San Antonio Express-News (Sunday)
Liberty Bar fight to survive highlights industry’s woes
Owner relates struggles to keep city institution alive in coronavirus time
Dwight Hobart founded the Liberty Bar 35 years ago in a historic, but structurally odd, building — it slanted — on Josephine Street. Ten years ago, he moved the storied restaurant into a restored convent on South Alamo Street.
Operating the Liberty Bar, Hobart said, had always been difficult and rarely profitable. And then the pandemic hit.
He recently reopened for take-away service and limited outdoor seating.
In an email exchange with Express-News columnist Michael Taylor, Hobart reflected on the travails that he and other restaurateurs faced pre-COVID-19 and their prospects for recovery now.
The following transcript has been edited for clarity and length.
Before this crisis — in fact, about five years ago when a number of new Southtown restaurants were opening up — you told me that people didn’t realize how hard it is to turn a profit in the restaurant business. You didn’t see how so many new restaurants could survive. Tell me about the difficulty of running a restaurant, even in good times.
Most restaurants go broke sooner rather
than later. The Liberty Bar was born broke and has pretty much stayed that way, with the exception of 10 golden years at the old location on Josephine Street, during which we enjoyed the inadvertent benefits of what amounted to an endless “going out of business” sale. That was before moving to our present home in the former convent on South Alamo Street. The Liberty Bar has been in business 35 years.
The rubber met the road on July 14, Bastille Day, of 1985 when we opened our doors to the public in a catawampus two-story woodframe building that looked like it was about to fall down. We had low rent and a long-term lease in a largely vacant light industrial neighborhood. We lived upstairs and did the greater part of the renovation ourselves.
The downtown business crowd came for lunch, matrons from Alamo Heights got tipsy in the afternoon and every night the art mob was all over us like a dog on a June bug. Still, we lost money hand over fist for the first 10 years.
We had style, but when it came to facts of life we didn’t know “get down” from “sic ’em.” The basic American restaurant format relies on bulk suppliers and their supplies are geared to the bottom line: frozen, pre-processed, preportioned, canned and built for volume. Hot grease is the name of the game. And the customers love it. Cut to the nuts and bolts. Even effete artists have to track inventory and control labor costs. We did not. We baked three different kinds of bread every day, then gave it away. Our baker alone ate our payroll lunch, not to mention our supper and our breakfast on the weekend.
Where does all the money go in a restaurant?
We did learn a few things about cost control. Never ask the people who collect money for desserts to portion out the desserts. Always look a gift horse in the mouth. There was a hardworking busboy from Tampico named Ruben who expressed the desire to move up the ladder in the kitchen and learn how to bake. He did that. And did it well. One day, he showed up with a copy of the magazine California Living. There was a Coconut Custard recipe in the magazine that called for the canned ingredient Coco Lopez , commonly used to mix piña coladas. Ruben had seen Coco Lopez behind the bar. He wanted to try the recipe. We said yes. It was a great success. We still serve the Coconut Custard today. Unfortunately, Ruben no longer works at the Liberty Bar. Six months after his inspiration, we realized that Ruben was baking twice as much as we needed, then selling the extra out the back door to other restaurants.
There are other harsh realities of human behavior in what we might laughingly call “the hospitality industry.” Cooks hate servers, servers hate cooks and they all disdain management. Customers are a necessary evil. One day a cook rummaged around among the memorabilia and impedimenta accumulated by a previous leaseholder and discovered a boxing ring bell. The cooks installed it in the kitchen above the order window and took pleasure in banging this ear-splitting gong with the back edge of a chef’s knife every time an order was late in going out. This act never failed to enrage the servers or delight the cooks.
How do you think restaurants will be able to cope with this current crisis, depending on whether they own their own location, or not? Are there downsides to owning your own location?
We own the building at 1111 South Alamo Street. The building is paid for, but even a debt-free building in the King William district of San Antonio is an expensive asset. Property taxes have doubled over the past few years. What is the city of San Antonio going to do about the loss of sales tax revenue during the coronavirus shutdown? Tax appraisals for 2019 are a done deal, but will there be adjustments to appraisals and valuations next year? Part of our building is over 150 years old. Death and taxes are inevitable. Utilities and maintenance are interminable.
Even owning your own building, how do you make the numbers work?
After we moved, our sales fell by about half while our building costs and labor expense doubled. I could say I didn’t know what I was doing, but the fact is I did know. And I did it anyway. You don’t live forever. And everybody has their “eccentrics” as my Panhandle partner Doyle Smith puts it. Restaurants tend to be an emotional-calculus function of the owner’s personal identity fantasy. We could say this is irrational, but personal identity is not paid out in dollars and cents. Wages and taxes are, though. I guess I have become more “rational ”as time goes on, but probably not enough so as you could tell the difference.
I have no idea how restaurant owners will make enough money to pay the rents they were paying before the shutdown. It seems impossible. A realistic home run in the sit-down restaurant business is holding onto 10 percent of all the money that walks through the door. If you reduce the number of
potential customers 50 percent by fiat, and you were only holding onto 3 percent (or losing money) when the limit was 100 percent table occupancy, how will you ever close the gap? Raise prices? Concoct burgers out of polyurethane foam? While customers are feeling poor and fearful about the future?
The restaurant business prospers when folks are feeling flush, but gets flushed when folks are feeling flakey. “Knowing” may not necessitate an infinite regress because some knowledge does not depend on demonstration. But I expect the bar and restaurant contingent will come to know the sad consequences of the coronavirus to be “turtles all the way down.”
After a few days of takeout only, you decided to close entirely for the duration, rather than make a go of running a takeout business. Now you are open again for takeout. Why? Was it economic? Health-related? Spiritual or morale-related?
My thought process was all of the above, economic, health related, spiritual, morale-related and morality-related. In the simplest terms, technically speaking, I didn’t know whether to (expletive) or go blind.
On Monday, May 18, 2020, the Liberty Bar decided to restart with takeout. We have elected to be a little bit pregnant. A new menu. Some golden oldies. Some stunning departures. We’ve been reading Anthony Bourdain and Peter Reinhart. We’re sharpening our knives and feeding the sourdough.
Are your employees currently laid off? Do some remain on salary? Can you describe the employment situation?
Right now, (most) employees are on “furlough” with the promise that they can return to work if we ever get the Liberty Bar back in business.
What is your priority right now for surviving this crisis? Staying alive is a good idea. I am 77 years old. Of course, after I have washed and shaved my face, brushed my hair and settled back with a cup of strong coffee, I look much younger. But candidly speaking I am on the backstretch of my working life. My jocular Amarillo urologist tells me I need “the roto-rooter!” And that is all before the coronavirus reared its ugly head, which, as I am given to understand, has a predilection for the aged and infirm.
My life partner Patty Ortiz is much younger but still old enough to know better. We both fall into the ‘high risk’ category. So, again, even before the present crisis, our strategy and our priority for survival is: 1) stay alive and healthy, then: 2) make the business happen.
What do you look forward to about the future of the Liberty Bar?
Over the past year we ground out a steady improvement in sales, cost control, quality of service, character of food and drink as well as the look and feel of the place. Southtown has actually become a destination. It is not the North Side. It is not “the Pearl.” But it does have its own cachet.
Is there anything that will change for the Liberty Bar when this is all over?
To quote the old country song, “It’s too soon to know.” I am not now and never have been a cook, although I do cook. I was once, for a brief while, a baker. I continue to bake. I am, for better or worse, a restaurant owner, a restaurateur. I feel more like the tail struggling to wag the dog.
Michael Taylor is a columnist for the San Antonio Express-News and author of “The Financial Rules for New College Graduates.” michael@michaelthesmartmoney .com | twitter.com/michael_taylor