Trying to stay afloat, bar owners mix it up
By diversifying, from farmers markets to cocktail trucks, they hope to outlast virus
The local bar has long been a “third place” to socialize. Not home, not work, it’s a place where everyone should be able to walk in as equals.
But the crushing weight of the pandemic has taken its toll on neighborhood institutions across the Houston region, not only altering community hangouts, but driving their owners to extremes to hold on until the crisis passes.
Bar owners have taken to driving trucks selling cocktails to-go, to opening outposts at farmers markets and tapping personal savings as they turn to an odd mix of new revenue streams as they scramble to hold on.
“We are right now paying a disaster recovery loan with a disaster recovery loan,” said Erik Bogle, co-owner of downtown bar Houston Watch Co., pointing to how he’s paying for a loan they got to repair building damage from Hurricane Harvey with a
COVID-19 relief loan. He said he and his business partner have had to take on nearly as much debt as they did when they first opened the bar in 2015.
When the first shutdown hit, bar employment in the ninecounty Houston metro area plummeted to 2,465 jobs in April from 7,761 in February, according to quarterly data provided by the Greater Houston Partnership, a
nearly 70 percent decline. Employment at bars and restaurants in the Houston area is down by about 25,100 from 273,800 jobs in February.
In all, Texas lost 14 percent of its restaurant and bar businesses between March and November, according to the Greater Houston Restaurant Association.
Then coronavirus infections in Texas soared in the weeks after Christmas, triggering a third wave of shutdowns for bar owners across the state. And while the orders did not apply to restaurants or Harris County bars that didn’t convert to restaurants, which have been closed since the second shutdown in June, the Greater Houston Restaurant Association still predicted that the number of area closures would rise to 30 percent in the coming months.
“My real concern is that we won’t just see layoffs, but this may be the final blow that puts many bars out of business,” said Patrick Jankowski, senior vice president of research at the Greater Houston Partnership.
Small bars have had a hard time distinguishing themselves from venues breaking the rules , said Melissa Stewart, executive director of the Greater Houston Restaurant Association, pointing to unsafe conditions at local nightclubs. She said it’s time the neighborhood bars in good standing see some government support.
“They need cash,” she said. “You told businesses that were doing nothing wrong that they can’t do business. They need help for that.”
Enforcement of pandemic restrictions has been spotty. Loopholes, such as those allowing dance clubs to classify as restaurants, are many. For owners of small bars who prioritize safety, that shakes out to all pain and no gain. They watch, frustrated, as people pack into event venues.
“Every time I see it, I know my bar is going to be affected,” said Lindsay Rae Burleson, owner of Two Headed Dog in Midtown.
Burleson relaunched Two Headed Dog as a restaurant and reopened in November after an eight-month shutdown that nearly buried her new establishment. She worked at a distillery while her bar was shut down and poured personal money into the business, scraping enough together to keep paying rent and repermit as a restaurant, set up at farmers markets, reconfigure her space and buy outdoor heaters and tents for her patio. All told, she said recent pivots cost her around $7,200.
“It was kind of the last Hail Mary to keep us going,” she said.
Hanging on
Her goal, and that of others in the same situation, is to buffer her losses through new revenue streams and hang on until the pandemic relents.
“Most operators who are doing it right — none of us are making a
profit or even breaking even,” she said, noting she’s kept her occupancy to about 25 percent and seats mostly on the patio because that’s what she and her staff felt comfortable with.
Taking the high road comes at a cost, and without support, she said. Her team gets tested every five days, there’s a temperature check at the door and she’s paying sick leave for any employee who needs to quarantine. To make ends meet, she continues to work part time at the distillery, peddles mixers at farmers markets and even sells vintage glassware and cocktail ice from the bar.
“We’ll close the restaurant at 2 a.m., clean up by 3, sleep for a few hours and load up at 7 for farmers markets,” she said. “We’re trying to do anything and everything to keep my employees employed.”
Alba Huerta, owner of Julep, reopened in October for service at her bar-turned-restaurant, but closed again in November as cases started rising again, opting instead to focus on the cocktail delivery truck she launched over the summer.
One Armed Scissor owner Mike Molina and his business partner had been shopping around for a space to launch a second location
when the pandemic hit. The funds set aside for that purpose instead went to stop the bar’s bleeding. They let go of their few employees, shut down the phones and the internet. Now, their lease is up and they are considering whether or not to renew.
“I paid rent for nine months on a building I did not use,” Molina said.
The endgame
Developer Dan Zimmerman has several downtown bar tenants and is trying to be as flexible as his own fixed costs allow. He said it makes sense to work with bars
struggling to pay rent because he’s unlikely to find another bar looking to take over the place and it would be costly to change the concept.
“Throwing out the bar isn’t necessarily the best business decision, either,” he said, “on top of the moral decision.”
But costs don’t let up, for landlords or their tenants. In addition to rent, bar owners also face insurance costs, taxes and permitting fees.
D&W Lounge owner Keith Weyel said he had to pay $600 in city licensing fees for a bar that’s been closed for more than nine months. Weyel said it’s contradictory to say his bar isn’t safe during the pandemic, but he could reopen if he spent hundreds more in permitting fees and reclassified as a restaurant. “It’s just about money,” he said.
Michael Neff, owner of the longclosed Cottonmouth Club, balked at being asked how he was doing.
“The real question is: why?” he said. His bar has been closed for most of the past 10 months and his staff is “long gone.” The bar’s future is precarious given a persisting pandemic that makes it dangerous to gather. And just how much debt to saddle himself with has become a torturous gamble.
So why stick with it, then? “Because I’m stubborn.” And he’s thinking about the endgame.
“When this is over people are going to need that outlet,” he said. “It’s not the alcohol, it’s the humans.”