Restaurants Need Bigger Help to Survive
Described as “the most romantic venue in San Francisco” the Black Cat was doing great—until COVID-19 shut it down. As an indoor restaurant that also offers high quality live jazz, the Black Cat is treated as an entertainment venue. So even when indoor dining is legalized—which likely will not happen in 2020—the Black Cat’s reopening depends on entertainment venues also getting the green light.
It’s a terrible time to be in the restaurant business.
As much as the media promotes positive stories about outdoor dining —-in San Francisco this means emphasizing Chinatown, North Beach and Valencia Streets—there is an unfortunate financial reality: few quality restaurants can survive without indoor dining.
It is projected that as many as 1/3 of the nation’s restaurants will permanently close due to the nation’s mishandling of COVID-19.
And while restaurant turnovers are common, COVID-19 has changed the entire economic model. Today, closed restaurant spaces will remain closed; the lack of indoor eating–or social distancing that greatly reduces indoor seating—makes the business impossible to sustain.
Cities can respond to this crisis in two ways.
They can do what San Francisco and almost all cities have done and promote outdoor dining, delay various taxes and fees, and work around the edges to keep restaurants open.
Or they can accept the gravity of the crisis and take much bigger actions to save restaurants. Like waiving all fees and taxes for at least the next ten years. Ending local code upgrade requirements that make renovating existing restaurants financially infeasible. Using city funding for a Design for Distancing program as is happening in Baltimore.
These are but a few big picture ideas to save a restaurant industry that city life desperately needs.
A Much Deeper Crisis
My troubling conclusions are based on conversations with restaurant owners and those in the industry. Many articles echo my concerns. It’s also understandable why there are also feel good stories about outdoor dining or a “street food revolution”—people need more dining out options now.
But for many cities, most prominently San Francisco, New York City and Los Angeles, indoor dining is an essential part of the cultural fabric. Outdoor dining is not feasible for much of the year and the revenue generated without indoor eating is not sustainable.
So cities have to help restaurants a lot more if they are to survive. And the assistance must be longterm as nobody knows how long the virus will impact business. It’s painful to recall that San Francisco and other cities planned to reopen indoor dining in July, only to have these plans foiled by the virus. Restaurants are increasingly accepting that indoor dining is done for 2020.
And when it may resume, and under what conditions in 2021, nobody knows. This very uncertainty has led many restaurants to decide to close permanently; owners see no end in sight.
My particular interest in saving restaurants is that the Tenderloin has always been dependent on three types of legal businesses: restaurants, bars and entertainment/cultural venues. All three require indoor business to survive.
Restaurants take up the most retail space. Clearing sidewalks of tents is critical to those that do takeout and outdoor dining, but many of these retail spaces will remain closed until indoor dining resumes. The upsurge in Tenderloin drug dealing is a direct result of this unopened retail space; legitimate daytime and nighttime activities have always been the best strategy for stopping drug dealing in front of retail spaces.
The Black Cat is fortunate to have building owners, Mike Amin and Tony Dumbhaila, who share a longterm commitment to the neighborhood’s future. They leased the space to the Tenderloin Housing Clinic at a reasonable rent and I connected with Fritz Quattlebaum, the visionary behind the Black Cat.
But some landlords will not be flexible. They will evict restaurants unable to pay their former rent. This will either lead to longtime vacant spaces or the end of restaurant use at the site—neither are good outcomes for cities.
That’s why cities must be more ambitious with financial relief than they have been to date. Restaurants often drive neighborhood economic revitalization, boosting attendance at theaters, museums and other venues. They, along with bars, foster the social interactions more important than ever in the wake of COVID-19.
I’s sure others have great ideas to save restaurants. We need to implement all of them now.Filed under: National Politics