City Paper is not for tourists
This article also appears in our March 20 print issue under the headline “The No-Service Industry.”
Update 3/20: The city expanded the period restaurants and bars must close to on-premise consumption from April 1 through April 25.
Not even a month ago, staff shortages, climbing commercial rents, and Metro’s truncated hours were the local hospitality industry’s biggest woes. But on Monday night, D.C. restaurants and bars served their last dine-in patrons until at least April 1 because of the novel coronavirus. Even though it was the right decision, the move prompted mass layoffs in a field where profit margins are notoriously thin.
How We Got Here
Mayor Muriel Bowser mandated that all restaurants and bars close to on-premise consumption, with take-out and delivery still permitted. The District joined a handful of other jurisdictions that have done the same to urge people to practice social distancing during the global pandemic. The growing list includes Maryland, Michigan, Ohio, Massachusetts, Illinois, Connecticut, New Jersey, Kentucky, North Carolina, California, Florida, and Washington.
It’s been a death by a thousand paper cuts. Restaurant and bar owners first panicked last week because they’re in bed with so many other industries that began closing down after Bowser declared a state of emergency. Concert venues like The Anthem and 9:30 Club ceased operations, the Walter E. Washington Convention Center went dark, and the NBA and NHL suspended their seasons, dealing blows to businesses adjacent to these venues.
As diners began to cancel reservations and private event bookings, restaurateurs started pleading. They stuffed diners’ inboxes and social media feeds with details about their increased sanitation measures and promises to send home sick employees.
But restaurant operators aren’t doctors, lawyers, or epidemiologists. Their business goals didn’t align with the public health goal of flattening the curve of coronavirus cases, and eventually, new Centers for Disease Control and Prevention guidelines caught up with them.
On March 13, the city announced it would follow the CDC’s recommendation and ban gatherings amassing greater than 250 people. Most restaurants and bars in the District have much smaller capacities. That night, droves of diners and drinkers still went out.
Social pressure to stay in began to mount as those at high risk of contracting the virus begged the world to buckle down. A petition with close to 2,000 signatures asked Bowser to step in.
On March 15, the city made some clarifications and instituted new rules. Restaurants and bars couldn’t seat parties of more than six people, had to do away with bar seating, and needed to separate tables by at least six feet. Nightclubs had to cease operating. The new rules didn’t automatically shut down bars, but they weren’t compatible with the bar business.
Then a tectonic momentum shift occurred. Restaurant and bar owners and employees began calling for the city to shut them down and many restaurants and bars voluntarily closed, starting with José Andrés’ ThinkFoodGroup. The new regulations had already begun to strangle operations, and some industry professionals believed that if there were mandated closures, it might make businesses more eligible for emergency financial relief.
“We need strong governmental action to survive this pandemic with our businesses intact,” Tail Up Goat posted on Instagram. “That is why we are urging the mayor to #shutusdown. Doing so properly acknowledges the scale of the current crisis and begins to make available the kind of resources our employees and businesses will require to endure this financial storm.”
“They keep stopping short of mandated closures because of the responsibility that goes with it—rent abatement and unemployment,” Red Bear Brewing Company manager Liz Cox told City Paper. “Severely reducing capacity without offering those services is keeping the industry in the worst kind of limbo—less sales and even less assistance.”
Bowser answered that call in a press conference on Monday and issued a warning to any would-be speakeasies as she talked about enforcement. “We have the power in a state of emergency to revoke business licenses,” she declared. “We would identify the ways a business didn’t comply with the Department of Health mandate or other mandates and once we establish they have defied those orders, we can revoke those licenses … As mayor, I don’t wake up in the morning thinking about how to shut down a business or issue a fine, but I’ll do it.”
Attention shifted Tuesday morning to a critical D.C. Council meeting where councilmembers passed emergency legislation bringing some relief to unemployed workers and small business owners, who are now trying to calculate what kind of financial assistance they need to eventually reopen once permitted to do so. Everyone from the owner and executive chef down to the cook who sends money home to his or her family needs help.
As an industry that pumps up the local economy to the tune of $7.1 billion annually, the nightlife industry is counting on the city to return the favor. “Cash is king,” says Restaurant Association of Metropolitan Washington CEO Kathy Hollinger. “Relief has to come in the form of immediate, easy access to grants that give restaurants the capital to stay afloat during an uncertain time. All of the other things are wonderful, but in order for them to reopen they’ll need that kind of financial support.”
Specifically, the “COVID-19 Response Emergency Amendment Act of 2020,” approved unanimously Tuesday, extends unemployment compensation to those who are out of work because of coronavirus; creates a small business grant program; prohibits providers from disconnecting a business’ water, electric, and gas during the crisis; permits bars and restaurants to sell sealed wine, beer, and spirits; and offers assistance with sales and property taxes valued at $266 million.
“I’m concerned that national response has provoked a severe recession and a great number of businesses and individuals will be hurt,” Council Chairman Phil Mendelson said at the legislative meeting. “We all want to minimize the economic impact as much as we can.”
Some business owners are already frustrated that the Council didn’t go far enough. Thamee owner Simone Jacobson wrote to legislators imploring them to increase unemployment benefits. Currently the District pays $444 per week. Jacobson and others wanted to see that number climb to $1,000, but it was ultimately up to D.C. Chief Financial Officer Jeffrey DeWitt. By his calculation, if this stretches to the end of June, the city will need to cut $500 million in 2020 spending.
Congress is also working on a federal coronavirus relief bill. After a couple of rounds of revisions, it passed in the House Monday night. The Senate should vote on it this week. Expect the legislation to cost hundreds of billions of dollars, a deal that the Postis characterizing as similar to the stimulus packages Congress enacted during the 2008 financial crisis. The hospitality industry is hanging on by a thread and hoping there’s some sector-specific relief. The bill includes some paid sick leave provisions, but that wouldn’t help workers who have been laid off because their businesses have closed.
Restaurant and bar owners tell City Paper that while some of them have insurance plans that cover interrupted business, global pandemic isn’t included alongside things like flood and fire. “That would be like getting volcanic eruption insurance in D.C.,” says Coconut Club chef and owner Adam Greenberg.
Greenberg and other business owners shared what kind of assistance they need most from rent deferment and commercial loan deferment to no penalties on future unemployment premiums, and a policy where it would be illegal for a landlord to evict a tenant over missed rent payments.
Timber Pizza Co. and Call Your Mother co-owner Andrew Dana is looking for quick and easy access to Small Business Administration loans with low interest rates. The agency issued a statement on March 12 detailing how to apply for disaster relief lending. It says the interest rate is 3.75 percent for small businesses without credit available elsewhere.
“3.5 percent is the normal rate for disaster bonds, but that isn’t going to cut it,” Dana says. “With margins hovering around zero percent for restaurants, we need interest rates to also hover around zero percent or this disruption will shutter restaurants left and right. Less than 1 percent interest rates are what we’d like.”
Dana suggests an idea floated by Massachusetts Senator Elizabeth Warren. “It’s the idea of zero percent bonds with the assurance that we keep folks on payroll,” he says. “I think that’s something we should be fighting for as a restaurant—money in our pockets now to keep paying employees. It’s simple, avoids the government worrying about the administrative issues of unemployment, and most importantly for so many restaurants, it protects undocumented workers who otherwise don’t have access to unemployment.”
What You Can Do
Restaurants and bars can only make money off of take-out and delivery orders, which in no way compares to having a dining room full of patrons. Despite being shut down and squeezed as they await help, some are stepping up to feed those in need.
Steakhouse Medium Rare is bringing free meals to neighbors older than 70 who are at risk if they leave the house. RASA, a fast-casual Indian restaurant in Navy Yard, is serving free take-out meals to school children under 18, hospital workers with valid ID, and employees and their families. Hummus slinger Little Sesame is partnering with Meals for the City to feed the food insecure.
There are a few things diners concerned about their favorite bars and restaurants can do to return the favor in the new normal. If you’re comfortable with it, pick up take-out or order delivery from places that have decided to continue operating within the legal parameters. Even fine dining restaurants that haven’t packed up food before are giving it a go, including Little Serow, Emilie’s, Albi, Centrolina, and Elle.
Consider purchasing merchandise from businesses that sell swag and gift cards, although the latter option isn’t a perfect solution since some third-party gift card processing companies don’t fork over the cash until they’re redeemed. A handful of grassroots efforts are also growing in the community. Park View restaurant and events space Hook Hall teamed up with RAMW to launch a fund for supplies and meals for restaurant and bar staff.
Then there’s the Virtual Tip Jar. It’s a Google Form that can easily bring you to tears. At press time, 2,209 presumed local bar, coffee shop, and restaurant employees had entered their Venmo handles or PayPal contact information into the spreadsheet, hoping the public would open their wallets and give them a hand. They listed their place of current or former employment and whether or not they have health coverage. Hundreds don’t.