Independent Chefs and Restaurateurs Call on Congress for Better Stimulus Terms

Tom Colicchio standing with glasses on.

Tom Colicchio, along with other chefs and restaurateurs like Naomi Pomeroy and Kwame Onwuachi, is a founding member of the Independent Restaurants Coalition. | Photo by: David A.Grogan/CNBC/NBCU Photo Bank/NBCUniversal via Getty Images

“We are not looking for a bailout,” says Tom Colicchio. “We just want to make sure we all have a business to return to.”

The Independent Restaurant Coalition (IRC) is calling on Congress to rectify the recently passed $2 trillion coronavirus stimulus package in order to better ensure the survival of independent restaurants across the country in the wake of the COVID-19 pandemic. Recently founded by independent chefs and restaurateurs, the coalition is spearheaded by well-known industry figures such as Tom Colicchio, Naomi Pomeroy, Kwame Onwuachi, Andrew Zimmern, and José Andrés.

In a letter sent today to House Speaker Nancy Pelosi, House Minority Leader Kevin McCarthy, Senate Majority Leader Mitch McConnell, and Senate Minority Leader Chuck Schumer, the IRC laid out four proposed policy changes to the stimulus package, otherwise known as the CARES Act.

“Although the CARES Act attempted to provide a temporary lifeline, it unfortunately does not provide adequate resources or the right tools to ensure the survival of the independently owned restaurants nationwide that contribute nearly $1 trillion to the economy annually,” the letter states. Independent restaurants already run on a unique business model, with extremely tight margins, the letter continues. “These unique circumstances must be addressed independently of other small businesses seeking relief from the CARES Act.”

More than 12 million people work in restaurants in the U.S., according to the Bureau of Labor Statistics, and industry estimates put the number even higher. As Eater’s Hillary Dixler Canavan wrote earlier in March, “Restaurants are not only a cultural backbone of America’s small-town main streets and its biggest cities, they’re an economic one, as well.” Much of that backbone is formed by independent restaurants: the corner mom-and-pop joints, the immigrant-owned restaurants, the neighborhood spots. Independent restaurants were left out of the White House’s early conference call to discuss coronavirus in the restaurant industry; that meeting with President Donald Trump largely consisted of executives of fast-food and chain restaurants. The IRC, which claims to represent nearly 5,000 chefs and owners of independent restaurants, was formed partly in direct response to that call, according to founding member Colicchio.

“We are not looking for a bailout,” Colicchio said during a press briefing. “We just want to make sure we all have a business to return to. Not just for the sake of having a business, but because we know restaurants are the anchors of so many communities.”

The coalition’s letter requests the following changes to the relief package to better address the needs of independent restaurants:

Fixing the flaws within the Paycheck Protection Program (PPP), the portion of the bill that offers federal relief in the form of $350 billion in loans to small businesses like restaurants. The PPP in its current form allows businesses with fewer than 500 employees to apply for government-guaranteed loans capped at $10 million, or 2.5 times a business’s average monthly payroll expenses, excluding the salaries of employees making more than $100,000, plus loan forgiveness if a business rehires or maintains its full-time workforce by the end of June. The IRC wants to increase the maximum loan amount to cover three months of expenses after a restaurant can reopen and operate at full capacity.

“By the time we’re allowed to open … we’ll end up having to lay off those workers again,” said chef Naomi Pomeroy about the current bill during the briefing. Furthermore, if a restaurant has to spend the bulk of the loan on labor in order to qualify for loan forgiveness, there will be little left over to pay for rent or utilities — a conundrum especially salient in expensive cities like New York, Colicchio pointed out on the call.

Additional PPP changes sought by the group include increasing the loan repayment from its current two years to 10 years, instating a $500 million gross revenue cap that would prevent well-funded businesses from potentially taking up funding, and increasing the size of the $350 billion pool amid reports that banks and lenders have seen a flood of loan applications, with fears that the funding will run out in just a couple months.

Creating a restaurant stabilization fund to the tune of $50 to $100 billion in grants that would help restaurant owners pay vendors, reopen, and better position themselves for long-term survival.

Creating new tax rebates, including a “job provider rebate” and a “rent rebate,” to provide relief when business is slow throughout the course of the pandemic and its aftereffects. “Assuming we have enough resources to reopen, business will likely be down by at least 30% through 2021, which could mean running out of cash and forcing massive layoffs and possible closures,” the letter states.

Requiring business interruption insurance to cover COVID-19, which largely isn’t happening right now because of an exclusion many insurers added to avoid paying out business-interruption claims due to viruses.

Many of the IRC’s proposals are geared toward pushing Congress to include plans for long-term recovery, not just short-term relief. It’s still unknown how long this pandemic will continue, with some experts predicting that the virus could rebound in the winter or last more than a year until a vaccine is produced.

“The benchmark of a great restaurant is in how busy it is,” said chef Kwame Onwuachi during the briefing, adding that there will now be clear obstacles in dealing with public fears of being around other people, as the virus spreads via respiratory droplets. “That’s what our business is: it’s in gathering. It’s going to take a huge toll on us reopening.”

“Restaurants have always been the first responders,” Colicchio said. “We’re always there, and right now, we need help.”

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