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Financing

Independent restaurants to Congress: We need $120B to stay alive

The newly formed Independent Restaurant Coalition is asking for a stabilization fund that would not be able to be accessed by large chains or publicly held companies.

Stressing that loans are not a long-term solution to their ongoing struggles, a coalition of independent restaurant operators called on Congress on Wednesday to create a $120 billion stabilization fund to help them weather the coronavirus crisis.

Chefs Jose Andres, Nina Compton, Andrew Zimmern and others representing the 51,000 members of the newly formed Independent Restaurant Coalition called the existing Paycheck Protection Program an “eight-week band-aid” that won’t address the complete reconcepting necessary, particularly for independent restaurants.

“This is a crisis unlike anything anybody has seen,” Sam Kass, a chef and political adviser, said during a press conference. “We’re trying to figure out how to dig ourselves out of this hole and set up an economy to make it through this. … The big fight is starting right now. Even though it’s a long shot, it’s still a real shot.”

Under the group’s proposal, the $120 billion stabilization fund would not be available to publicly held companies, large franchise groups or restaurant brands with more than 20 units under the same name. Marginalized communities would receive priority access. Bars and wine bars would be allowed to receive money. And, the group said, the fund should last through the remainder of the year, allowing independent operators to revise their business models for diminished dining room capacity.

The country is home to more than half a million independent restaurants, which employ 11 million people, according to statistics cited by the coalition.

Independent restaurant operators have been particularly hard hit by COVID-19. According to a recent James Beard Foundation survey, independent operators said they’d laid off 91% of their hourly workforce and 70% of their salaried employees. Just 1 in 5 restaurant owners who were subject to state-mandated dine-in shutdowns said they were very certain or somewhat certain they could keep their businesses running.

Compton, who runs Compere Lapin and Bywater American Bistro in New Orleans, said she will need to completely rethink her business model to suit social distancing guidelines once her dining rooms are allowed to reopen.

“I have to reconceptualize my restaurant on what makes sense,” Compton said during the press briefing. “We’ve run the numbers a thousand times, and it’s daunting because the bottom line is $1,300 for the year or whatever it is. It’s scary. Do I reopen or can I reopen? Is it worth it to dig myself deeper in a hole, taking on a loan I can’t pay back? The economy will take a very long time to bounce back.”

Andres, a restaurateur who has gained worldwide acclaim for his humanitarian efforts, said the fund would help make the creative ideas of restaurant operators a reality. One such idea, cited by Andres, is allowing restaurants to temporarily take over empty city streets for socially distant al fresco dining.

“The streets of America should become the new restaurant space we all need,” he said.

Naomi Pomeroy, who owns 26-seat Beast in Portland, Ore., said she would use funds from the proposed stabilization program to help hire back staff and rethink her concept.

“We have two communal dining tables in a tiny open space,” Pomeroy said. “Nobody is going to be clamoring to sit at a communal table. I need to restructure my whole plan.”

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