Independent restaurants getting economic relief they desperately sought

On Saturday, as many Americans were enjoying a weekend, Tom Colicchio was on a Zoom call with about 30 members of the Independent Restaurant Coalition. They were watching the Senate vote on the American Rescue Plan Act of 2021, the $1.9 trillion package to provide economic relief for millions of businesses and individuals, including the ailing restaurant industry.

Shortly after noon, senators passed the bill along party lines, all but ensuring that once the U.S. House votes on the Senate-amended rescue plan, which it is poised to do Wednesday, independent restaurant operators will see some targeted relief money, to the tune of $28.6 billion. For the Independent Restaurant Coalition, or IRC, which formed as the pandemic was just sinking its teeth into the American economy, the vote capped a grueling, year-long effort to seek direct grants for a hospitality industry that in the past 12 months has shed 2 million jobs, lost an estimated $240 billion in revenue and seen 110,000 establishments close.

“The cheers went up” when the Senate passed the bill, said Colicchio, the chef, restaurateur and founder of Crafted Hospitality, a restaurant group based in New York City. “There are so many independent restaurants that are going to get a lifeline and stay open, and that will be great for the economy, for employment.”

When its founding members first started talking in mid-March of last year, the IRC seemed, in some ways, a redundant effort. A fair number of independent restaurateurs, including Colicchio, already belonged to state restaurant associations that are, in turn, connected to the National Restaurant Association, and the 100-year-old organization says it advocates for every kind of operator: independent, chain and franchisee.

But there have long been tensions between the National Restaurant Association and independent restaurateurs who say, whether right or wrong, that the national organization cares more for the major players in industry, not the little guys. “Do you trust Big Tobacco?” chef and restaurateur David Chang told The Washington Post early in the pandemic. It was a question posed as criticism.

Even before states and cities started to clamp down on indoor dining last March, small operators had an early, street-level glimpse of the future: empty dining rooms, dwindling revenue, mounting debts, laid-off workers and, eventually, closures. The early predictions were ugly: Colicchio suggested a year ago that 75% of restaurants in America could be history without government intervention. People started referring to an “extinction event” with restaurants, particularly among mom-and-pop operations with no access to bank loans or investment capital.

Survival instincts kicked in among independent restaurateurs. There was a sense among many that they could not sit around and watch their investments and their businesses just shrivel up and die. They wanted to play a role in their survival. With no dues to pay, and with only a 20-member advisory board providing direction, the IRC provided an immediate way for many to step up and become their own advocates during what will probably be the worst period in their business lives.

“It was very empowering and, for me, one of the most important things that happened this year,” said Sue Bette, owner of Bluebird Barbecue in Burlington, Vt. “I felt like I had a role to play, and I could do something. I could serve our industry and be part of a team that was making change in a real grass-roots way.”

Like countless other members of the IRC, Bette conducted a lot of outreach and made calls to political offices. A year ago, she co-founded Vermont Independent Restaurants, a coalition of more than 180 restaurant and bar owners who advocate for their industry in the state. “I really started to understand that we are really built into our communities in a way that no other businesses is,” she said.

The IRC did not work on targeted restaurant relief alone. The National Restaurant Association had also been working on the issue from the beginning. On March 18, the National Restaurant Association sent a letter to the White House and leaders of Congress, urging the Treasury Department to create a $145 billion Restaurant and Foodservice Industry Recovery Fund. The organization has been working on other pressing issues, too: federally backed business-interruption insurance, immigration policy changes, tax credits, the tip credit, minimum wage increases and other matters.

“We represent the entire industry,” said Sean Kennedy, executive vice president of public affairs for the National Restaurant Association. “We represent everybody from the corner diner to the steakhouse to the regional chain and everything in between.”

The National Restaurant Association’s wide range of advocacy issues, in some ways, inspired members of the IRC to take matters into their own hands. The IRC had a singular focus: to “get independent restaurants and bars the support they need to survive,” noted executive director Erika Polmar, a food activist. That mission would guide the IRC’s actions and decisions, many said.

“We had this one common goal,” said Robert St. John, the Mississippi chef and restaurateur behind Crescent City Grill, Tabella and other establishments. “There weren’t all these balls that we were trying to keep in the air at once. It was ‘We got to do whatever we can to get some relief to independent restaurants,’ and that was it.”

With about 100,000 members, the IRC drew expertise and personal relationships from across the country. St. John, for instance, was able to tap into his relationship with Sen. Roger Wicker, R-Miss., a regular at the chef’s restaurants, to urge him to get behind the Restaurants Act, which would serve as the basis for the Restaurant Revitalization Fund in the American Rescue Plan Act. Wicker would, along with Sen. Kyrsten Sinema, D-Ariz., introduce the Restaurants Act in the Senate.

With its celebrity chef cachet, the IRC would also push for a seat at a May 2020 roundtable on restaurants at the White House, despite the fact the organization had not made the kind of political donations that usually give lobbying groups access to power. The first round of Paycheck Protection Program loans, a percentage of which went to large chains, did give independents some leverage, not just with the White House but also with Congress. Politicians, said Colicchio, were embarrassed by the amount of PPP money that went to large companies and chains.

“We started working with the Portland restaurant community early in the pandemic, and it grew into an essential partnership with the national Independent Restaurant Coalition, the best partner I could have imagined during this year-long effort,” Rep. Earl Blumenauer, D-Ore., said in a statement.

The aid “soon heading to local restaurants is a direct outcome of this partnership and the tireless work of our Portland restaurant community, the Independent Restaurant Coalition and the thousands of restaurant workers who joined forces with us to get relief over the finish line,” added Blumenauer, who introduced the Restaurants Act in the House.

The reward for the IRC’s efforts is the Restaurant Revitalization Fund, a $28.6 billion pool that’s restricted to operators with 20 or fewer restaurants (although the National Restaurant Association successfully lobbied to include chain franchisees among those operators, as long as they own fewer than 20 storefronts). Unlike PPP loans, which required most of the cash to go toward payroll, business owners have more latitude in how they spend revitalization funds. It could not arrive at a better time for many restaurateurs, who have been accumulating debt during the pandemic.

Take Nya Marshall is a commercial real estate developer and restaurateur in Detroit. She owns Ivy Kitchen and Cocktails, as well as a catering operation. To keep the doors open during a pandemic, Marshall has taken out loans, refinanced a home, asked for extended credit and delayed tax payments.

“Most of the money will be spent to pay debt that we owe because no revenue was pretty much generated in 2020,” Marshall said. “We haven’t paid our quarterly taxes in I don’t know how long.”

Debt is a common theme among restaurateurs awaiting relief. Colicchio mentioned it. St. John mentioned it. The bills—from suppliers, from landlords, from banks—have been adding up, even as revenue have not. Is it any wonder, then, that St. John, when he was in New Orleans for a short break, had a celebration of his own when he heard the Senate passed the relief plan? He was in the French Quarter at the time and saw a jazz band on the street.

St. John approach the musicians and asked whether they knew “Happy Days Are Here Again.” “The trombonist knew it, and he taught the other guys real quick. I dropped a 20 in the hat,” he said. Then St. John recorded the impromptu song and shared it, via FaceTime, with members of the IRC.