Texas has received more government loans than any state, but Dallas’ culinary future remains dire
In mid-March, Plano’s popular Holy Grail Pub was gearing up for the busiest weekend of the busiest month of its year. St. Patrick’s Day was there. But the coronavirus too.
“It got out of hand so quickly. We were told, “It was nothing, it was nothing” and then, boom, that was it, “says Brian Rudolph, who owns the pub with his wife, Christi.
25 miles south, the hugely popular Dallas St. Patrick’s Day Parade has been canceled in Lower Greenville. Public health officials then began limiting gatherings in North Texas. It didn’t take long to ban eating in restaurants and drinking in bars. Restaurants and bars rushed to offer take-out, but very thin margins forced many to close. Count the Holy Grail among these.
The restaurant industry is Texas’ second-largest private sector employer, employing at least 1.2 million workers. Industry surveys show that nearly two-thirds of these workers have been made redundant or on leave since the pandemic. Restaurants are not earning enough to cover the payroll, rent, taxes and the myriad of bills that remain. The federal government put in a relief program, but much of it missed smaller businesses, threatening the future of Dallas’ hotel industry.
The CARES (Coronavirus Aid Relief Economic Security) law, a $ 2 trillion economic relief program, was enacted on March 27. The CARES Act included the Paycheck Protection Program (PPP), a $ 349 billion fund to help keep small businesses like Holy Grail. Pub afloat during the pandemic. The program allows small businesses, especially those with 500 or fewer employees, to receive a forgivable loan equal to two and a half times the company’s average monthly salary costs. The loan will be canceled if the company uses at least 75 percent for salary costs.
Just under 9% of PPP loans went to the accommodation and food service sub-sector (few of which are true independent restaurants), according to the most recent Paycheque Protection Program Report. However, it is an industry that has suffered the most job losses. The national association of restaurateurs estimates that more than 688,000 restaurant workers in Texas have been laid off or on leave since the start of the coronavirus epidemic. That’s 61 percent of the state’s food industry workers.
In Texas, “84% of restaurateurs say they have laid off or put employees on leave,” says a recent Survey of the National Association of Restaurateurs. And according to the US Department of Labor’s Bureau of Labor Statistics, about 60% of the jobs lost in March were from restaurants and bars.
At the last report on April 16, Texas received 135,000 loans worth $ 28.5 billion. This is the most of any state. But it’s unclear how much went directly to the hospitality industry, especially small operators. It basically allows employers to provide dollars directly to their staff and pretty much without them having to file an unemployment claim with the government.
Jason Morgan, CEO of Original ChopShop and Bellagreen salad chains, has received $ 1.5 million in PPP loans for each of his brands. Of its 23 locations, 15 are in Texas and nine of them are in the Dallas-Fort Worth area. With the new money, Bellagreen in Plano reopened last Wednesday. Morgan took advantage of his existing relationship with his bank lender. Many hopeful applicants have reported difficulty moving on if they don’t have the same relationship.
“We’ve heard that a lot of people are having issues with the application process,” Morgan says. “We haven’t had this problem at all. His loan was approved three to four days after the application was filed in early April. The money arrived last week.
“We’re going to bring everyone back, the staff completely, find things for people to do, use hours to hand out flyers, curb delivery, internal delivery. [without third party services], “he said.” We’re going to find a reason to have people in the building. “
But for others, according to Shane Spillers, owner of Eno’s Pizza Tavern in Bishop Arts, Forney and Coppell, “it’s very difficult to justify bringing in employees to do a job that no longer exists… For a lot of companies. who are most affected by this to achieve the forgiveness requirement level for this loan to actually be forgiven. “
The Holy Grail Pub had 29 employees. “I’m paying six, that’s what I could afford,” says Brian Rudolph. Their application process was not as smooth as Bellagreen’s.
He wanted to apply immediately, so he reached out to his bank, Capitol One, to get things done. There were communication problems on the forms to be completed. The bank has promised to set up a portal to allow him to submit his application. He called every day until the bank was ready to deposit. When he submitted his application, it only took a day to get approval. Then the fund ran out of money.
“I was told we were in line,” he says. “We had to dip into my life insurance policy to stay liquid, and we’ll get there. It’s gonna suck spending a few years digging.
In the wake of the distribution of PPP loans, big banks are sued by small business owners, “who claim that large lenders have unfairly favored businesses seeking higher loan amounts under the government-backed paycheck protection program.”
The big chains were able to cash in while the small independent restaurants and bars were left behind. Of the PPP loans, six national channels received $ 81 million, reports Inside the business community. (One of these, Shake Shack repays $ 10 million loan.)
“We had to dip into my life insurance policy to stay liquid, and we’ll get there. “
Brian Rudolph, co-owner of the Holy Grail Pub
In the short term, local and state governments have started to experiment with ways to help. Texas Representative Rafael Anchia, D-Dallas, proposed that aid be combined with immediate action to improve stability: eviction delays, ban on utility cuts, tax credits.
“The short exhaustion of the PPP [shows] the need was even greater than expected by the congress, ”says Anchia. “There should be enough money to meet the needs, so we will need a fourth stimulus.”
Another round of PPP loans valued at $ 310 billion was approved on April 21, including $ 60 billion earmarked for small banks and community lenders, which will likely give previously excluded businesses a better chance of benefiting from funding. ‘financial relief. (This is not yet signed into law and there is no clear timeline at press time.)
Last week Anchia sent a letter to Governor Greg Abbott outlining steps such as banning the shutdown of utilities or foreclosing on the restaurant for missed rent. He wants to speed up tax credits so that staff can stay in place.
“It would generate liquidity. Money is king during the pandemic, ”said Anchia. “So giving restaurants more cash flow in the short term can give them the kind of lifeline they need to stay solvent until some semblance of economy comes back online.”
Dallas is, like so many American cities right now, part of a larger culinary movement that cherishes its unabashedly independent restaurants and bars. What put Dallas on the national radar were the visionary chefs who spoke through their food and the unique experiences they offered to diners. It was as if we had arrived.
Last year, Khao Noodle Shop was the darling of the food world, landing on top local and national lists. Owner Donny Sirisavath closed his Old East Dallas restaurant last weekend. Marie’s Kitchen, Dallas’ only brick-and-mortar Filipino restaurant, had applied for a PPP loan but was refused.
But it’s the small, independent restaurants that make our dining scene so vibrant. Rudolph wonders “what the landscape will look like afterwards.” I hear the optimism of friends. Is it bravado? I have a feeling it is.
Last Thursday, the James Beard Foundation and the Independent Restaurant Coalition published a poll of 1,400 small restaurant owners on the impact of the pandemic on the food and beverage industry. The results are disastrous. Nearly 80% of independent restaurant owners said government stimulus assistance under the CARES Act will not prevent more than half a million independent restaurants from permanently closing.
“I’ll be damned if we go out,” said Rudolph. “We have 29 families who depend on us.