$28 billion in federal aid opened for food, beverage purveyors slammed by pandemic

The federal Small Business Administration has opened the application process for awards of up to $10 million each to restaurants, wineries, caterers and a broad range of other food and drink purveyors financially impacted by the coronavirus pandemic. It’s a ray of good news for Sonoma County’s food and tourism industry, which has been battered by the downswing in business amid government-imposed safety orders of the past 14 months.

“Our district, it’s renowned for our great food and wine,” said Rep. Mike Thompson, D-St. Helena, and a strong proponent of the fund. “The pandemic was crushing. It harmed a lot of great small business owners. A lot of restaurants closed and will never open again. Many others were set back. It’s important we provide assistance to these folks, so they can keep their doors open and employees working.”

The Restaurant Revitalization Fund, established by the sweeping American Rescue Plan Act in March, appropriates $28.6 billion to the SBA for grants to affected business owners. That money will be available until expended, and does not have to be repaid.

The Rescue Plan includes key provisions from the RESTAURANTS Act of 2020, which Thompson co-authored. The SBA hosted webinars for restaurant owners last weekend, and officially opened the application website at 9 a.m. Monday.

The Spinster Sisters, a well-known neighborhood restaurant just south of downtown Santa Rosa, was ready.

“I was on the portal at 8:59 that morning to submit my application,” said Spinster Sisters chef/owner Liza Hinman.

Her restaurant, like most, struggled to stay afloat in 2020 and the early part of this year. Spinster Sisters went from 30 employees to five early in the pandemic. The restaurant has never fully bounced back, with 12-14 employees for several months now. Hinman said the Revitalization Fund application process is fairly straightforward. Businesses calculate their gross revenue figures from 2019 and 2020; the difference, minus any PPP loans received, is what you’re eligible for.

The Spinster Sisters’ 2020 deficit, she said, was about $1 million. She would love to get that back as a relief award.

“I think we would probably use it similar to how we used our PPPs. Mostly toward payroll,” she said. “I try to pay my staff as well as I can, to continue to support that without having to raise prices. Beyond that, probably just my bills like rent and insurance.”

Hinman is one of the fortunate ones, really. An estimated 110,000 American restaurants have closed since the pandemic erupted in March 2020, and food service sales have fallen short of expected levels by $280 billion, according to a National Restaurant Association spokeswoman. There are about 1.7 million fewer restaurant jobs now than there were pre-pandemic, she said.

And as Thompson noted, there is a trickle-down effect when restaurants struggle. “The silverware people, the glass people, linens, wine, food, everyone takes a hit,” he said, adding that the pandemic’s undermining of the food industry has disproportionately impacted women.

The Revitalization Fund recognizes the economic diversity of the food and drink industry. Grants — up to $5 million per physical site, with a maximum of $10 million per business — are also available to existing wineries, distilleries, breweries and brewpubs, bars and taverns, food trucks, bakeries, caterers, snack bars and inns that serve food.

Funding may apply to a wide range of expenses, including supplies, payroll costs (group health care, too), mortgage and rent payments, debt service, utility bills, maintenance expenses and construction of outdoor seating — a common expense as COVID has driven diners outside.

Franchettis’ Gasthaus in Santa Rosa experienced most of the hurdles that befell the industry in 2020. The business hobbled along until right after the July 4 holiday, John Franchetti said, when restaurants got the green light to reopen locally.

It didn’t last long. Sonoma County soon shut down indoor dining again as coronavirus case rates spiked, and Franchettis’ was again limited to patio seating and takeout for months. Indoor dining was introduced in mid-March, and allowable capacity went from 25% to 50% on April 7. Franchettis’ landlord has never granted the couple a rent deferral, John Franchetti said.

The only revenue stream that has struggled more than the Franchettis’ restaurant is their catering business. Caterers have foundered for more than a year now with large-scale events prohibited.

“I don’t know how we’re gonna restart that,” Franchetti said. “Honestly, it is the labor. I can only do so much. We would need to continue to hire more people for the restaurant. And that’s always a risk.”

Hinman thinks the situation could remain grim for restaurateurs for months or even years, as government assistance dries up and labor costs remain high. But with virus transmission rates still dropping and California Gov. Gavin Newsom talking about fully reopening the state’s economic and social life on June 15 — and now a large federal fund to draw from — there is hope.

“That was tough,” Franchetti said. “That sucked. That was depressing. That was a mental anguish. But right now, it’s full steam ahead. I can’t open up all my doors. But we’re open for business. We’ve just got to follow the rules, whatever the government says they are.”

You can reach Phil Barber at 707-521-5263 or phil.barber@pressdemocrat.com. On Twitter @Skinny_Post.