Is enough being done to help Pierce County’s independent restaurants survive COVID-19?

Despite legislation touting relief for small businesses, restaurant leaders in Washington state and across the country say the industry needs more support — and a public plan — to retain employees and emerge from the coronavirus crisis.

In Tacoma, restaurants are thankful for municipal efforts, including rent and utilities relief, but owners worry about what the future looks like without knowing, well, what the future looks like.

“At some point they’ll turn the switch back on,” said Russell Brunton, who owns Indochine Asian Dining Lounge downtown. “As weeks go by, and more weeks go by, actually this isn’t some alternate reality. This is actually the reality that we’re living in.”

Given the initial order to close dining rooms, business owners like Brunton made quick decisions knowing they would be temporary. He laid off about half his staff and moved to a takeout and delivery model that, with decent savings after more than 15 years on Pacific Avenue, would sustain the restaurant for a time.

His landlord, the University of Washington Tacoma, has halted rent for many of its commercial tenants, a real difference-maker for Indochine.

“If we had to pay that big rent bill, we would definitely be in the red,” said Brunton, adding that deferments from utility companies and for state taxes was “really gracious.”

He only expected financial help from the federal level, instead viewing local governments as facilitators.

With more than 50 employees, Indochine was not eligible for the City of Tacoma’s COVID-19 Stabilization Loan Program, which offered loans up to $15,000 to businesses open for at least a year with 10 or fewer employees. Pierce County has expanded its Emergency Small Business Relief Loan Program to businesses with 20 employees for $20,000 loans with no interest or payment for the first 12 months.

In Lakewood, the City Council received $350,000 from a community development grant, expected to be dispersed as a cash award or no-interest loan up to $10,000. Though the city welcomes the money, the amount falls far short of what is necessary to help the “countless struggling businesses that need assistance currently,” said communications manager Brynn Grimley.

“Whichever option the council chooses, special attention will be given to assure the program is available to all qualifying Lakewood businesses, including those that may be owned by people who do not speak English,” she added.

As an alternative, Maddie Merton, the vice president of business retention and expansion for the Economic Development Board for Tacoma-Pierce County, encouraged businesses to work closely with their banks to stay ahead of the SBA loans so they can apply when the government says go.

“It is first-come, first-served. Businesses may also need to apply during off hours as the demand nationally will be enormous,” she told The News Tribune in an email.

Local, county and state partners continue to evaluate funding opportunities, she said, highlighting the county’s relief expansion to businesses with 20 employees.

City of Tacoma spokesperson Maria Lee likewise advised businesses with fewer than 50 but more than 10 employees to contact the SBA or private lenders “for additional resources or strategies.”

INDEPENDENT RESTAURANTS LEFT OUT?

That kind of advice doesn’t necessarily sit well with restaurant leaders, who insist that not enough has been done to relieve an industry that employs 12 million people.

More than a third of Washington’s 300,000 hospitality workers lost their jobs in March, according to the state hospitality association, while U.S. independent restaurant sales slumped to 20 percent of normal due to stay-at-home restrictions. The U.S. Senate passed a $483 billion relief bill this week, now on its way to the House, that funnels another $331 billion into the Paycheck Protection Program built into the CARES act passed last month.

Not only did the initial SBA loans run dry in two weeks, but recent filings revealed that dozens of publicly traded companies, including Ruth’s Chris Steakhouse, Potbelly Sandwich Shop and Shake Shack, received tens of millions in funding. As the Associated Press reported, these chains were eligible despite employing thousands because of an exception in the bill for food service businesses with fewer than 500 workers per location.

Washington businesses applied for more than 30,400 loans worth $6.9 billion, according to SBA data. The number of applications puts the state on par with Iowa, which applied for 29,400 loans worth $4.3 billion; New Jersey, where 33,500 loans valued $9.5 billion; and Oklahoma, where 35,500 totaled $4.6 billion. Only nine states received more than $10 billion, including California, Texas, Florida, Ohio and Pennsylvania.

For the Independent Restaurant Coalition, formed as COVID-19 closed restaurants and bars in dozens of states, the new bill fails to address problems inherent to the first round of funding passed in the CARES act last month.

In a statement, the group pointed to the SBA data from April 16 that shows accommodation and food service received less than 9 percent of the money — a statistic that falls flat considering these industries accounted for 60 percent of March unemployment claims. The airline industry, on the other hand, employs 512,000 people but specifically received $25 billion from the CARES act.

“No one wins when one of America’s biggest and most beloved industries fails. If Congress is serious about putting the economy on track and reducing unemployment, they need to act on a package that helps independent restaurants survive this crisis,” the restaurant coalition said.

Brunton applied for a PPP loan for Indochine through Heritage Bank, which operates only in Washington and Oregon. He worked hard to gather the necessary paperwork, he said, but he worries that the stipulations might be impossible to meet without knowing when dining rooms can reopen.

The SBA loans will only be forgiven if the recipient keeps at least 75 percent of its staff on payroll through May 31.

His advice for additional funding: “Be flexible in terms of how you can use it and what’s forgiven. That level of support hasn’t been there.”

With each passing day of stay-at-home orders and without a step-by-step plan of what will open, how and when, that two-month time frame looks increasingly like it’s way too soon.

“When will we be busy? Based on where we’re at, what do we need to do to maintain our position in the marketplace, to maintain our relevance to our customer base, and what do we need to grow?” Brunton said. “We would love to spend all that money on payroll, but if the government says we can’t open, we’re limited in terms of what we can get in people’s pockets.”

He believes in the creativity of small businesses to “work really, really hard at solving problems,” but not everyone has the same coffers or networks at their disposal.

“We’ve been really lucky, but our position isn’t guaranteed,” he said, “and we’re amongst millions and millions of small businesses that are essential to the economy.”

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This story was originally published April 23, 2020 at 5:05 AM.