WASHINGTON — Some 350,000 jobs are on the line in Washington and many independently owned restaurants and bars could permanently close if Congress doesn’t replenish COVID-19 relief funding, an industry group warns.
About 200,000 independently owned restaurants and bars were left behind in the $28.6 billion Restaurant Revitalization Fund grants authorized last spring by the American Rescue Act, according to the Independent Restaurant Coalition. The fund was depleted by mid-June of 2021.
The group, whose members employ 11 million people, has collected upwards of 3,000 signatures on a letter asking Congress to pass the bipartisan Restaurant Revitalization Fund Replenishment Act, which would make $60 billion available to independent eateries and bars hurt by the pandemic.
Many restaurant owners have been able to hold on through lockdowns, but say they’re draining their bank accounts and taking on more debt just to keep their doors open. More were pushed to the brink of closure with the omicron variant surge that began in December, according to the Independent Restaurant Coalition.
“I can’t go into further debt to salvage this restaurant,” Dwayne Allen, the owner of the Breadfruit & Rum Bar in Phoenix, told The Wall Street Journal.
His restaurant was closed for months. He’s in arrears on rent, and he has taken out a $48,000 loan so he can pay off his landlord by the end of the month. But he told The Journal, “I have no idea where that money is going to come from.”
A January survey of 1,200 of Independent Restaurant Coalition members showed many are “taking on massive debts, laying off employees, and selling personal assets to stay in operation,” Erika Polmar, the group’s executive director, said in a statement.
“These businesses are filing for bankruptcy and receiving eviction notices after crying out for help for nearly two years,” Polmar said.
Specifically, the survey found:
About 25 percent of restaurant operators face eviction without federal relief, and nearly 50 percent face bankruptcy without it.
About 60 percent reported sales dropped by more than half during December because of the omicron surge.
Nearly half of businesses that hadn’t received Restaurant Revitalization Fund grants last year were forced to lay off staff because of COVID-19 closures and sliding sales in December, compared with only 33 percent of businesses that received funding the first time around.
Washington's $13.5 billion leisure and hospitality industry accounted for more than half of all jobs lost in the state during the pandemic, according to the Independent Restaurant Coalition.
Momentum is building on Capitol Hill for Congress to approve more federal aid for restaurants and other small businesses disproportionately affected by the coronavirus pandemic, The Hill reported.
The Biden administration is focused on voting rights legislation, Massachusetts Democratic Sen. Elizabeth Warren told Boston Eater, but independent restaurants can’t afford to wait, she said.
“People need the money right now,” said Warren, one of 42 co-sponsors of the Restaurant Revitalization Fund Replenishment Act sponsored by Arizona Democratic Sen. Kyrsten Sinema.
“Congress should have stepped up months ago going into the winter, but here we are now, and with omicron hitting so much harder than most people anticipated, that’s been a double blow to the restaurants, so we need to get the help out the door fast,” she said.
Democratic Sen. Ben Cardin of Maryland, the chair of the Senate Small Business and Entrepreneurship Committee, told The Hill that he and Republican Sen. Roger Wicker of Mississippi, one of six Republican co-sponsors of the bill, are working to build broader support for the measure.
“The problem is the floor schedule, and other bills that have gotten backed up,” Cardin told The Hill. He and other backers of the bill are “open to a vehicle,” Cardin said, whether through an independent bill, an attachment to other legislation or “repurposing” unspent money allocated under previous programs, including those under the American Rescue Plan Act.
Texas Republican Sen. John Cornyn told The Hill he’s “open to the arguments” in favor of replenishing the restaurant fund but said that, so far, he hasn’t “heard anyone make the case.”
“I think there's so much money out there that we've shoveled out the door that has not been accounted for,” he said. “I would want to make sure that there was a true need and it couldn't be met by money that we've already appropriated.”