Local restaurants fight for customers, federal funds

Can your favorite local restaurant survive?

This is proving difficult and so far Washington has not been inclined to provide much more new aid.

There was some hope for the money in the big spending and tax package President Joe Biden unveiled on Thursday, but there wasn’t. Biden’s US bailout in March provided $ 28.6 billion to help restaurants, but that was not enough and generated legal controversies.

Without more funding, “Congress and the Biden administration are leaving nearly 200,000 businesses at risk of permanent closure,” said Erika Polmar, executive director of the Independent Restaurant Coalition.

The reopening of many restaurants in California was “just the very beginning of a long road to recovery. We expect that some of the restaurants that have managed to survive the immediate impacts of COVID will not survive the longer term impacts they are currently experiencing, ”said Sharokina Shams, vice president of public affairs for California Restaurant. Association.

Shams listed a host of issues: a worker shortage that is forcing restaurants to limit their opening days and hours, soaring costs for labor, food and supplies, as well as debt that the company was able to contract during the months of its closure.

Washington money?

“We thought September would be back to normal,” said Chris Hillyard, who, with his wife, owns Farley’s Coffee in San Francisco’s Potrero Hill neighborhood and Farley’s East in downtown Oakland.

Instead, restaurants these days often struggle to survive. “We still don’t know when this (COVID) thing is going to go away,” said David Nayfeld, San Francisco-based restaurant owner and member of the National Advisory Board of the Independent Restaurant Coalition.

The Hillyards, which run two California restaurants, are feeling the sting of the economy. They were in dire need of financial help to survive the COVID pandemic, so when requests for federal assistance under the US bailout became available earlier this year, they applied within minutes.

Things looked good. They got the priority because it’s a women-owned business, and within days they were told they would get a six-figure grant.

Then weeks passed. Nothing. They checked with the Small Business Administration, which manages the programs. No need to worry, they were told.

They never had the money.

More than 2,900 restaurants that had been told they were receiving money from the restaurant fund have been cut.

The program simply did not have enough to help anyone seeking funding. It received 278,000 applicants, who wanted a total of $ 72.2 billion. The program ended up giving the $ 28 billion to 101,000 applicants. The average grant was $ 283,000.

California had 36,379 eligible applicants for the fund, and 15,988, or 43.9%, received a grant.

Lawmakers are still trying to replenish the fund with $ 60 billion, perhaps in other spending bills or separate legislation, as the economy has slowed.

Restaurant relief under fire

The March relief program received strong support from members of both sides. Restaurants, especially those owned by independent owners, are present in every congressional district.

The fund was intended to specifically help businesses owned by women, ex-combatants, “socially and economically disadvantaged” people and those who represented “many underserved communities”.

But the fondness for homeowners and underserved communities has triggered legal challenges.

America First Legal curator brought a case in texas which led to a preliminary injunction tell the SBA to review claims regardless of race or gender.

Stephen Miller, a former Trump administration official who is now president of America First Legal, said at the time that the order was “another powerful attack on the Biden administration’s unconstitutional decision to pick winners and the losers according to the color of their skin “.

The Wisconsin Institute for Law & Liberty also challenged the law this spring on behalf of several restaurants in the county, saying the distribution policy was “illegal and unconstitutional.” Racial and gender discrimination are not permitted by law.

A Federal Court of Appeal agreed in a shared decision. “As the government has failed to justify its discriminatory policy, the plaintiffs will win on the merits of their constitutional claim,” the court said.

The SBA has made changes. On June 14, he organized an appeal with thousands of small businesses approved for Restaurant Revitalization Fund funds that were suddenly unable to receive the money.

SBA spokesperson Christalyn Solomon said the call was “to express our frustration and explain that we remain committed to doing all we can to help underprivileged businesses get the help they need to get by. recover from this historic pandemic and restore their livelihoods “.

Appellants were told of other programs they could use if they were eligible, including Economic Disaster Loans and other programs.

But for the Hillyards, that meant their restaurants wouldn’t get the funding they promised. They were told this officially in an email on June 23.

Can Biden help the restaurants?

In late August, the California Restaurant Association joined with other similar groups across the country to tell congressional leaders their situation was becoming more and more dramatic.

“Nineteen percent of adults have stopped dining, while 9% have canceled their existing plans to eat out in recent weeks. For an industry that needs a full house every night to make a profit, this is a dangerous trend, ”the letter said.

Nayfeld described the California restaurant situation in harsher terms: “We’re trying to walk a very scary tightrope. “

When COVID first hit last year, restaurants in Hillyards closed. Other COVID-related government aid has helped, and the Hillyards have started mass-producing meals for those in need as well as frontline workers. This allowed them to bring back their 40 employees.

Today, the San Francisco site, which roasts its own coffee and sells its own pastries and empanadas, still doesn’t have indoor seating, but there is a plan. to add indoor tables soon. The Oakland Cafe, which serves breakfast and lunch, can now seat about half of its 45-person capacity.

This place, because it’s downtown, relies more on office workers, but “no one has gone back to work,” Hillyard said.

Now, he said, “We say very well, assess the situation in January and February and see what the new business environment will look like.

“We have funds, so we can continue to operate at a loss,” he said, “but we cannot operate at a loss forever. ”

This story was originally published October 30, 2021 5:00 a.m.

David Lightman is McClatchy’s chief congressional correspondent. He has been writing, editing and teaching for almost 50 years, with stops in Hagerstown, Riverside, California, Annapolis, Baltimore and since 1981, Washington.

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