Local eateries reacted with dismay to the news that Congress would not be replenishing the Restaurant Revitalization Fund (RRF) as part of the 2022 Congressional omnibus spending bill. Nationally, 177,000 restaurants missed out on funding while 100,000 of their competitors were given a huge and unfair advantage — and that scenario is mirrored in New York and Hell’s Kitchen.
“It’s a crying shame that the RRF will not be re-funded. Some 60% of the applicants (including West Bank Cafe) got shut out the first time around. The pandemic seems to be coming to an end but the debt continues to accrue. There will be a lot of restaurants closing in the coming months. Tough times continue ahead,” said Steve Olsen of West Bank Cafe.
Sean Hayden, owner and partner at Jasper’s Taphouse and Kitchen and Alfie’s as well as neighboring McCoy’s, Dalton’s, and Valerie, expressed frustration with Congress’s handling of the RRF application structure. “Some businesses were really relying on it to pay back rent and make up for devastating losses caused by the pandemic,” he said.
“To add salt to the wound, only one-third of the people who applied got it, leaving two-thirds shut out. The issue is the way Congress and the SBA structured it in the first place — no restaurant needs $5 million dollars. Some restaurants got $5 million and the guy next door got zero. Even if it was structured in a way where everyone got something, that would have been more beneficial to the industry. You will see a lot of empty stores and people losing their life savings as a result of this decision. It’s definitely a blow to the future of the restaurant business,” Hayden added.
The RRF, established by the Biden administration as part of its COVID American Rescue Plan Act relief package, was initially granted $28.6 billion. Nearly two-thirds of applicants were denied funding, including many local eateries. Hell’s Kitchen spots did not fare as well as some other areas — applicants received an average of $818,363, while some Midtown restaurants were given nearly double that amount, at an average payout of $1,691,143. Three weeks after the RRF opened in May 2021, the fund ran out, leaving local eateries empty handed. The proposed re-funding of the RRF was meant to award the remaining applicants.
Now, as the proposed replenishment is removed from legislation, industry advocates are left with no choice but to seek relief elsewhere or propose an entirely new bill — leaving hospitality organizations fuming.
“Today’s news that Congress is walking away from the RRF is a gut punch to the 177,000 restaurants who now have some incredibly difficult decisions ahead of them. The pandemic is over for much of the economy, but small business restaurant owners have taken two steps back with every variant,” said Sean Kennedy, EVP of public affairs for the National Restaurant Association in a statement.
Independent Restaurant Coalition executive director Erika Polmar said in a statement: “Thousands of neighborhood restaurants are going to close as a result of Congressional inaction on the Restaurant Revitalization Fund. Communities aren’t just losing the institutions they love, they are losing the jobs they need. This is a catastrophic day for independent restaurants.”
One neighborhood restaurant in distress is La Vela Dining & Bar. Said owner Antonio Mauro: “Due to the lack of help from the government, I am in debt. My credit score has gone down significantly due to non-payment of credit cards during the pandemic, and I’m not able to make any improvements to the restaurant. I’m just hoping and praying that tourism, theater, and Javits Center traffic comes back to the neighborhood. I’m very disappointed in how they handled the situation — some restaurants got funded, leaving the rest of us behind to struggle.”
Added James Gwynne of Hudson Station, “It is a death sentence, especially with predatory big landlords looking to extort and evict mom-and-pop shops. It was bad even before the pandemic — a lot of these companies make more money with empty store fronts than they do with current tenants. They don’t care about small businesses, families, or neighborhoods. They want Starbucks and banks to be everywhere.”
“This is so sad and devastating but we will keep fighting. I’m speechless,” said Kevin Lee from At Nine Thai on 9th Avenue.
An estimated 90,000 restaurants have already closed during the pandemic, and increased operating costs due to inflation have further exacerbated the challenges of staying open. Some restaurants have turned to independent fundraising in the absence of federal support, while private companies like Resy and American Express have offered to step in, throwing a lifeline at struggling eateries. Pat Hughes, owner of Scruffy Duffy’s and Hellcat Annie’s on 10th Avenue even tried to sell his bars for bitcoin. Reacting to yesterday’s news from DC, Hughes told us: “Shit out of luck! Bars for sale again.”
Industry advocates and Congressional allies were adamant that the fight would go on. Sean Kennedy of the National Restaurant Association said: “We will continue to pursue an all-of-the-above-agenda to rebuild and advance the nation’s second-largest private employer.”
Added Sen. Ben Cardin, a Democrat representing Maryland and chairman of the Senate Committee on Small Business & Entrepreneurship who had previously proposed a re-up of RRF funds — “Had Congress not acted quickly to replenish the Paycheck Protection Program when it ran out of money weeks after it opened, the program would today be remembered as a half-measure. Instead, we extended the emergency aid needed to meet the crisis we faced — and that is exactly what must be done again.”
Back in Hell’s Kitchen, Jeffrey LaPadula of non-profit plant-based restaurant PS Kitchen remained hopeful. “We we were glad to hear that so many businesses were saved by the RRF previously and it would have been helpful for us as well,” he said. ‘We just want to make sure everyone understands that if you love a restaurant, support them as much as you can, because with RRF off the table it’s more important than ever that we have people visiting us and supporting us!”