Pandemic Diary Day 27

April 20, 2020

When I was in college one of our classes required that we peer into the future and write papers on city planning.

I hated that class, I don’t like pretending to be a prognosticator, my crystal ball has so many cracks in it, it resembles a window in a long abandoned factory.

There are people that make a success in putting out sensible possibilities for the future like Isaac Asimov or Douglas Clark, both science fiction writers. Both were also scientists which is why their science fiction had successful prognostications.

The problem is, we are on the precipice of a whole new way of living and that means if I want to bring ideas to this realm, I need to mix facts I know with the farrago of concepts that are infecting my head.

There are large swaths of careers that are being turned on their head and some are in grave peril, in particular those found in restaurants.

Several days ago I was only half listening to the news when I heard a chef in New York say that he felt the neighborhood restaurant would be a thing of the past forever.

That struck me as rather bleak, and yet…

Forbes Magazine did an interview with Tom Colicchio, founder of Crafted Hospitality and host of Bravo’s Top Chef who said “I expect 70% of restaurants will close as a result of this.”

A large part of this has to do with the Coronavirus Aid, Relief and Economic Security (CARES) Act and particularly the section titled the Paycheck Protection Program (PPP).

The PPP gives business the opportunity to apply for 250% of their monthly payroll and the loans are forgiven if 75% of the money is used to pay employees.

Unfortunately it isn’t working for the little guy.

On April 16th the program declared that it had gone through all of its $350 billion. The plan is to add another $300 billion, but that is still in the negotiation stages.

Before the program went broke Potbelly Sandwich Shop, a publicly traded company with 474 locations and 6,000 employees was approved for $10 million in funds. Ruth’s Chris Steakhouse was approved for $20 million. They got around the $10 million limit by applying through two subsidiaries, according to their SEC filing. The restaurant business only accounted for 8.19% of the monies awarded through the PPP, leaving nothing for those restaurants that truly should be receiving these monies.

This tendency to favor the big guys is causing small restaurants to come up empty. Caterers and food truck owners faired even worse as they weren’t able to apply for funds until April 10th putting them too far back in the line to get even a crumb.

There lies the first step towards the death of the local restaurant an absolute crime should it come to pass. Local restaurants are the cultural icons of any society. I am so lucky to live in San Francisco where the choice of types of food from Afghani to Zimbabwean and brasseries to vegan spots abound. These types of restaurants are small, individually owned and hire local and when they are gone we will be left a void that will not be filled easily. Think about it, these types of restaurants not only bring you food from around the world, but they bind us in our experiences of new cultures, and they even aid in teaching us new languages. Think ‘pizza’ — Italian, ‘hamburgers’-German, ‘fajitas-Spanish’, ‘kebabs-Urdu’ and, ‘sushi”- Japanese, even the word cuisine comes from the French word for cooking.

I for one, do not want to live in a world where mega corporations are making my food, yes I have the luxury of living where I have that choice, but no matter where I am I will take the local diner over a chain restaurant any day.

While many restaurants are staying open for delivery only, this is not going to be viable for a long stretch. They have fewer employees to pay, and tablecloths to wash, but looking at the profit margins when factoring in the restaurants fees to the delivery service and you do not have a tenable financial working situation that can last very long. The Wall Street Journal has pointed out that normally a restaurant makes 69% off of any given meal, when delivery service is factored in this drops to 39%.

So here comes the part I am not good at, trying to look into the future and see how this could resolve itself.

The food truck may be the first thing we see come back, and if that is the case many cities need to consider adopting more liberal laws to allow them to flourish. Many of these, hopefully, will eventually turn themselves into brick and mortar locations, but that will take time.

In the meantime, most will toss in the towel, throw their dreams in the dustbin and look somewhere else for work. With those businesses tossing in the towel the loss of jobs stretch from dishwashers to waiters, from busboys to sous chefs, where do they go?

This is also not just a loss of a restaurant and its jobs, there are the farmers, the distributors, the wine merchants, the laundry services that all will suffer immensely without a flourishing restaurant scene.

Next is the real estate market. Many of the restaurants in my neighborhood are in single occupant commercial buildings. While I see the plywood cover the windows and my heart bleeds for the people that made those businesses possible, I also wonder about the buildings landlord. These are not buildings owned by large corporations, many of these are owned by individuals and they, very possibly, are completely dependent upon the rent from the restaurant to make the mortgage payment. If they falter, it will be deep pocketed big businesses swooping in to buy up the defaulted loans.

With the loss of all of that, I see the beginnings of a corporatocracy, not a realm I want to live in.

I do not mean to imply here that this is the end of restaurants, they have been with us since the beginning of time. My concern is that if we have a protracted recession/depression, savings accounts that were earmarked for the dream of a restaurant at the end of the tunnel, will be depleted to the point of killing those dreams. When this is all over the big boys will easily be able to get their hands on money, that has never been the reality for a family owned startup.

One day the restaurant business will return, and hopefully as robust as it is now. I just worry the timeline is longer than most people are factoring in. If we are two years from a vaccine, we are two years from getting away from social distancing and that is a factor in watching the economics of this wreak havoc on the industry and making its comeback a long, long road.

It may be an anathema to many, but sometimes throwing money at things is the only way to preserve the way of life we have come to expect. This is an industry that is going to require more than one bailout. Especially since restaurants have been mandated to close and then mandated to maintain social distancing once they do open forcing them to operate at only 50% capacity. This is not the time to loose the things that not only give our cities character, but also employ an extremely large amount of people.

Trivial Things

My Horoscope for today: You stand to benefit from another party’s oversight, but go ahead and point it out instead. Not only is it the right thing to do, but this person will be eternally grateful.

The NYT Crossword Puzzle: Simple, but I had to go on-line to have the theme explained to me.

San Francisco weather: 56 degrees and cloudy

NYSE DOW opened at: 24095

Italian word of the day: replica (answer or retort)

Spanish word of the day: el ahorro (saving)

OED word of the day: yark (A sharp blow with a whip, hand, or other object; a stroke, a lash. Also: the sound of a sharp blow; a crack; a thud)

Days under Shelter In Place: 38

Reading: The Great Influenza by John Barry

Reading Canto XXV, XXVI, XXVII of Dante’s Inferno

My Black and White Picture of the Day

Something Silly From the Internet: · Day 5 of Homeschooling: One of these little monsters called in a bomb threat.

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