Mayor Lori Lightfoot announced a $10 million federally funded grant program on Thursday intended to help independent Chicago bars and restaurants struggling with shutdowns brought on by the coronavirus pandemic.
As COVID-19 cases in Chicago continue to surge this fall, along with the rest of the country, bars and restaurants in the city and state have been hurt by being closed to indoor dining. In addition, the mayor said she will propose a temporary cap on the fees that third-party delivery apps can charge restaurants, which will need to be approved by the City Council, and launch a web portal, ChiServes.com, to help hospitality workers find workforce development resources, she said.
“With the state’s recent closure of indoor dining service, our hospitality industry is facing yet another barrier to recovery from this absolutely unprecedented crisis that has hit them probably the most hard of any industry in our city,” Lightfoot said.
Restaurant operators contacted by the Tribune were thankful for the help but noted it’s not enough to sustain them through the coming cold weather at a time when their dining rooms will be off-limits to patrons because of coronavirus restrictions.
In recent weeks, Lightfoot has attempted to position herself as a friend to bars and restaurants after Illinois Gov. J.B. Pritzker shut down indoor service due to a spike in COVID-19 cases. She criticized Pritzker’s plan and said she would try to change his mind before dropping her opposition a day later.
But Lightfoot also has faced criticism for stricter rules on liquor sales, which she’s since rescinded, and her own anti-coronavirus measures.
Under Lightfoot’s plan, eligible businesses could get up to $10,000 each in grant funds. The grant money will be funded through the city’s share of federal CARES Act money and will be distributed through a lottery, Lightfoot said.
Businesses can begin applying later this month, and the funds would be released before the end of the year, Lightfoot said.
“We will take extra effort to make sure this funding is distributed with an equity lens, just as we have done throughout this pandemic. Meaning businesses in our most underserved, underinvested communities have access to these emergency funds,” Lightfoot said.
Lightfoot also said the city will promote a contest where residents who order takeout from 10 different bars and restaurants will be entered into a contest for “VIP tours” at institutions including Soldier Field and the Art Institute.
As she laid out her relief measures on Thursday, Lightfoot also called on the federal government to pass a new round of stimulus funding with help for small businesses.
“Make no mistake, today’s announcements are by no means fixes for the many challenges that the hospitality industry currently faces,” Lightfoot said. “They’re the result of our city and our partners working together to use every last resource we have to support our businesses in the best way we can all while being guided by our values of equity and inclusion.”
Kevin Boehm, co-founder of Boka Restaurant Group, praised the mayor’s grant program, saying “everything helps,” but noted that even $10 million will only go so far.
“Ultimately, we need substantial help from the federal government,” said Boehm, whose hospitality group is one of the largest in Chicago, operating such restaurants as Boka, Girl & The Goat and Swift & Sons. “Either a PPP (Paycheck Protection Program) with a specific carve-out for restaurants or passage of the RESTAURANTS Act.”
Boehm called Lightfoot’s proposals a good move at the right time — when restaurants are heading into the cold-weather months.
“Heading into winter, we clung to two hopes — the limited indoor seating we had and the RESTAURANTS Act,” he said. “Then we watched the RESTAURANTS Act turn into a wrestling match between (House Speaker Nancy) Pelosi and (Senate majority leader Mitch) McConnell. And then the end of indoor dining.”
Which, Boehm said, spelled the end, at least temporarily, of some Boka Group restaurants.
“We haven’t closed them permanently, but we had to hibernate restaurants that didn’t make sense in delivery,” he said.
Specifically, Bellemore, Cira, GT Fish & Oyster and Lazy Bird are shuttered until further notice.
“We already knew we were going to lose money,” he said. “We kept things moving to keep our employees intact. But once they eliminated indoor dining — you know, rents stay static. We can lose this much money, but we can’t lose this much money.”
Some, such as Simo Yacobi, owner of Chez Simo Bistro, a small BYOB French restaurant in Ravenswood, view the grant program with a certain fatalism.
“I’ve tried every program; nothing works for me,” Yacobi said. “I applied to five, six different programs and never got anything. I’ve given up applying. I don’t know which is worse, not having help or waiting for months and not getting anything. I haven’t made a penny for myself in the last six months.”
Still, Yacobi said he might try the grant program Lightfoot announced.
“They shut us down, they should at least give us some help. If you’re going to shut us down, find the solution.
“You know, in November and December, we make about 30% of our money,” he said. “If we don’t make any money, it’s over. This is the 12th round.
“I don’t know how I made it this far anyway,” he said, with a short laugh.
The bistro, which has no outdoor space available, finally turned to carryout and delivery last month, Yacobi said. From that standpoint, the chef and owner welcomes Lightfoot’s proposal to cap third-party delivery fees.
“They take 30%, that’s a big chunk,” he said. “If (the city) does that, I might be able to lower my prices.”
The mayor on Thursday did not say what number she would cap the delivery app fees at but pledged to work with Ald. Scott Waguespack, 32nd, Ald. Tom Tunney, 44th, and Ald. Matt O’Shea, 19th, on her plan.
Waguespack introduced his own ordinance back in April to cap restaurant delivery fees at 5% of the cost of the order. It also would have required any service fees charged to customers go to the delivery drivers rather than the companies.
Third-party delivery companies opposed the Waguespack plan, saying it would actually increase costs to customers, and the plan was shunted to the Rules Committee, where it has languished since.
Rules is where proposals opposed by the mayor’s administration are often sent to die. Lightfoot introduced her own plan to require third-party services to disclose all their fees.
At Lightfoot’s news conference, Tunney said he hopes to work with delivery app companies on the proposal.
“If the restaurants go out of business, there’s nobody to pick up from,” he said.
Nevertheless, delivery companies pushed back against the notion of imposing caps, arguing they could harm businesses.
DoorDash released a statement saying, “Capping commission rates can reduce or even remove the ability for restaurants to choose the services and products that best serve them. More than ever, restaurants need flexibility to decide how they operate and market their business. We’re committed to working with the city on this issue to find a solution that supports restaurants, Dashers, and customers.”
Uber Eats also released a statement arguing against a cap, saying it would “simply shift the costs back onto small, local restaurants who can afford it the least, while also capping the earnings of many hardworking Chicagoans who work as delivery drivers.”
A Grubhub spokesman said in a statement that “Fee caps are well-intentioned but counterproductive at a time when restaurants need more support, visibility and order volume than ever. They limit how restaurants — especially small and independent establishments — can effectively market themselves to drive demand, which severely impacts how many customers and orders we can bring to these restaurants. The caps lower pay for drivers by reducing the number of orders to be delivered; reducing restaurant orders; increasing costs for diners; disrupting an essential supply chain of meals; and costing jobs, tax revenues and important economic activity.”
Boehm, however, praised Lightfoot’s call for a city ordinance that would cap fees levied by third-party delivery services.
“I think that’s a smart provision,” he said. “Right now, everybody has to lean back into doing takeout, and a lot of those fees are exorbitant. Ultimately, I think Mayor Lightfoot cares about our industry and wants to help.”
Cases in Chicago, meanwhile, continue to spike, public health Commissioner Dr. Allison Arwady said during a Thursday webcast. The city is up to 1,395 new cases per day, up nearly 50% from a week ago, she said.
“It is rising really quickly,” she said.
Chicago’s positivity rate is roughly 11%, more than double where the city would like to be.
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