The Arizona Republic

‘PLAN FROM THE TOP’

What restaurant, bar owners want from Biden

- Priscilla Totiyapung­prasert

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.”

 ?? MEG POTTER/THE REPUBLIC ?? Phillip and Gabriela Quintana pose for a portrait at their craft beer bar, Tap Savvy, in Litchfield Park on Jan. 1.
MEG POTTER/THE REPUBLIC Phillip and Gabriela Quintana pose for a portrait at their craft beer bar, Tap Savvy, in Litchfield Park on Jan. 1.
 ?? PRISCILLA TOTIYAPUNG­PRASERT ?? Magaly Saenz brings her daughter Lola to Tres Leches Cafe on Oct. 17, 2019.
PRISCILLA TOTIYAPUNG­PRASERT Magaly Saenz brings her daughter Lola to Tres Leches Cafe on Oct. 17, 2019.
 ?? CHEFS FOR THE POLLS ?? Phoenix chefs Danielle Leoni (left) and Lori Hashimoto (lower right) worked to bring free meals to voters on Election Day as part of the Chefs for the Polls project with World Central Kitchen.
CHEFS FOR THE POLLS Phoenix chefs Danielle Leoni (left) and Lori Hashimoto (lower right) worked to bring free meals to voters on Election Day as part of the Chefs for the Polls project with World Central Kitchen.
 ?? ANDREW HARNIK/ASSOCIATED PRESS ?? President-elect Joe Biden and Vice President-elect Kamala Harris stand on the stage Nov. 7 in Wilmington, Del.
ANDREW HARNIK/ASSOCIATED PRESS President-elect Joe Biden and Vice President-elect Kamala Harris stand on the stage Nov. 7 in Wilmington, Del.
 ?? MIHALYIPHO­TO.COM ?? Owner Ross Simon at his Bitter & Twisted Cocktail Parlour in downtown Phoenix.
MIHALYIPHO­TO.COM Owner Ross Simon at his Bitter & Twisted Cocktail Parlour in downtown Phoenix.

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