How to Help Rhode Island Restaurants With Relief
Rhode Island restaurants are experiencing an unprecedented financial crisis in the face of COVID-19, but there are ways the public can help.
This article was recently updated from an earlier version posted on March 27, 2020.
More than a month ago, Oberlin and Birch restaurant owner Benjamin Sukle was ahead of the curve and chose to shut down his businesses before Rhode Island Governor Gina Raimondo made the tough decision on March 16 to suspend dine-in service in the wake of the COVID-19 crisis. Initially, he chose to close completely and not offer takeout in an effort to protect thirty-plus staff members and guests from potential Coronavirus exposure. A few days after halting service, he donated leftover food from the restaurants to food pantries while simultaneously launching a GoFundMe birch/Oberlin Employee Relief Fund to help support former staff.
“I started the GoFundMe because of how completely helpless I felt shutting down my restaurants,” he says. “I shut these places down before any sort of dine-in restrictions happened so at the time it very much felt like a voluntary thing to shut them and I felt responsible for them.”
He and many other restaurant owners across Rhode Island were each forced to let go of dozens of employees at the same time. They, along with many restaurants across the nation, had no choice but to eliminate the majority of restaurant jobs.
Nationwide, the restaurant industry will lose at least $225 billion during the next three months, with 5 million to 7 million jobs lost. Providence has been ranked as the city with the most restaurants per capita in the nation, right ahead of San Francisco. The National Restaurant Association cites 2,926 food and drinking establishments in Rhode Island with $2.7 billion estimated sales in 2018. The local food industry involved 57,600 restaurant and food service jobs in the state as of 2019, which accounted for 11 percent of total employment. The Department of Labor and Training’s latest numbers document that more than 162,582 Rhode Islanders, many of them in the food industry, have filed COVID-19-related unemployment insurance claims since March 9.
Days after Sukle shut down, Derek Wagner of Nicks on Broadway and Nicks on Westminster resorted to takeout-only business and launched a similar Nicks Relief GoFundMe campaign to help more than fifty laid off staff in desperate need of income relief after sudden job loss. Ellen Slattery, proprietor of Gracie’s and Ellie’s, also laid off seventy staff members and decided not to offer takeout due to safety concerns for her employees. She subsequently started a Givebutter Rise for Relief fundraising campaign for her team. “Guests were asking us how they could help out our teams .. and this was the direction I decided to go,” Slattery says. “The notes that guests have been writing are remarkable and heartwarming. They are fueling the team right now and keeping their spirits up.”
While laid-off restaurant and bar staff are able to collect unemployment, it gets complicated for servers and bartenders who rely on tips to make a living wage. The restaurant owner also has no safety net for continuing to operate with a skeleton crew for takeout-only business with no profits coming in. And if a restaurant owner wanted to take advantage of the federal Payment Protection Program — which is a forgivable loan that takes care of employees’ salaries plus some rent and utility expenses — they’d have to hire all employees back by June 30, and keep them on payroll, and it’s not looking likely that business will be back as usual by that time. And, even if they hired employees back, those employees would be making less income than they do now on unemployment with the additional temporary $600 weekly bonus.
“We were the first industry that was told by our government to avoid at all costs and we are without a doubt the least profitable. These shut downs brought us to our knees,” Sukle says. “My biggest priority has been to work towards maintaining both of my businesses so that I can rehire the thirty-plus employees I had to lay off.” He has since reenacted contactless takeout pickups with wine and beer sales and curbside deliveries while taking all precautions and keeping strict guidelines on glove-usage and sanitation as recommended by the CDC and the WHO.
Each of these restaurants has maintained expensive insurance policies, but little did they know that claims for business interruption would be denied due to Coronavirus. They would have fared better financially if a hurricane or flood had destroyed their businesses instead of a deadly pandemic that would provide no reimbursement for losses.
The Federal Hill Commerce Association, led by Rick Simone and representing more than 100 businesses located both on and off Federal Hill, has urged House Speaker Nicholas Mattiello and Senate President Dominick Ruggerio to pass legislation that would compel insurance companies to cover claims by Rhode Island small business owners as a result of damages from the interruption of operations due to COVID-19. The bottom line is that restaurant owners were hoping for insurance relief but they got zero help for what they paid for in advance.
James Mark of north and Big King restaurants had to lay off his entire staff, including thirty-five employees. After shutting down completely, he decided to reopen to serve no-contact pre-paid takeout at Big King and north with profits being placed into a fund to assist his currently out-of-work staff with life expenses.
He has always paid business insurance but says he has never been able to use it. “Our agent said that this sort of thing isn’t covered under business insurance, because that only covers physical disasters – even a broken pipe,” Mark says. “The fact that in this situation I can’t use it? It’s disheartening to say the least. They justified it by saying that this is so widespread that it would bankrupt the entire industry. So we may go bankrupt instead.”
Over at Nicks on Westminster and Nicks on Broadway, Wagner is keeping tabs on finances just in case some sort of insurance relief is provided in the end. He says, “keeping good records of zero income is easy.” In the meantime, he has turned up the takeout business at Nicks on Broadway after having to lay off fifty employees. He started the Nicks Relief GoFundMe campaign to raise money for former employees, and he’s even been feeding staff meals each day, as well as providing free meals to children in grades K through twelve that may need it due to school closures.
Unemployment checks aren’t a solution to his problems either. “Most of us don’t make enough money as it is to begin with,” Wagner says. “And business owners can’t recoup the massive losses with a UI check.”
Less than two weeks after COVID-19 impacted his restaurants, Wagner was forced to shut the Nicks on Westminster location down for good. “We simply won’t be able to carry on after this loss. I haven’t made it public yet, but I had to break it to the staff,” he says. “It was the hardest thing I’ve ever done. We are now fighting to survive at Broadway.”
On top of this financial devastation and loss of profits, all Rhode Island restaurants are still on the hook for sales taxes (collected from customers to be forwarded to the state) that were due in mid-March and again on April 20. Restaurant owners and food businesses across the state pleaded with Governor Raimondo to defer the tax payment in the face of the COVID-19 pandemic’s economic toll. Other states, like Massachusetts, agreed to delay payments until June as a temporary solution. “I’m fully aware what escrow is and how that money ‘isn’t mine,’ but Massachusetts saw it fit to delay such withdrawals,” Sukle says, adding that he took $13,000 from his personal account to help pay for the March payment. “What I choose to want to believe is that a short-term goal for the state to receive these funds is going to be the death blow for us long term.”
“I’m closer to the edge of bankruptcy than I have ever been in my life and I had no choice,” Sukle says.
James Mark had to take money from his daughter’s college fund in March in order to make the tax payment because his restaurants had been gutted from being closed for the first ten days. “The problem with this last payment is that not only did it come on the heels of a slowdown in business, we then were closed by the state for ten days before it was due,” he says. “The money was used to pay staff for the week before and other bills, and then when we would usually make up the difference – the ten days in between – we were shut off from any income.”
Restaurants have been hammered with multiple blows to their businesses, but there are ways the public can help. Primarily, business owners plead with Rhode Islanders to lobby our legislators for relief. “Calling our state representatives, our senators, our governor and demanding and inquiring about a stimulus specifically to those in the food service and hospitality industry now,” says Sukle. “When we inquired with Rep. Jim Langevin, we were told the best thing to do was to keep calling and keep persisting about this.”
Langevin has listened to local small business owners over the last month and championed multiple sweeping Coronavirus relief packages to help hard-working families, small businesses and medical professionals on the frontlines. “I’ve been in constant communication with leaders from different sectors to hear of the impact of this crisis and how the federal government can assist,” says Congressman Langevin in an email response. “I have fought to ensure that COVID-19 response packages from Congress include relief for mom-and-pop shops and restaurants.”
Business owners who would like more information or assistance can reach out to his office by calling 401-732-9400.
Langevin says that there is direct aid for restaurants and small businesses in the bipartisan CARES Act that makes $350 billion available in loans so restaurants and other establishments can keep people employed and pay their bills. “These loans will be forgiven so long as businesses don’t lay people off,” he says. “I encourage every Rhode Island business to work with their banks to see if this relief makes sense for them.”
Unfortunately, the relief assistance quickly ran out to provide support to small businesses, and most restaurants have already laid off all their workers. It’s not practical to hire employees back when restaurants are barely operating right now, and the situation is likely to continue past June. Slattery started the Givebutter campaign for her staff because she couldn’t wait for the government to act. “Our industry needs to be heard,” she says. “The destruction of our industry right now can only be solved by our legislation. We need grants and federal relief.”
There are other more immediate ways the public can chip in to help out-of-work food and drink service professionals. Donate directly to one of the individual restaurant fundraisers, or contribute to the COVID-19 Rhode Island Hospitality Relief Fund, created by bartender Leishla Maldonado, and the Rhode Island Hospitality Association’s overarching RI Hospitality Employee Relief Fund. This campaign was organized by the RI Hospitality Education Foundation and funds raised will be distributed among RI Hospitality Association member employees that have been laid off and are facing financial hardship due to COVID-19.
The Rhode Island Hospitality Association is also offering a free ninety-day membership – from now until June 30 – to any independent restaurant operator in Rhode Island. This free membership gives restaurant owners access to email alerts, text alerts and other information related to the COVID-19 crisis.
Rhode Islanders can keep our restaurants in business by continuing to purchase gift cards and ordering takeout food and beer and wine to-go. “Buying gift certificates through restaurants’ online websites or their merchandise has been vital,” Sukle says. “Keep us going by ordering, whether that’s retail merchandise, gift certificates, takeout or delivery.”
In addition to showing support through ordering food for takeout, James Mark also suggests guests can help by purchasing takeout alcoholic beverages from restaurants, which he’s thankful to be able to sell during this time (thanks to lobbying by Dale Venturini, President and CEO of the Rhode Island Hospitality Association). “We are in the process of adjusting prices to standard liquor store markups, which means we need to move significant volume in order to make up for our worst beverage cost,” Mark says. “That higher markup is what paid for our higher fixed costs than what liquor stores pay. We also have curated lists and wines/sakes that stores don’t carry.”
Rhode Islanders should continue to contact Congress and support our restaurants any which way they can. The food industry starts with restaurants and employees, but it trickles down to farmers, food producers and fishermen who are impacted just as much by low sales volume.
“We are dealing with a global health and economic crisis, which is unprecedented in our time,” Wagner says. “The economic impact is only beginning to be understood by the public. Food touches everything, and it will start with us and ripple out quickly.”