Surviving in the restaurant business is difficult in the best of times. Today, with a new 50 percent capacity restriction on outdoor dining beginning, local restaurateurs say it’s impossible.
Since restaurants reopened in June, owners have invested thousands in PPE, outdoor dining spaces, and heat lamps, and are often still unable to turn a profit. Federal paycheck relief money stopped flowing in August and now all restaurants need to halve their already limited seat number, painting a bleak picture for the imminent future of the industry.
“I’m going to try for a week and then probably shut everything down. I can’t imagine we can survive and it’s also freezing now,” said Mark Verge, owner of Art’s Table, Ashland Hill, Margo’s, the Golden Bull, and Order for Me Deli. “This is probably a death sentence for all restaurants.”
For months Verge has held on to the staff in his five restaurants, only one of which is currently turning a profit. While he’s adamant on reopening when restrictions improve, he fears there is no way he can continue operating under present conditions.
“We love Santa Monica, we are trying to do everything we can to stay. At some point you can’t imagine, you keep losing money every month,” said Verge. “It’s just trying to figure out how long you keep getting punched in the face.”
Steve Lieberman, owner of Surfridge Brewery and West 4th and Jane is in a similar position. After the July reopening rollback, his brewery only received permission to open outdoor dining on Oct. 6 and his restaurant only has outdoor space for 40 seats.
“If that 40 goes down to 20 my staff is going to be standing around for nothing and I still have to pay payroll taxes, electric, government tax bills, and with half the amount of customers” said Lieberman. “We’ve been open 11 years, is it going to be worth it in January if it’s still like this? Probably not.”
Raphael Lunetta, owner of Lunetta Italian restaurant, was seating 50 percent of his pre-Covid capacity and now will be limited to 25 percent. His restaurant has gone from having booming business seven days a week, to having business around four and a half days a week.
“What we need is another round of PPP funds, and we need to make sure our government is really looking out for small businesses,” said Lunetta. “That’s what needs to happen, because there are a lot of small businesses that are not going to survive this.”
The Paycheck Protection Program was included in the March 27. CARES Act, which offered forgivable loans to small businesses to keep employees on payroll. Those funds ran out in Aug. and without another federal relief package, restaurant owners are struggling to keep staff employed.
Lieberman is also looking for more PPP money, but said that paycheck funding can only get a business so far when it has severely limited capacity and owes months of back rent.
“Payroll is not the issue. I have ten customers a day. I don’t need payroll for ten customers a day; I can have one person there. I need money for back rent,” said Lieberman. “How am I supposed to pay back a year of not paying rent? We need our landlords off our back, and we need our landlords to get help so the banks get off their back.”
All three restaurateurs said they fully understand the need to rein in cases and protect people’s health, but expressed frustration that despite their efforts to operate as safely as possible, restaurants are the target of new restrictions.
“I feel like on the Westside people are more aware and they are more conscientious and I believe that we on the Westside are doing a pretty good job in taking responsibility,” said Lunetta. “Yes there are some businesses of all sorts that don’t follow the rules and if they don’t it’s unfortunate because the rest of us who do do it, I believe well, are going to get dinged.”