Sign up for our free newsletter
Free D.C. news, delivered to your inbox daily.
During Donald Trump’s presidency, federal workers faced economic hardship when they were furloughed twice during government shutdowns stemming from stalled talks on appropriation bills in Congress. The partial shutdown spanning from December 22, 2018, to January 25, 2019, was the longest in history and impacted 800,000 employees.
Landlords and banks expected rent and mortgage payments, car notes and student loans payments did not go into forbearance, bills went unpaid and people living paycheck-to-paycheck suffered. The Office of Personnel Management issued a memo suggesting that down-and-out employees exchange handyman services as partial rent payment. The Coast Guard told their service members to “have a garage sale” for supplemental income. Federal workers were on their own.
There are parallels between then and now. Ten months into the COVID-19 pandemic, restaurants and their workers are struggling make ends meet. Absent any recent federal action, they’re fending for themselves and accepting whatever scraps come their way from cash-strapped local governments.
When Congress passed the CARES Act in March, it included some support for restaurants, bars, and tasting room breweries that depend heavily on daily customers to walk through their doors. Programs such as the Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL), and Small Business Administration Express Bridge Loans, were made available early in the spring.
Since then, there has been little additional federal relief for the small businesses and the workers that make D.C. a special place to dine and drink. The hospitality and tourism industry is one of the biggest employers in the District, not too far behind the federal government.
Restaurants often open their wallets, offer their talents, or lend their spaces for charitable causes or community endeavors. During the federal shutdowns, small businesses recognized the adversity their regular customers faced and took it upon themselves to devise creative ways to offer discounts or even free meals to the District’s 245,000 federal employees going without paychecks.
Chef and humanitarian José Andrés tweeted, “I will offer again Free Sandwiches to the poor men and women of the federal government, republicans and democrats, at every restaurant of mine in DC for lunch until they get paid again!”
This started a snowball effect as bars, restaurants, distilleries, and breweries began offering #ShutdownSpecials for impacted federal employees. Restaurants asked for nothing in return, but perhaps they hoped their goodwill would be remembered.
The generosity was bountiful. DC Brau matched discounts to the number of days the shutdown lingered. They also teamed up with other local breweries to launch “Pay it Furloughed.” The program, created by Mess Hall founder Al Goldberg and City Paper contributing writer Nevin Martell, allowed Washingtonians to buy local craft beers for furloughed feds. Lines of federal workers formed daily at &pizza’s many locations as they offered free pies for feds from 6 p.m. to 8 p.m. City Winery heavily slashed their prices, offering $1 glasses of their house made wine for those with a government ID.
Fast forward to March 30, 2020, 430 days after the end of the last federal government shutdown, when Mayor Muriel Bowser issued the city’s stay-at-home order. Hospitality industry owners and employees barely had time to brace for it. Massive layoffs occurred overnight, employees were left to navigate an outdated unemployment filing system, and employers scrambled to figure out how to survive in what they thought would be the short term.
Restaurant owners believe it’s time for the federal government to return the favor and pass a stimulus package with aid targeted specifically to restaurants, such as the Real Economic Support That Acknowledges Unique Restaurant Assistance Needed To Survive, or RESTAURANTS, Act.
Espita managing partner Josh Phillips says he saw an 88 percent decrease in sales in the first week after the mayor closed restaurants for on-premise dining. “Nothing prepares you from that kind of loss,” he says. Comparatively, sales dropped about 8 percent throughout the longest federal government shutdown. “An 8 percent decrease in sales means tightening your belt, reducing hours a bit, and potentially digging into your cash reserve a bit if necessary. A government shutdown has an end sometime in the near future. It won’t result in a year plus of reduced sales [like the pandemic.]”
Phillips, who says his business has lost $1.2 million in revenue due to the pandemic, applies for most grants and other aid programs when they become available. The CARES Act prevented Espita from closing at the beginning of the pandemic. The Shaw Mexican restaurant also plans to apply for the newly launched Bridge Fund, though Phillips calls the $35 million targeted to local restaurants and other food-serving businesses a Band-Aid.
“Even if we get the maximum $50,000 grant, that is not going to replace the revenue losses we expect over the next four months,” Phillips says. “What needs to happen is the federal government needs to pass the RESTAURANTS Act.”
“Our employees shouldn’t have to put themselves at risk every day of getting very sick,” Phillips continues. “Many members of my team are honestly terrified, particularly as numbers spike. I should be able to go to a minimum staff to offer takeaway only, pay the ones that would be at risk to stay home, and still not have to close my doors. The only way we could do that though is if the federal government would pledge real stimulus money, like replacement revenue … The only people that have the power to protect our industry [is] the federal government.”
A number of other factors have made it more difficult for restaurants to operate 10 months into the pandemic as COVID-19 cases are spiking, including heightened restrictions on indoor dining seating capacities, a 10 p.m. cut off for on-premise alcohol sales, and falling temperatures making outdoor dining less desirable. Nearly 320,000 commuters are still being told to work from home, hampering lunch sales in some neighborhoods and severely diminishing the customer base for dinner sales in others.
Businesses such as The Salt Line and Bluejacket in the Navy Yard suffered a direct blow with the shortening of the MLB season. Nearby Department of Transportation employees have been encouraged to work from home if possible. Erik Bergman, director of operations for Neighborhood Restaurant Group, says that Bluejacket is much more reliant on lunch business during the Nationals’ offseason. Daytime diners typically account for 50 to 75 percent of business when Nationals Park is empty. He’s grateful for the support he’s received so far, but is looking for rent relief so he can operate Bluejacket and other NRG properties at reduced volumes with confidence.
Breweries and brewpubs like Bluejacket and DC Brau also need the federal government to step in or they too could be closed by this time next year. Mari Rodela, DC Brau’s chief community and culture officer, says PPP and EIDL loans “were absolutely imperative” and have helped many businesses survive. “But, unfortunately a lot of small businesses can’t take on extra debt and especially not right now,” she says. “The federal government could help by canceling rent, canceling taxes, allowing for additional SBA loan deferral, and other similar programs for a meaningful period of time.”
Like the RESTAURANTS Act, an essential congressional act vital to the brewing industry is in limbo. According to Rodela, the independent craft beverage community would benefit from Congress passing a continuation of the Craft Beverage Modernization and Tax Reform Act, which lawmakers passed in 2018. It expires at the end of this calendar year.
Rodela explains that CBMTRA recalibrated the federal excise tax for breweries from $7 per barrel to $3.50 per barrel for breweries who brew up to 60,000 barrels from January 1, 2018, to December 31, 2019. Last year, Congress extended that language through December 31, 2020. “It would be very difficult for our business and many businesses like ours to go through a tax increase in January 2021, while also seeing the decrease in sales that the pandemic has caused.”
While the industry chews its nails waiting to see if congress will act, there are plentiful ways for Washingtonians to support their favorite bars, restaurants, breweries, and distilleries. The basics include buying gift cards, purchasing merchandise as holiday gifts, and picking up take-out regularly.
That said, it should not be the responsibility of District residents to bail out their favorite hospitality businesses. “All of the power lies with the lawmakers elected to represent us,” Bergman says. “If you feel so compelled, write your representatives in Congress to let them know what restaurants mean to you in your life.”
Bobby Bump previously served as the head brewer for Right Proper Brewing Company for five years. He resigned during the pandemic to focus on parenting.