Restaurant Closings Could Accelerate As Winter Sets In And COVID Restrictions Squelch Business
Unless another round of federal aid to small businesses is approved soon, Gov. J.B. Pritzker’s order to shut down indoor dining statewide starting Nov. 4 could wipe out thousands of Illinois restaurants, industry officials say. The original ban on indoor dining was lifted in stages over the summer, but a late autumn wave of coronavirus infections led Pritzker to reimpose a shutdown, and restaurants now face a long winter with few customers or prospects.
“We’re not really making it,” Italian Village proprietor Gina Capitanini said. “Every day is a loss and every month is a loss.”
Capitanini represents the third generation of her family to run Italian Village, founded by her grandfather, Alfredo Capitanini, in 1927. The city’s oldest Italian restaurant, it is actually three restaurants under one roof at 71 West Monroe St. in the Loop. It became known for hosting opera singers, politicians and visiting celebrities, as well as its re-creation of the Tuscan night sky in the upstairs space.
Italian Village employed as many as 130 people just before the crisis. But after seven months of the coronavirus, it is now down to about 24 employees, and the near future seems threatening, Capitanini said. It still serves customers through carryout and delivery, but losses now run about $150K per month, and the family is financing operations with its own money.
“We never thought seven months into this we’d be in the same place,” she said.
But Capitanini isn't ready to quit.
“I guess I haven’t gotten to that point,” she said. “I must be crazy because every other restaurant in the Loop is closed, but we’ve been in business for 93 years, plus I have employees who have been with us for 40 years, and they’re loyal to me, so I’m loyal to them, even if it means I’m losing my ass.”
Chicagoland’s restaurant landscape could look very different by springtime, Illinois Restaurant Association CEO Sam Toia said. Eateries facing permanent closure range from startups with just a few tables to established landmarks. His organization is asking the U.S. Congress to pass the RESTAURANTS Act of 2020, which would funnel $120B in grants to food service operators crushed by the pandemic. But the legislation is stalled, and without federal help or modifications to the state’s indoor dining ban, the situation is bleak.
“We’re in the Midwest, and the weather is getting brutal, so outdoor dining is not going to cut it,” Toia said.
Morton’s The Steakhouse on Tuesday closed its original location at 1050 North State St., where it had operated since 1978, according to Crain’s Chicago Business, and COVID-19 restrictions are likely to shutter other well-known restaurants. According to the National Restaurant Association, 66% of Illinois restaurant proprietors surveyed said under current conditions, they won’t make it through the next six months.
Illinois restaurants employed 594,000 people at the beginning of this year, according to Toia. By April, 321,000 were unemployed. At the end of September, the loosening of restrictions improved the situation, but 140,000 were still out of work.
Pritzker and his top public health officials say the move to ban indoor dining, along with the closure of casinos, theaters and museums, is necessary to stem a deadly tide of infections, now occurring at an even faster pace than last spring, when a more comprehensive lockdown was ordered.
“As painful as it is, we must do what we can to avoid another shutdown order,” the governor said at a Wednesday press conference.
The Illinois Department of Public Health reported 14,612 new confirmed and probable cases of COVID-19 Thursday and an additional 168 deaths. The state also reported a total of 11,178 deaths in 2020 and 621,383 total cases.
Toia isn't pushing to completely open the state’s restaurants. He pointed to a study published last week by Northwestern University and Stanford University in which researchers found limiting businesses to 20% capacity would cut the number of coronavirus infections by 80%.
“There should be some limitations on indoor capacity, and we agree with that,” Toia said.
Operating with indoor dining limitations was a lifeline for Italian Village, Capitanini said. A loan from the Small Business Administration’s Paycheck Protection Program had cushioned the first blow. And in the summer, new state rules allowed up to 50 people inside the 200-seat restaurant. The business could then at least break even on Fridays and Saturdays, and monthly losses were limited to around $50K to $75K.
“That gave me a feeling of security and a sense of hope,” she said.
But state officials have also cited the Northwestern study, arguing it bolsters the case for drastic measures.
“Reopening full-service restaurants has the largest predicted impact on infections, due to the large number of restaurants as well as their high-visit densities and long dwell times,” the researchers found.
State officials also point out that the disease’s spread is accelerating. Wednesday’s 14,612 new cases was nearly six times the rate seen at the last height of the pandemic in the second week of May.
“We can all see it’s not working and we’re going in the wrong direction,” Illinois Public Health Director Dr. Ngozi Ezike said at Wednesday’s press conference.
“Without new interventions, projections show between 17,000 and 45,000 additional deaths in Illinois between now and March 1, 2021, assuming hospitals are able to continue providing the optimal level of care,” the governor said.
Toia said permanent restaurant closings could start to pile up quickly, leaving many neighborhoods stripped of gathering places that provide employment and help bind families and communities. And even though the state and Mayor Lori Lightfoot’s administration launched programs to help struggling small businesses, neither has the resources to address the problem.
“We need the federal government to act on this in the next week or so,” he said.