Tacoma-area restaurants, workers brace for long-term ‘big hit’ from coronavirus shutdown

Takeout and delivery won’t save the restaurant industry from the loss of dine-in business, but businesses in and around Tacoma — and across the country — are doing all they can to ensure they and their employees survive the crushing wave of coronavirus.

For almost all owners and managers, that has meant incredibly difficult choices. Many have laid off most or all of their employees, which means they can file for unemployment. Others have found creative ways to retain some staff, whether for takeout services or for entirely new sales channels.

Discussions with hospitality professionals, chefs and brewers over the past few weeks as the threat of COVID-19 seeped into all 50 states revealed everything from fear and desperation to hope and solidarity.

“Everybody’s worried about the health and safety of our clients and our staff,” said Ben Marcus, the chef and kitchen manager of Doyle’s Public House in the St. Helen’s District.

The bar was buzzing with customers on March 16, the last day before a mandatory shutdown that will ensue until at least the end of the month and on the eve before one of Doyle’s biggest days of the year, St. Patrick’s Day.

Staff not working behind the bar lingered for a Guinness or two, unsure of what happens next. The owner, Russ Heaton, helped them sort through the paperwork of filing for unemployment, an eight-week furlough allowed by state law, laying them off so they could collect those benefits rather than wrangle together shorter work hours that would render them ineligible.

“The intention is they’ll be coming back,” said Heaton.

By sacrificing his own savings, he was able to retain Marcus and two cooks, using a state unemployment benefit that compensates for shorter hours due to issues outside the business’s control.

“I figured out how far my savings could stretch to pay my own personal bills,” he said. “That’s sort of the owner’s duty: the captain needs to sacrifice the most so everybody else can weather and be successful.”

Without in-house dining and, more pointedly, alcohol sales, he estimates he will lose 90 to 95 percent of sales. He’s wary that takeout will even hit 5 percent of what the restaurant typically brings in.

Breweries are likewise enduring a double-whammy of lost dollars, where most profits come from their own taprooms and kegs to bars and restaurants. Sports are dead, which also cuts into sales, and the state liquor and cannabis board has extended a buy-back program that allows retailers and wholesalers to return product to the manufacturer.

“In manufacturing, especially in beverage when we’re dealing with perishable items, normally when we make a product, it’s gone within a few weeks,” said Ken Thoburn, who opened Wingman Brewers in 2011 with Paul Jackson. With a staff of fewer than 10 people, they haven’t laid anyone off and hope the shutdown ends soon enough that they don’t have to.

Typically working at least five weeks out complicates matters.

“You don’t want a lot of inventory or a lot of extra bills at a time when you’re spending all your reserves,” he said.

THIS LOSS AFFECTS EVERYONE

For restaurants and bars, where the phrase “we’re like family” is uttered sincerely, the worry extends beyond the table.

“This is a big hit for our industry, and it will take us a while to recover from it,” said Doyle’s Marcus, running down the list of worries his colleagues now have about paying their mortgage and feeding their families.

Aaron Shook, the general manager of Table 47 and the Ocean 5 events venue in Gig Harbor, is uneasy about how the more than 100 people they had to lay off will manage. About two-thirds were part-time, and most had at least one other job, which makes filing for unemployment difficult as you must prove full-time hours.

The restaurant industry has “a very vulnerable workforce,” he told me in a phone call. “The majority is paycheck to paycheck and needs every dollar of that paycheck.”

As the president of the regional chapter of the National Association for Catering and Events, he has unique insight into the slow burn of the virus’s spread in western Washington. The impact on the events industry — dating back to February as the numbers of confirmed cases ballooned in Washington and across the U.S. — was immediate.

Out of 150 member companies in Seattle and another 80 or so in Tacoma, “everyone of them has been impacted,” lives “irreparably changed,” he said. “There’s not a single person that hasn’t lost their job, been displaced, or lost revenue as a business owner. It’s just been emotionally draining.”

RESTAURANTS RETHINK THEIR PLACE IN COMMUNITY

At Pacific Grill in downtown Tacoma, chef and owner Gordon Naccarato told The News Tribune in a message that most events from March until May had been canceled or postponed.

“We laid off most catering staff a week ago, and were trying to limp through at Pacific Grill where business remained decent, but down 25 percent, until the governor shut us all down,” Naccarato said.

The Table on Sixth Avenue likewise fought an inner monologue of safety versus the bottom line last weekend when customers showed up to support the restaurant before anyone knew for sure it would all end, for now anyway.

At Fujiya Japanese Restaurant on Broadway in Tacoma, co-owner Donna McGhee said she hopes their servers can collect unemployment and return to the sushi bar soon because “it’s difficult to find experienced servers.”

“This is a terrible hit to the restaurant, and we’re struggling right now,” she told me in an email.

Crudo & Cotto, which opened in Proctor in late December, has a slight cushion of an initial loan with remaining funds. That will provide some relief, said owners Kathryn Philbrook and Giampaolo Falchetti, but they still laid off most of their small staff in Tacoma and at their Olympia restaurant Basilico. They are testing takeout and dusting off a retail product line of fresh pastas, sauces and cookies. They might even film cooking videos for customers to follow recipes at home.

“We are trying to see if we can change our business a little bit,” Falchetti told me in a phone call. “We’re trying to do our best and reinvent ourselves.”

Being on the small side might have some advantages. McMenamin’s, for instance, made the “drastic but necessary” decision to lay off 3,000 employees, shutting down all of its Washington operations including the Elks Temple in Tacoma. The reasoning is that unemployment will provide workers some relief until they can return to work.

Larger businesses have bigger payrolls, higher utility bills and taxes. Staying open and hoping for enough takeout business to offset the in-house losses might just equate to bad math. The numbers don’t add up.

“We’re really good at planning for things,” said Wingman’s Thoburn. “When we have a plan, that’s when we know what to do. Right now it’s like we don’t know what to do. Everyone’s kind of in a holding pattern of: ‘OK, what’s our plan? How many months can we keep staff — or weeks for some folks. Should we make beer? Should we not make beer? Is the package velocity of sales in grocery stores increasing, decreasing or staying the same?”

The biggest problem is no one really knows when this will end.

“It’s like, OK, is it two weeks or six weeks or eight weeks?” asked Thoburn. “The confusion has a lot of people in the industry scared in not knowing what to do.”

Small business owners don’t have rivers of cash flow, he said, and taking a loan or deferring taxes now might put you in an even bigger hole later. Plus securing a loan takes time: Wingman has a Small Business Association loan, and it took six months to get under normal circumstances.

“How fast can the government get something done? The answer is not fast,” he said, and it’s unclear if those efforts will yield meaningful relief for the service industry.

Falchetti, whose family in Italy has seen firsthand the complications of a slow response to the virus’s spread, said he was expecting this kind of shutdown earlier. In part because it might have started too late, few believe it will come to an end soon, and even then, the public might be fearful of going out in droves or be in the same boat as the thousands of laid-off hospitality workers.

“I don’t think any of us truly believe that end date,” said Table 47’s Shook. “We have to protect ourselves and proceed with the perception that it will last longer.”