Coronavirus has the bar and restaurant industry reeling

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Today should be a big day, a raucous green-beer-filled good time after a big weekend of much the same. the same. For many bars, restaurants, and liquor stores, including 2Bears Tavern Group, which owns three bars on Chicago’s North Side, the combined St. Patrick’s Day and St. Patrick’s Day weekend is traditionally one of its top five weekends for sales all year.

But this year: the coronavirus pandemic.

Even after concerns about sizeable crowds and COVID-19 canceled the famous green dyeing of the Chicago River, the city’s bars were still hoping for decent revenue from locals and visitors alike.

Mark Robertson and Mike Sullivan, co-owners of 2Bears, decided beforehand that they would go beyond Illinois’ rapidly changing recommendations of a cap of 1,000 people, reducing capacity in their largest bar—which normally holds 400 people—to 250. But then Illinois Governor J.B. Pritzker ordered that bars close and restaurants serve takeout and delivery only. The owners complied, committing to paying employees $15 an hour for an average work weeks’ of time through April 12, which Robertson said will be less than the standard bartender made with tips, but more than they would collect on unemployment. Independent contractors like the DJs and drag queens who perform at the bars are not covered, which Robertson regrets but simply cannot bankroll. And he’s concerned about what happens after March 30 if the state or federal government doesn’t pass legislation to provide relief to tavern owners and other in the hospitality industry.

2Bears Tavern Group’s sales were down about 30% as compared with previous years this weekend, which, considering the fact that changes related to outbreak crisis control came out faster than a round of St. Paddy’s Day shots, is not as big of a dip as it might have been. Without that weekend, Robertson said, it would have difficult for the company to have the funds to pay the staff through the end of the month.

Sure, Chicago is a town that loves St. Patrick’s Day a little more than most. But it is hardly the only city where barkeeps were banking on the March holiday to make bank, and, instead, are left wondering what they’ll do now. Many other municipalities, including Nashville and Anchorage, plus states ranging from Massachusetts and Pennsylvania to California to Louisiana, have shuttered bars and eliminated in-house dining for restaurants. Texas Governor Greg Abbott is the rare outlier who took the opposite tactic, and made a statement about keeping restaurants and bars open.

Officials are showing they mean business. In New York State, bars and restaurants that didn’t comply with earlier reduced occupancy laws were threatened with loss of liquor licenses. Closures and rule changes are in constant flux, with the public and business owners responding in a variety of ways.

National and state legislation, such as the Families First Coronavirus Response Act, provides federal support to allow employers to offer paid leave to employees. But requiring small businesses to pay for such aid and then get payroll tax credits or other legislation-driven low-interest loans are not going to be sufficient, bar owners say. Many adding that they won’t be around to apply for and pay back low-interest loans if something more substantial isn’t done.

In Tennessee there’s a push to #RelaxtheTax, which asks the state to immediately suspend all tax collection for hospitality-related businesses (the taxes are due March 20th).

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Shutting it down

In Nashville, another city known for its ability to throw a great party, Mayor John Cooper asked the Metro Board of Health to approve his decision to close Music City’s bars. But, before he did that, Saturday evening looked like a regular night on the town, with nose-to-shoulder crowds doing everything but practicing social distancing. On Sunday, the scene was met with the wrath of Twitter users’ indignation.

Initially, Steve Smith, the outspoken owner of the world-famous Tootsie’s Orchid Lounge, Honky Tonk Central, and Kid Rock’s Honky Tonk, refused to close his high-profile establishments. In a statement on Sunday he said, “unless there’s a statewide mandate that directs all bars and restaurants to be closed, the request made by Mayor Cooper is unconstitutional as he is targeting a select group of businesses.” By Monday, however, the establishments closed, and he released a statement indicating compliance: “We hope to continue working with local officials to minimize the hardship this puts on our over 800 staff members and 300-plus musicians.”

While Robertson of 2Bears and others hope that having mandated shutdowns, as opposed to voluntary closures, will increase the possibility of filing for business interruption insurance claims, he said more has to be done on the governmental level to stem the job losses in bars across the country.

By Monday several states, including New York, Illinois, and Georgia had passed laws to allow delivery of alcohol with varying restrictions (in New York, for example, it is allowed with a restaurant’s takeout order). Some bars were looking into adding takeout and delivery as a way to generate limited revenue and keep some employees on a payroll.

And the Ohio Department of Commerce, Division of Liquor Control decided to run a very holiday-specific program: the state is buying back unopened high-proof booze purchased for St. Patrick’s Day or other events between March 12 and April 6, so that bars aren’t stuck with a pricy inventory. The deal extends to restaurants and those who were granted special event permits.

But those fixes are Band-Aids, not the tourniquet needed to keep bars and restaurants in business. “There are industries where you can work remotely, this is not one of them,” said James Bateman, general manager of Gadabout, a restaurant and bar that has been open on Chicago’s North Side for less than six months. “Obviously, coronavirus is terrifying. But this is a huge hit to the local economy. With this many people losing jobs we need the government to recognize that they need to do something.”

Possibilities for relief include a moratorium on sales, unemployment, and liquor tax filings, as well as direct cash support to businesses that are not putting their staff on unemployment, suggested Robertson. When thinking about job losses, bankruptcies, businesses closing and not re-opening, he added, the long-term impact “is going to go well, well beyond what you are seeing from people being sick from the virus.”

Clarification: An earlier version of this article misstated how long the owners of 2Bears will continue to pay employees.