‘It’s a dire situation’- Restaurants push Congress for direct relief to save the industry as restrictions tighten

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RICHMOND, Va. (WRIC)- The latest bipartisan coronavirus stimulus package leaves out a direct relief fund for independent restaurants. Some fear a lack of urgency could push small businesses over the edge as rising cases prompt new restrictions nationwide.

Two Virginia lawmakers–Sen. Mark Warner and Rep. Abigail Spanberger–were among the lawmakers behind the compromise announced earlier this week. They both described it as Congress’s best chance at getting something passed before Christmas.

The $908 billion framework includes $288 billion for another round of Paycheck Protection Program loans. Not included is a revitalization fund to prevent what some have called a “mass extinction” of small businesses. The RESTAURANTS Act would give certain owners grant money that could be used to cover various expenses including payroll, benefits, food, maintenance and utilities.

“The Problem Solvers Caucus proposal will not solve anything for the hundreds of thousands of neighborhood restaurants facing permanent closure this winter,” said Kevin Boehm, co-founder of the Independent Restaurant Coalition, in a statement.  “This proposal is a band-aid on a bullet wound until restaurants and bars can generate more revenue.”

The $2.2 trillion HEROES Act, supported by most House Democrats but rejected by Senate Republicans, included $120 billion to help independent restaurants and bars with fewer than 20 locations. The Senate has discussed a slightly different proposal in past negotiations.

While the latest bipartisan stimulus package doesn’t include the fund, a separate bipartisan group is now calling for the RESTAURANTS Act to be passed independently. As of this week, 50 senators have announced their support. Rep. Spanberger was among lawmakers from both chambers who sent a letter pressuring House and Senate leadership on Friday.

“The food and beverage industry is still down 2.3 million jobs since the pandemic began, a number that is sure to rise with increasing infection rates and new restrictions,” the letter said. “Despite bearing the brunt of this economic crisis, independent restaurants have received no directly tailored federal aid.”

Liz Kincaid co-owns Tarrant’s Cafe, Tarrant’s West, Max on Broad and Bar Solita in Richmond. Since the pandemic started, she said they have had to lay off more than half of their 300 employees.

“There are several of our restaurants that would lose less money by being closed. When I look at the numbers, that’s what it tells me. We should be closed,” Kincaid said on the brink of tears. “But then I look at our staff and think, how could we do that?”

Kincaid said the thing that they need most to keep their doors open is direct aid–without strings attached. She’s worried the RESTAURANTS Act will get put off until next year or that it won’t get passed at all.

Kincaid said they received about $1 million in PPP funds that ran out about two weeks ago between five total businesses. So far, she said one of the five loans had been forgiven, but she’s still waiting on the others–with $700,000 still on the books in the meantime.

“If they don’t give us relief, I’ll just give them the keys to my restaurant right now and call it quits because there is no point in trying if we’re saddled with that much debt,” Kincaid said. “I lie awake every night, worried that it is not going to be forgiven.”

Virginia Restaurant, Lodging and Travel Association Government Affairs Director Robert Melvin said the failure to pass a revitalization fund soon could devastate the industry and the broader economy.

Melvin said there were about 15,750 restaurants throughout the state prior to the pandemic.

“We anticipate 25 to 30 percent of those have already permanently closed,” Melvin said.

Melvin said a September survey of 185 of their members in Virginia paints an even grimmer picture, with 58 percent of operators saying–if they didn’t get relief within six months–they too would have to permanently close.

“It’s a dire situation,” Melvin said.

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