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‘We’re not looking for a bailout’ say top American chefs — but it might be what the restaurant industry needs to survive

Speaking on behalf of independent restaurants across the country, the Independent Restaurant Coalition sent a letter to Congress Monday, detailing the new federal actions needed “to ensure we survive not just the near-term crisis, but the long-term negative impact on revenue.”

Expressing gratitude for the recently established CARES Act, the group nevertheless likened it to a “temporary lifeline” that is insufficient to ensure the industry’s survival.

In a teleconference call Monday afternoon, Tom Colicchio, Kwame Onwuachi and Naomi Pomeroy — three of the more than a dozen chefs and restaurateurs who established the coalition last month — spoke of the challenges facing the restaurant industry now and in the future, and the need to take action now.

“We don’t want restaurants to be able to open, and then fail because the business is not there,” said Colicchio, whose Crafted Hospitality owns and operates restaurants across the nation and who is well-known as a judge on Bravo’s “Top Chef.” “We’re not looking for a bailout; we’re looking to get back to work.”

The COVID-19 shutdown hit the restaurant industry particularly hard. Restaurants are a low-margin industry — 10% profitability is much better than average — with high labor costs. Millions of restaurant workers have lost their jobs. Though some restaurants have managed to remain open via carryout and delivery service (often bringing in a fraction of the income needed for long-term viability), many have shut down completely, including small restaurants (Elizabeth, Piece Brewery and Pizzeria, Vie) and large groups (Boka Restaurant Group, One Off Hospitality).

Among the concerns voiced on the teleconference are the limits of the Paycheck Protection Program, which allows businesses — not just restaurants — to secure capital and rehire employees and, given certain conditions, have the loan forgiven. But that takes place within an eight-week window; for restaurant owners, who don’t know when they will be allowed to open their doors, the timing most likely will be problematic.

“If we have to use the program now,” said Pomeroy, chef/owner of the acclaimed Beast in Portland, Oregon, “we hire back our employees, and when the time is up, we have to lay them off because we still won’t be open. Our concern is that 2020 is going to be a wash; we don’t want to put businesses at risk by the very thing we’re trying to help them with.”

Waiting to apply for the program until a reopening time frame is better known has its own downside, as the fund, even at $350 billion, is dwindling rapidly, and may soon be oversubscribed.

And when restaurants are able to reopen, many, if not all, will begin with debt (money owed to suppliers at the time of the abrupt closing), low customer counts (nobody expects full dining rooms right away) and as-yet-determined new regulations.

“Once it’s time to reopen, there will be huge obstacles ahead,” said Onwuachi, the Rising Star Chef of the Year winner at last year’s James Beard Awards. “Without proper action, this will fundamentally alter our communities.

“If kitchens are the heartbeat of the home,” Onwuachi said, “restaurants are the heartbeat of the nation.”

Among the actions requested by the coalition:

Extend the Paycheck Protection Program to run three months after restaurants are allowed to reopen.

Increase the amount of PPP funding, and reinstate the $500 million gross-revenue cap that, the coalition argues, will make more funds available for small, independent businesses.

Increase loan repayment to 10 years from its current 2 years.

Create a jobs-provider rebate giving tax relief to restaurants based on how many people they employ; and a rent rebate to help restaurants maintain their leases through the recovery.

Create a dedicated restaurant-recovery fund.

Require business-interruption insurance to cover COVID-19 shutdowns.

The full letter to Congress can be found here.

pvettel@chicagotribune.com