‘PLAN FROM THE TOP’
What restaurant, bar owners want from Biden
For an industry ravaged by the new coronavirus pandemic, a change in leadership is giving some Phoenix restaurateurs hope that relief could be on the way.
On Wednesday, Jan. 20, Joe Biden and Kamala Harris will be sworn in as president and vice president. With the new administration comes other changes: Georgia voters flipped two crucial seats in the Senate, making it the first time since 2011 that Democrats will control both chambers of Congress as well as the presidency.
Regardless of which party is in power, it’s not time to sit back and wait for action, said Magaly Saenz, who runs Tres Leches Cafe in Phoenix with her partner José “ET” Rivera.
“When your party is in office, people tend to be more complacent and quiet to whatever they’re doing,” Saenz said. “We need to remember to advocate for our communities as hard as before ... I’m going to keep writing my letters and
talking to my local reps, keep pushing.”
Reports show small businesses — and particularly businesses owned by women and people of color — have been disproportionately impacted by the COVID-19
economic fallout. In early December, the National Restaurant Association predicted more than 110,000 restaurants have closed across the country because of the pandemic.
The Arizona Republic asked six restaurant and bar owners in metro Phoenix to sound off on what kind of industry relief they want from the Biden administration.
Pass the RESTAURANTS Act so the industry can get direct aid
Phillip Quintana and his wife, Gabriela, opened Tap Savvy, a craft beer and wine bar in Litchfield Park, just a few months before the state-mandated shutdown in March 2020.
When they spoke to their bank about what financial aid was available, all of the options they received were loans, he said. For a fledgling family business, he felt it didn’t make sense to take on more debt. Quintana would like to see more industry-specific grants, rather than loans.
“We had just taken out financing for upfront expenses for construction,” Quintana said. “I just don’t think it’s a financially good decision to take on more debt, even if low interest.”
Danielle Leoni, co-owner of
The
Breadfruit & Rum Bar in downtown Phoenix, said the RESTAURANTS Act is one solution with bipartisan support that’s already on the table — it just needs to pass.
Introduced in June 2020, the RESTAURANTS Act would establish $120 billion in federal grants to food service and drinking establishments. For the program’s initial period, only businesses with an annual revenue of less than $1.5 million would be eligible.
The House passed the bill in October, but it did not make it to a Senate vote. It’s unclear if it will progress in the near future, but Leoni and the Independent Restaurant Coalition continue to push for it.
Every day the RESTAURANT Act sits in Congress, restaurants continue to close and each closure adds up, Leoni said. The food service industry ended 2020 with 2.5 million fewer jobs than the pre-coronavirus employment level, according to the National Restaurant Association.
If major airlines could be included in a recent stimulus package, why not restaurants, Leoni asks.
“The heart and soul of your neighborhood are mom-and-pops, independents that care about your roads, care about your kids, care about your kid’s soccer game, care about trees on the street, care about our farmers, care about education,” Leoni said. “We are the people that care about the community around us because we are your community.”
Make the Paycheck Protection Program more flexible
The Paycheck Protection Program, or PPP, gave some businesses a temporary lifeline, but restaurateurs felt the onesize-fits-all approach didn’t address their specific industry needs and allowed big businesses to snatch up loans intended for small businesses.
TGI Fridays and P.F. Chang’s were among the applicants that received a maximum $10 million PPP loan. In response, the second round of PPP has new guidelines to prioritize small businesses, but Quintana said the program should also take into consideration new businesses.
Quintana’s banker told him he would only qualify for $200 in the first round of PPP, he said. He believes it was because his business was so new, he didn’t have a year’s worth of payroll to show yet. In the end, he didn’t take it because it felt like a waste of time, he said.
For restaurants that do take a PPP loan, the program should be more flexible with how they can spend it, he added.
Currently, businesses have to spend 60% of their loan on payroll to get the loan forgiven. That may not be helpful for restaurants with few employees and where the bulk of expenses falls elsewhere, Quintana said.
Along with bills, restaurants are spending money on additional items to operate more safely during a pandemic, such as constructing barricades.
Offer rent relief for struggling business owners
Rivera and Saenz, who own Tres Leches Cafe, reopened the Van Buren Street location of the coffee shop in the fall after months of closure. Rent is still a struggle, though, and Saenz said she would like to see federal funding go toward commercial rent relief. Being late on rent can lead to additional fees, making it worse for tenants.
For example, businesses under a certain size, after proving their revenue has declined, could receive vouchers that they can use to pay rent, she explained. Landlords could then exchange the vouchers for money.
Some restaurants voluntarily close for reasons out of their control, such as if an employee is exposed to COVID-19 or if staff members are waiting on pending test results, Saenz said. But businesses still have to pay the same amount in rent each month.
“People can’t pay rent now and it’s a real scary situation,” Saenz said. “But landlords have a mortgage they have to pay too, and they’re put on a bind and have to get money from somewhere.”
Ali Kashani, co-owner of ZK Grill in Phoenix and Chandler, said he’s using his own savings to help keep the restaurants open. He suggested a plan that helps with rent, such as direct grants to businesses or an incentive for commercial landlords so they can be easier on tenants until the pandemic is over.
Issue a national mask mandate
“We need a plan from the top,” said Ross Simon, owner of Bitter & Twisted Bar in downtown Phoenix. “That is something we are definitely missing. The entire thing has been mismanaged all the way down ... To start, we need a national mask mandate.”
Restaurants and bars can’t return to full capacity until the COVID-19 health crisis subsides. Science shows that masks help prevent the spread, but enforcement seems to come down to individual businesses asking their patrons to wear masks, Simon said, pointing out a recent Republic report that no one in Arizona’s biggest cities has been cited for violating the mask mandate.
Lack of enforcement means plenty of businesses can flout the rules, causing COVID-19 rates and cases to go up, which then delays the return to “normalcy,” Simon said. “They’re basically capitalizing on making a quick buck, the short-term gain in a long-term problem, while the rest of us are following rules and procedures to keep our guests safe,” Simon said.
Differentiate between small businesses and large corporations
Lori Hashimoto, co-owner of Hana Japanese Eatery, said she would like to see the Biden administration categorize businesses so that in the future, if there’s another pandemic or other curveball, the government can prioritize who receives aid in a more timely manner.
Local mom-and-pop restaurants should not be put in the same group as restaurants owned by large corporations and hospitality groups with big investors, she said.
“Just as we are taxed as individuals, all of that needs to be organized and straightened out for the future,” she said.
“A lot of these restaurants are going out of business because they didn’t get help soon enough, which changes our community.”