WASHINGTON, D.C. — Two state restaurateurs joined U.S. Sen. Kirsten Gillibrand on Tuesday afternoon to advocate for the passage of a bipartisan congressional bill to help independent restaurant owners keep their businesses alive as the coronavirus pandemic continues.
The hospitality industry and restaurants have faced significant financial hardships in the wake of COVID-19, which forced nonessential businesses to close or limit capacity. Diners in New York continue to be limited to 50% restaurant capacity, meaning fewer customers and fewer needed staff at every meal.
During a virtual press conference Tuesday, Gillibrand urged her fellow senators to pass the bipartisan Real Economic Support That Acknowledges Unique Restaurant Assistance Needed to Survive (RESTAURANTS) Act of 2020. The RESTAURANTS Act would create a $120 billion Restaurant Revitalization Fund to address the long-term challenges of food service and drinking establishments and ensure they maintain operations, pay workers and remain open.
New York restaurateur David Chang, founder of Momofuku, author and culinary television personality, said passing the act to ensure financial relief for independent eating establishments is essential, and compared restaurants to banks, which officials were first to bail out during the 2008 Great Recession.
“Restaurants are banks; they support the people and the businesses in our communities and they keep our most precious cultural properties safe,” Chang said. “Culturally, they’re feeding and supporting the community around them.
“Independent restaurants are facing an extinction-level event, Restaurants will soon disappear by the thousands and all the individuals who depend on them will be left helpless.”
Ninety percent of restaurants’ revenue is put directly back into the community, Chang said, as money goes to cooks, plumbers, electricians, farmers, fishermen and other behind-the-scenes local businesses.
“Restaurants are the endpoint of a long chain of unseen effort,” he said. “We don’t mean dining culture needs help, we mean the millions of people who depend on restaurants for their livelihood need help.”
About 10% of the state’s population of 19.5 million people work in restaurant and food service jobs, with more than 115,000 workers in New York City. Industry staff is comprised of many immigrants, people of color and formerly incarcerated New Yorkers — communities hit hardest by COVID infections.
Roughly 11 million independent restaurant employees will lose their jobs without federal aid, Gillibrand said.
“This industry and those workers really need our help,” she said. “The RESTAURANT Act would provide it. ... The grants would help businesses like restaurants, food trucks, bars and lounges offset their losses in revenues for 2019 and projected revenues through 2020, with payroll, mortgage and rent.”
Chef Tom Colicchio, owner of Crafted Hospitality and founding member of the Independent Restaurant Coalition, said restaurants nationwide are financially hanging on by a thread.
“The current PPP (Paycheck Protection Program) legislation offered by Sen. (Mitch) McConnell is a short-term solution to a long-term problem,” Colicchio said Tuesday. “...We are OK with limiting our capacity to 25% even if we’re mandated to close because we know the only way to economically get this country back on track is to stop the pandemic first ... but we need help.”
Colicchio laid off about 470 workers in March when the pandemic began.
“We can’t play games anymore,” he said. “The Independent Restaurant Coalition fought to make sure our House bill has 203 co-sponsors, with 40 in the senate. ... Sen. McConnell, why won’t you support your own membership? You’re leaving us out in the cold and something needs to be done and something needs to be done right away.”
Restaurants need federal relief, Sen. Gillibrand said, as they help address food access and insecurity issues, which have heightened nationwide during the pandemic. Such establishments also provide business to local farms, fishermen and laundromats for linens, among others.
The pandemic has forced hundreds of businesses to close for good. Nearly 90% of state restaurant owners were unable to pay rent in August, the senator said.
“Even in a good economy, restaurants operate on slim margins,” Gillibrand said. “When a crisis hits, they do not have a safety net to rely on.”
An estimated 70% to 80% of U.S. independent restaurants are expected to permanently close without federal aid.
“Restaurants are hemorrhaging money,” Chang said. “Even the restaurants that look very busy are, at best, breaking even. Change in our business will not get better. We cannot have sustained survivability without legislation passed. It’s not going to happen. It’s an impossibility.”
The state’s coronavirus mandates, including requiring wearing face masks in public and remaining six feet from others, are expected to continue as long as the pandemic does, which health experts say will persist until the development and distribution of a safe vaccine through next year.
Many restaurants have relied on outdoor dining since the spring, but soon, New York temperatures will dip as winter nears, leaving diners to indoor or takeout options only.
“Most restaurants will not be able to operate to scale, if at all,” Gillibrand said. “Small businesses like restaurants are the lifeblood of our economy. They are anchors to our Main Streets and community hubs across New York. ... Our recovery plans must recognize the need for real relief is needed now more than ever.”
RESTAURANT Act funding could also be used to help restaurants purchase necessary PPE for staff and patrons and with constructing or maintaining outdoor seating during the pandemic.
The act would reserve $60 million for women-, minority- and veteran-owned restaurants.
“Restaurants are not like other businesses — they’re facing uniquely challenging circumstances and they need economic relief to make it though this crisis,” Gillibrand said. “There’s no reason this Senate should not provide it.”
When restaurants are gone, everyone will notice, Chang said.
“People need to understand how significant they are at keeping the best parts of cultures,” he added. “They are the safe deposit boxes where people store the knowledge, diversity and taste that makes America what it is.”