Coronavirus: Hard-hit Clark County restaurants looking to $28.6 billion relief fund for lifeline

Apr. 18—Restaurants in Clark County hit hard by the coronavirus pandemic may soon be offered a lifeline as a new federal fund is slated to provide the industry billions of dollars in relief nationwide.

The news comes as over a trillion dollars in additional coronavirus relief was signed into law last month by President Joe Biden in the form of the American Rescue Plan Act.

As a result, a new fund has been created to offer support to restaurants that are still feeling the economic impact of the pandemic as some struggle to remain afloat.

The $28.6 billion Restaurant Revitalization Fund has been set up to help restaurant owners with 20 or fewer locations by providing tax-free grants.

Those operating local restaurants can apply for up to $5 million per location, or up to $10 million for multi-location operations, according to the National Restaurant Association.

The amount owners can receive is determined by subtracting 2020 sales from revenues reported in 2019, this news organization previously reported.

The fund comes as many local restaurant owners have not fully recovered from the pandemic, said Mike McDorman, the president and CEO of the Greater Springfield Partnership.

The past year has seen a drop in revenues for a number of local restaurants. In some cases, the coronavirus also caused a complete change in how they operated, with many having to rely significantly on carryout or delivery options.

"Many were hit really hard by all of this and (those restaurants) are just now starting to see business pick back up," McDorman said. "This assistance will be very important as (those restaurants) start to see (customers) coming back."

McDorman said it will be very important for local restaurants to have access to cash as they strive to fully reopen their operations and return to 100% capacity.

The pandemic brought with it many challenges, including temporary shutdowns and a temporary ban on in-person dining due to a statewide stay-at-home order.

Many restaurants, some without any formal backup plans, had to quickly adapt to the situation and restrictions coming from state officials.

That included Springfield restaurant Speakeasy Ramen, which had to transition quickly to a carryout only model throughout March through May of 2020. In-person dining was prohibited in the state during that time due to safety protocols related to the pandemic.

That was a huge change for Speakeasy Ramen, which was primarily a dine-in restaurant and bar that began serving food in 2019, said the restaurant's owner Kimberly Frazier.

"The biggest impact was the stress. When the governor shutdown dining rooms, we did not have a backup," Frazier said.

"Restaurants got hit pretty hard. The changes were immediate. We had to do our own pivot," she said. "Within 24 hours, we had a whole plan of how we were going to be a carry-out restaurant. It allowed us to stay in the game. But it did hurt us."

The pandemic also caused Speakeasy Ramen to look at delivery options such as DoorDash as well as expand its outdoor seating.

McDorman said that a number of restaurants saw hits to their revenues last year due to having to rely largely on carryout, curbside pick and delivery or just by seeing a general decline in patrons.

Options such as carryout and delivery also brought on additional costs for local restaurant owners.

Though in-person dining has returned, many restaurants are still unable to operate at full seating capacity.

Darin Mitchell, chef and co-owner of Stella Bleu, said his restaurant had to close twice during the pandemic. The first time came due to the state stay-at-home order in March 2020 and the second time occurred in November due to a significant drop in business.

The first decision to close was due to limiting overhead costs as well as the fact that a carryout model would have not been a good fit for the business, Mitchell said, noting that a main draw for his customers is the higher-end dining experience.

Mitchell stated that if the business remained open during the initial ban on in-person dining, his establishment would have lost too much money.

When the business reopened, customers were not rushing back as the pandemic made people less comfortable eating out. A shift to remote work for some downtown businesses also impacted the restaurant's lunch crowd.

"The first week is this sort of honeymoon phase and then that goes away. The bad thing is that I can't do anything else to make people come out," Mitchell added.

Stella Bleu closed its doors again in November due to the decline in business because of the pandemic. Mitchell said they started selling meals that could be taken home and baked this year and the restaurant reopened its doors for dining again in March.

Foodservice sales have fallen nationally by $255 billion and 110,000 restaurants have closed since March 2020, according to the National Restaurant Association.

Restaurant Revitalization Fund grants will be distributed by the Small Business Administration and can be spent on a wider range of expenses than previous relief programs such as the Paycheck Protection Program that rolled out in April 2020.

The fund will cover costs that include mortgages or rent, utilities, supplies, food and beverage inventory, payroll, and operational expenses. In addition, $5 billion dollars of the fund will be set aside for restaurants with gross receipts under $500,000.

Though the Paycheck Protection Program provided much needed support for small businesses, that money was mainly for payroll but could be used for rent and utilities.

Mitchell, whose business has applied for two PPP loans, said that program provided relief by covering payroll as well as some other expenses during the loan period, which can be completely forgiven.

However, he said that more relief money directed to local restaurants is crucial as many are still hurting.

He added that future funds should be allowed to cover more expenses associated with running a restaurant, not just limited to payroll and rent.

Mitchell said he has lost 30% of his seating capacity due to safety protocols and though things have improved businesswise since last year, the impacts of the pandemic continue to be felt.

Fraizer said that her business began turning a profit again in February after breaking even during the prior months. She said business has improved but it will still take time before a full recovery occurs.

Facts & Figures

$28.6 billion: Amount of money in federal Restaurant Revitalization Fund

110,000: Number of restaurants that have closed since the pandemic started

$255 billion: Amount lost in foodservice sales during the pandemic