Opinion - Politics

Op-Ed: Local bars and restaurants face extinction because of coronavirus – and government needs to step up

Derek Brown, bar owner and author
Key Points
  • Independent bars and restaurants found some relief in the Small Business Administration's Paycheck Protection Program, which offers low interest, short-term loans with the potential of forgiveness. That is not nearly enough, writes author and bar owner Derek Brown.
Massachusetts Gov. Charlie Baker is seen on the television conducting a news conference on the coronavirus at Kellys Irish Times on Capitol Hill on Tuesday, March 24, 2020.
Tom Williams | CQ-Roll Call | via Getty Images

Bars and restaurants share a lot in common. Often they both serve drinks and many restaurants have bars, too. The same is true for food.

When I visit Erin Rose in New Orleans, I crave a muffaletta sandwich or, at Trick Dog in San Francisco, their signature "Trick Dog" (a burger in a sesame seed hot dog roll). Then there are bars and restaurants that blur the distinction by serving culinary cocktails such as Aviary in Chicago or BarMini in Washington, D.C.

There is one other thing independent bars and restaurants have in common: they are both facing extinction. 

In a survey by the Independent Restaurant Coalition, for which I serve on a subcommittee, 80% of bars and restaurants surveyed believe they cannot reopen after the pandemic without help. I can relate as an owner of the Columbia Room in Washington, D.C. We may be luckier than most, but we are facing the real prospect of losing our business.

To-go cocktails and a charity-based food pop-up have helped us regain some ground and rehire a few employees. But, without rent relief, business interruption insurance payouts, and a stabilization fund, there is little chance that we will enter a full year in the books.

An alcohol takeout sign hangs on the bar at Chef Geoff's restaurant in Washington, D.C., U.S., on Thursday, March 26, 2020.
Andrew Harrer | Bloomberg via Getty Image

Scarier than the revenue we are down now is the percentage we expect to be down for the foreseeable future. There will be seat reduction required to facilitate social distancing and a lack of consumer confidence. To be frank, it is scary walking into a bar where bartenders look dressed for surgery and door people are taking temperatures as well as IDs.

We found some relief in the Small Business Administration's Paycheck Protection Program, which offers low interest, short-term loans with the potential of forgiveness. That relief is not nearly enough.

According to the IRC and James Beard Foundation, only 9%of the $349 billion offered in the first round of PPP went to independent bars and restaurants. That is despite those bars and restaurants accounting for 60% of lost jobs. Together, we employ 11 million people. Chains and corporations took the lion's share of the first round, including Fiesta Restaurant Group who received $15 million in loans, though they produced $660.9 million in revenue in 2019. (The company said it would give back the money.)

With the second round, which went into effect last week, there remains much uncertainty, and other needs that have not been addressed. Bars and restaurants took the initial brunt of the impact because we are consumer-facing. Even as we reopen, the prospect of being busy seems unlikely. There will be social distancing regulations and tiered opening.

Megan Kyker assists a customer at Cotton & Reed rum distillery in Union Market on Friday, April 3, 2020. Many bars and restaurants are open for takeout orders during the coronavirus outbreak.
Tom Williams | CQ-Roll Call via Getty Images

Meanwhile, some landlords and lenders pretend that the pandemic is only happening to us. Not all, mind you, but many are unwilling to share the pain financially that we are taking with the forced closures of our business and ongoing restrictions.

We are all in business together and rely on each other for survival. Empty storefronts help no one. Bars and restaurants need rent abatement while they are shuttered and to renegotiate the terms of their leases in the face of unprecedented losses.

We have also been hung out to dry by insurance companies. We believed that our business interruption coverage covered forced closure by the government. It did not, according to insurance companies, basing their claims on often confusing clauses that allow room for ambiguity or even contradict each other. Bars and restaurants are fighting back by taking insurance firms such as Hartford Insurance to court in class action suits. We believe that we should not leave it to insurance firms to interpret contracts for their own benefit. Discernment is better left for the courts.

And, lastly, through organizations like the IRC, independent bars and restaurants are hoping to establish a $120 billion dollar stabilization fund. This grant would help bars and restaurants reopen. On top of the financial hit we have taken from rents, utilities, and past due bills, there will be upfront costs to reopening our spaces.

Chairs and tables are seen outside a closed restaurant in Washington D.C., the United States, on April 24, 2020.
Liu Jie | Xinhua via Getty Images

There is one last thing bars and restaurants share in common. We are the places where love, friendship, joy, and solace happen. In a recent tweet, I asked people to recall their favorite recollections of bars. They wrote of their memories meeting their spouse, getting engaged, celebrating victories, meeting life-long friends, mourning tragedy, and just grabbing a seat at the bar after a hard day at work.

We have served so many people; it is hard work but it is also rewarding work. All we want is to do our job. Without ongoing help, I fear that we will not be able to. And, though the pandemic has caused our temporary shutdown, our landlords, insurance firms, and the government may be the reason we close for good. 

Derek Brown is president of Drink Company, an owner and founder of the award-winning cocktail bar, Columbia Room, in Washington, D.C. and author of Spirits, Sugar, Water, Bitters: How the Cocktail Conquered the World. He is also a spirits judge at the prestigious San Francisco World's Spirit Competition and works with many charities and organizations in a role as advisor. Follow him on Twitter and Instagram @ideasimprove.