened in May.
“For me at least, the biggest piece of the puzzle hasn’t been solved if we’re going to do this the same way in the second round,” she said.
Those in the process of opening new bars said it’s been dizzying changing their business models to meet shifting rules and demands. Still, they benefit from building a future that includes coronavirus-era changes in real time.
Justin Ware said his bar, Night Shift, is still under construction, but instead of focusing on hiring a staff he and his business partners are serving canned craft cocktails to-go from a catering space around the corner from their bar-to-be on Harrisburg.
“Now that we’re kind of forced to do this, it’s bringing a new perspective on what cocktails can be,” he said.
Lindsay Rae Burleson, who opened Two Headed Dog with her business partner before the pandemic hit, has been working since March at a Houston distillery making hand sanitizer to make ends meet.
The bar’s fate is uncertain, she said. Governmentbacked loans have run out, and she decided not to renew her insurance, which would require a substantial down payment on Aug. 1.
Losing the bar for good would strap her with a debt so large “it doesn’t even feel like a real number.”
“I worked nine years to get this bar,” the longtime bartender said. “I put everything I had in. I haven’t got a cent of salary yet.”
Artisan bars and neighborhood ice houses are part of Houston’s fabric, she said. But now the city is barreling toward a reality in which only the chains may survive.
“That’s not a city I want to live in,” she said. “That’s not a city I want to be a tourist at.”