The numbers didn’t lie. Early last week, restaurateur Taylor Hoang, owner of Redmond’s acclaimed Vietnamese spot District One Saigon, saw sales drop precipitously. The steep decline happened right after Microsoft, whose corporate headquarters are in Redmond, announced that it would urge workers to stay home due to public health concerns over the novel coronavirus. Business at District One Saigon dropped by 60 percent the first day, then 70 percent the next day. By the third day, there were only five people for lunch and three for dinner.
When things didn’t improve last weekend, Hoang made the difficult decision to close the restaurant entirely and reassess the situation later this month. “You can’t run a restaurant with only eight to 10 customers a day,” she says.
In a restaurant scene that was already facing headwinds before the crisis hit, the outlook for an irreversible contraction is real. “The city is going to lose the majority of its small businesses if it doesn’t act fast,” says chef John Howie of Bellevue’s John Howie Steak. In a widely shared post on Facebook March 8, Terra Plata chef and co-owner Tamara Murphy also didn’t mince words, saying the hospitality industry in the city is “about to collapse” and yet she saw “no regard to federal or local government even discussing it.”
From tourist hubs to areas farther south and north, from fine dining establishments to food trucks, everyone is just trying to hang on. A number of restaurateurs, like Hoang, are closing their restaurants temporarily in an attempt to ride out the storm — the most comprehensive so far has been Tom Douglas, who is going to close 12 out of 13 restaurants for at least eight weeks. A few are doing their best to expand delivery and takeout options. Star chef Edouardo Jordan of JuneBaby and Salare is making that pivot, as well as fine dining icon Canlis, which recently announced the surprising move of closing down its main dining room to open a drive-thru burger spot, takeout bagel shop, and meal delivery service.
But a major fear is that the downturn will linger past the point of damage control. There have already been layoffs and salary cuts at several Seattle restaurants, as more than 40 have closed at least temporarily in the past week alone. The majority of chefs, owners, employees, and other people in the industry Eater Seattle has contacted recently believe more bad news is coming. Temporary closures could become permanent. Restaurants that are just trying to get by for a while will find it difficult to ramp up again, even if public health fears and the spread of the new coronavirus eventually subside.
As Murphy detailed in her post, the ripple could last a long time, touching every aspect of the food industry, including farmers, fishmongers, wine makers, and butchers, while extending deep into Seattle’s catering business, especially now that Washington Gov. Jay Inslee has announced that events for over 250 people have been restricted in King County.
The service workers who live paycheck to paycheck could suffer the most, even as the state works to provide some emergency assistance to those who have temporarily lost their jobs as a direct result of an employer that had to close due to a COVID-19 case and cover those who fall ill (this is a handy guide to show who qualifies for what).
Kary Wayson, who was a server at Douglas’s Serious Pie for the past seven years (and worked for 16 years overall at the chef’s company), was laid off this week due to the drop in revenue at the restaurant and now has to navigate the difficult task of applying for unemployment and finding health insurance. She also had a 401K through her job, which is likely looking meager right now, as the stock market tumbles. “The weirdness is that nobody really knows what’s going to happen next,” she says.
On Tuesday, Mayor Jenny Durkan’s office announced a number of measures to try to address some of the worries from small businesses impacted by the coronavirus crisis. Among those include the deferral of business and occupation taxes and utility payments. There will be an expansion of the small business stabilization fund, which was set up to help low-income owners with five employees or fewer get a cash boost, and assistance to access small business loans. The Office of Economic Development will also provide assistance to local small businesses to ensure they can immediately access the Small Business Administration’s (SBA) federal loan program once it becomes available.
Eric Bahn from Ba Bar, who has seen a 60 percent drop in business at the South Lake Union location, says these efforts, especially the tax and utility payment deferments, can certainly help address some pressing money issues. “Every dollar helps when there is so much uncertainty and panic,” he says. “We’re all stressed.” Alex Pemoulie, the director of finance at chef Renee Erickson’s Sea Creatures restaurant group, says that freeing up emergency loans for small businesses could ease the pain. “There’s not a lot of cash flow right now,” she says.
Hoang, the co-chair of Seattle’s small business advisory council, hopes that the city can take things a few steps further. She believes one big difference-maker could be a two-month deferral in rent payments. Getting that implemented would require some tough discussions with local landlords and building owners, but a pool of money to help mitigate the costs could possibly be subsidized by philanthropy and federal money, while the city could attempt to streamline the process.
The measures were what Durkan’s office called an “initial recovery package,” which assumes that more actions will be taken down the line. It also includes a task force set up — co-led by former Washington Gov. Gary Locke — to provide more long-term policy recommendations.
But even if all this contributes to some relief for restaurants, time is of the essence. “We can’t bog this relief in red tape,” Hoang says. “It must be immediate and effective. No complicated forms to fill out, or six month wait times for approval.”
Pemoulie worries about owners who have single restaurant or no investors to fall back on if things get even tougher. “Even a 20 percent dropoff can be the difference between making payroll or not if the downslide continues for more than a month for some places,” she says. “There’s no wiggle room.” Kimmie Spice, the owner of popular fast-casual chain Biscuit Bitch, announced on Facebook that she would need to temporarily close her four locations, many of which are near tourist hubs like Pike Place Market. “Every option to stay open was analyzed, but rather than not be able to pay our staff and offer them health insurance, we thought it best to allow them to take advantage of the emergency assistance available immediately, while we await the return of the tourists and downtown workers,” read a post on the Biscuit Bitch White Center page.
The private sector is showing some indication that its willing to chip in. This week, Amazon announced a $5 million fund to assist small businesses around its Downtown and South Lake Union campuses, with money to be distributed by April to qualified applicants. It followed a separate $2.5 million fund intended to help workers affected by coronavirus impacts, including those who can’t take sick leave, people without health insurance, and healthcare workers. Amazon and Microsoft contributed money to that fund, along with partners that included Starbucks, Alaska Airlines, United Way of King County, King County, and the City of Seattle.
But not every business will qualify for the Amazon small business money. The fund that was announced is earmarked for businesses of fewer than 50 employees or less than $7 million in annual revenue, and are located “within a few blocks” of the office buildings near the Regrade campus and South Lake Union, according to the company. Capitol Hill sandwich shop Honeyhole, which had to close temporarily, posted a note on its door addressed to Jeff Bezos about the new Amazon Go Grocery store. “Your Capitol Hill neighbors have held down the hood for years while you left the entire block void and vacant,” the note read. “Care to return the favor and help your neighbors out in a time of need?”
Codependency with large corporations shows just how precarious things are in Seattle when Amazon and Microsoft withdraw from the city’s daily life. The system is set up on a teetering edge, and while many small businesses understandably gravitate toward the hubs of these giants, it’s now clear how one unforeseen event can turn everything into disarray. Even if things do return to normal within a short period of time, the city may have to think long and hard about the ways in which its commerce is failing small businesses, from skyrocketing rents to prohibitive permitting costs, and whether it’s bending over backwards more for the big companies at the expense of everyone else.
Of course, the lifeblood of restaurants have always been loyal diners. In that respect, some hope to be buoyed by grassroots efforts. There are Facebook groups, such as Support ID — Beat the Hype (with 5,585 members so far), trying to boost awareness for the International District’s restaurants and shops. Some have suggested that people should buy gift cards to their favorite places — a way to adhere to social distancing guidelines, while still supporting small businesses (takeout orders are always an option for some restaurants that don’t have gift cards). Two women from the wine industry set up a GoFundMe to help workers affected by COVID-19 impacts, with the lofty goal of $1 million (about $5,300 has been raised so far).
With the death toll and cases from the COVID-19 outbreak in King County continuously rising, Seattleites are legitimately concerned about public health risks — whether they feel unsafe themselves or responsible about the welfare of others. As Eater explained, there’s no fail-safe way of protecting oneself against the virus in restaurants, but there are steps one can take to make dining out less risky. King County Public Health recently listed some new guidelines for retail businesses and customers on trying to stay safe and sanitary, and the Public Health website said Thursday restaurants “may and should stay open, as long as they follow guidance aimed at maximizing excellent hygiene, social distancing, and cleaning.” Despite all the precautions, though, relying on a high volume of walk-in diners to get by may simply not happen for many restaurants.
That’s why a more concerted effort at the city, state, and federal level, hopefully boosted by even more support from the big businesses like Amazon and Microsoft that have thrived in Seattle for years, could go a long way at making a bad situation a little better. Some actions could include Amazon extending the already-announced funds to businesses beyond the immediate neighborhoods around those corporate offices in the city. It could involve Microsoft and other big corporations working with nonprofits in some areas to cover rent for small restaurants that may be on the verge of displacement.
And, as Hoang says, government assistance must be quick, with complete transparency on where emergency money is actually going. The federal government recently announced $1 billion in loan subsidies intended to help small businesses and others that have seen financial losses due to the coronavirus outbreak, but it’s unclear exactly how much of that Seattle will see or when it will see it. If President Trump had declared a novel coronavirus emergency in Washington early, it could have cleared the way for more people to be enrolled in Medicare. Instead, he has suggested the idea of possibly restricting travel to the state soon.*
Leaders across the political spectrum must make workers most impacted by the downturn a top priority as well. Washington recently extended unemployment benefits and paid family leave, but they were tied to a business being shut down after a worker tests positive for the coronavirus, which is needed. But workers who were let go after a business shut down due to economic reasons during the COVID-19 crisis still go through the usual process seeking unemployment and health insurance. Perhaps a further extension of unemployment benefits for those specific circumstances, more emergency assistance, and greater access to healthcare for the unemployed, might help.
The “We Got This Seattle” mantra is going around social media now. Time will tell if it’s true for the city’s restaurant scene.
*UPDATED: March 13, 2020, 12:45 p.m.: President Trump has now officially declared a national emergency, which should open up $50 billion for state and local governments to respond to the outbreak across the country.