Angie Devora celebrated the one-year anniversary of her restaurant, Meraki Creations, on Jan. 31.
The occasion was bittersweet. Less than two months after opening, the COVID-19 pandemic hit the Yakima Valley and the rest of the U.S., forcing restaurants to close or drastically scale back operations.
She spent most of her first year in business pivoting to keep her small staff working and her restaurant operating. She provided free lunches to seniors. She offered takeout. She sold brunch cocktail kits and charcuterie plates to go. She spent several months operating a mobile food operation at a local brewery.
“I feel blessed and extremely fortunate to be open at my one-year mark,” she said. “But it’s been extremely challenging — there’s no peace yet. We don’t know what the end entails.”
Reaching the one-year mark opened a door for Devora: She is now eligible for a loan from the Paycheck Protection Program. The federal program, which aims to help businesses retain jobs, was first introduced in the spring with the CARES Act’s passage, the first federal coronavirus relief program. Back then, Devora didn’t qualify because her business was new.
Such loans — along with numerous local and state grants — have provided restaurants such as Meraki Creations enough to keep the doors open for several more months while they try to comply with state restrictions.
“When you’re still accruing bills and debt, any help that is available to small restaurants has been wonderful and nice to see,” she said.
The Washington state restaurant industry said additional aid in the coming months would be crucial in helping restaurants stay afloat as the pandemic continues and restrictions remain in effect.
At the same time, no aid program has wholly covered the revenue restaurants have lost in the past year, said Anthony Anton, president and CEO of the Washington Hospitality Association, a statewide trade organization.
“It doesn’t replace what we’re losing,” he said.
Many restaurants have closed permanently. The Washington Hospitality Association estimates, based on calls to every restaurant in the state, that more than 2,300 restaurants have closed between March and September. About 49 of those closures came in Yakima County.
Massive financial losses
Anton said revenues have varied depending on a restaurant’s circumstances, but he estimates that a typical full-service restaurant in Washington state has lost about $25,000 a month when completely closed. Restaurants that manage to maintain some operations, either takeout or limited dining service, still can lose thousands of dollars in a single month.
As of August, about 20 restaurants in Yakima County received PPP loans of $150,000 to $5 million, and another 138 businesses have received PPP loans up to $150,000. The figures do not include loans secured during the current round of PPP.
The figure does not include grants issued through the third round of state business grants issued in recent months or for a grant program for businesses in Selah, which the Selah Downtown Association administered. In Selah, 19 restaurants and coffee shops received grants totaling $84,212, according to figures from the Selah Downtown Association.
Many of these businesses came into the grant application process with deep losses: Data from the Yakima County Development Association show that 45% of the restaurants and bars that received grants lost upward of 80% of their normal revenue and another 20% lost between 60% to 80% of their normal revenue. Just 3% of businesses had lost 20% or less of normal revenue.
Not surprisingly, restaurants have had to make numerous job cuts.
The Yakima County Development Association data provided to the Yakima Herald-Republic show that restaurant and bar grant recipients’ combined jobs decreased from 1,765 to 838 during the COVID-19 pandemic, a 53% drop.
According to preliminary data from the state Employment Security Department, Yakima County reported 800 fewer food service jobs year-over-year, a 12% drop.
For a family-owned Mexican restaurant chain with locations in Yakima, Union Gap, Zillah, Richland and Wenatchee, bringing employees back to work was a top priority.
The family was able to secure a PPP loan and hire back employees, though not at pre-COVID levels, said Rhonda Liebert, El Porton’s bookeeper, who oversees finances for all six locations
The restaurant also secured business grants for some of its locations.
The PPP loan “has kept us open; it has helped us tremendously,” she said. “To keep the employees working.”
Before she got the PPP loan earlier this month, Meraki Creations’ Devora received a local business grant.
“That’s been helpful in sustaining me, getting through a couple of months at a time,” she said.
That PPP loan she just received will help her sustain her business for several more months but doesn’t make up for all the losses she’s endured.
Still, she said she felt fortunate to have an accountant to help her get through the process, something she knows that some restaurants can’t afford. She said there are likely other restaurants that don’t have the means to secure a PPP loan.
And the application process is just one more thing to be done in a long list of tasks to stay afloat, she said.
“It’s a very stressful time,” she said. “Unless you own a restaurant, I don’t think people think how deep this challenge (of the COVID-19 pandemic) and the effects run into the business.”
Anton said his association, in guiding restaurants, often refers to the Stockdale Paradox, a concept mentioned by author Jim Collins: A business has to have unwavering faith it can and will prevail in the end, yet also be able to confront the brutal facts of the current reality.
In other words, restaurants can’t just have blind faith they’ll survive. They must address the brutal reality in front of them, Anton said. A restaurant must determine whether it can sustain itself over some time. If there is a path forward, then the restaurant can focus on pivoting. If the truth is that it would be financially challenging to stay afloat, a restaurant owner will need to address that issue.
“Address the hard truths,” he said. “Don’t try to ignore them.”
Customer support boosts morale
Liebert, the El Porton bookkeeper, emphasizes another critical part in keeping El Porton going — loyal customers.
“Our customers were a big part of why we stayed open,” she said. “Without them, we would have had to close down.”
State and local business organizations, as well as residents, have waged grassroots campaigns to encourage people to shop and eat local through takeout or purchasing merchandise and gift cards.
How much that translates into actual revenue for restaurants varies greatly, Anton said. For a restaurant in a busy neighborhood, that could translate to a substantial takeout volume that keeps it open. But for a restaurant located in a downtown area that now is surrounded by empty office buildings, such support may not make up for a massive loss in the restaurant’s core customer base.
However, strong community support can often serve as a morale booster and lift restaurant owners out of a state of hope and despair at the current situation, he said.
“The value of that cannot be underestimated,” he said.
Indeed, Devora, the Meraki Creations owner, credits community support for keeping her going. She notes that customers have been purchasing items, such as her brunch cocktail kits, to give as gifts for family and friends.
“I know for sure I wouldn’t have made it this far,” she said.
The goal is to reopen
In the end, however, the Washington Restaurant Association’s main aim is to help restaurants resume indoor dining. Currently, indoor dining is allowed for regions in Phase 2 of the state’s reopening plan, Roadmap to Recovery.
Only two of the eight regions are in Phase 2. Those two regions — West and Puget Sound — include the counties of Grays Harbor, Pacific, Thurston and Lewis and King, Pierce and Snohomish, respectively.
Restaurants have limited options under the restrictions.
In Yakima County, some restaurants have been able to open their indoor dining spaces by utilizing open-air dining. Restaurants can serve customers indoors if they have at least one wall with either one large garage door or multiple windows that can be opened. The idea is to emulate the open-air conditions outside indoors. The Yakima Health District has worked with restaurants who want to use the option.
El Porton was able to reopen several of its locations using the open-air dining concept a few weeks ago. The restaurant is also prepared to use funds from a second PPP loan for supplies to adopt additional safety measures.
Liebert, the restaurant chain’s bookkeeper, knows her company isn’t alone in making such efforts.
“Restaurants are doing everything they can to keep people safe,” she said.
Open-air dining isn’t an option for Meraki Creations. The restaurant’s small dining space makes it challenging to enforce low occupancy or physical distancing rules.
The restaurant opened for takeout for several weeks but again shifted to focus on large and special orders.
Devora said the constantly changing requirements to reopen have been frustrating, especially when other businesses can stay open, even during an outbreak, such as in the Costco store in Union Gap, where an outbreak resulted in 177 employees testing positive for COVID-19.
“I want to be in compliance. I want to keep everyone safe,” she said. “At the same time, I’m also trying to save my business and my dream.”
But while Devora has her frustrations about not being able to fully open, she’s also trying to stay positive. She has been relentless in her belief that she’ll be able to emerge on the other side of the COVID-19 pandemic.
“I look forward to my second anniversary,” she said.
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