More Help For Restaurants May Be On The Way, But It May Not Arrive In Time
The $900B government aid package passed by the U.S. Congress in December will include a roughly $280B lifeline to small businesses, but more will probably be needed while the coronavirus pandemic rages, according to commercial real estate experts.
This week’s election of two additional Democrats to the U.S. Senate increases the chances that additional help will be forthcoming.
The switch from Republican to Democratic control makes it more likely the $900B package, which also includes a $300 boost to unemployment benefits for 11 weeks, will be just the first step of many since spending packages can be passed with simple majorities, Severino said. And he believes there really isn’t any other good option, as the pandemic is choking off the economy in a way never seen before.
“In a normal recession, you don’t have people afraid to go out to restaurants and bars or go on vacation,” Severino said. “So, being politically agnostic about it, the economy can’t fully correct itself and get back on track without government support.”
Severino said sustaining small businesses, especially restaurants and other retail outlets forced to close or reduce operations due to health and safety restrictions, shouldn’t take a trillion dollars. He estimated that an additional package of perhaps half that would help until mass vaccinations take hold and businesses can start to resume something resembling normal operations.
“Businesses are going to have to endure the first six months of the year,” he said.
Chicago restaurants may have an advantage over those in other cities, Severino said. Chicago’s wide streets and sidewalks have given many the opportunity to use outdoor dining to supplement their takeout and delivery operations, something far more difficult in the dense environments of cities such as New York and Boston.
“I feel like Chicago has the ability to capitalize on that better,” he said.
But Chicago restaurateurs that have taken advantage of the surrounding sidewalks say the strategy does not guarantee survival.
Phillip Waters, owner of The Bristol at 2152 North Damen Ave. on Chicago’s North Side, said he has kept the 100-seat restaurant open the past 10 months by hosting diners outside, even after winter arrived. That has kept some people employed, but the business, which he opened 12 years ago, has been hit hard.
“Our restaurant’s revenue is down 75%,” he said.
Diners still come out most evenings, but the cold weather has made it tougher, and the two-story restaurant only has six outdoor domes that host two to four people and a tent that holds three tables. Waters employed 45 people at the site in 2019, but only nine are left.
“That troubles me, and keeps me up at night,” he said. “We’re doing our best to do what our elected officials tell us to do, but with no end in sight, something is going to have to give.”
He added that he’s glad the U.S. Congress passed a measure that will boost aid, and he plans to apply for any assistance that becomes available. But Waters isn’t counting on it, and he said any federal or state aid will only get the restaurant through the first two quarters.
“As an industry, there is no guarantee. Nothing else has been teed up, and with Washington being a big hot bowl of craziness, we may be on our own,” he said. “You’re going to see a lot of restaurants go away.”
The restaurant applied for other loans and grants in 2020, but it was turned down.
“We’ll try again, but we’re batting zero,” Waters said.
The only thing to get restaurants through this time is to allow those that can provide a safe environment to open up, he said.
“I’ve completely retrofitted my restaurant with a new air filtration system that’s as good as the ones they use in hospitals,” he said.
The Bristol has spent about $15K on the new system, including table-top ionizers and sterilizing foggers, and instituted strict cleaning and disinfection procedures.
“It all added up, and we did it for all the right reasons, but now we’re sitting here with all this stuff, and we can’t use it,” he said.