🔒Restaurant owner, industry stay afloat with PPP, other relief funds

Like many restaurateurs in Connecticut and across the country, the past year has been a near endless struggle for Chip Kohn, owner of West Hartford’s Beachland Tavern, Beachland Smoke and Rockledge Grille.

As capacity limits dropped over the past year while expenses for government-required safety measures rose, the calculus of Kohn’s focus shifted from worrying about profits to simply minimizing his financial losses.

“Even with takeout orders increasing significantly, [business] was nowhere near where we were pre-pandemic,” he said. “It’s not a sustainable business model.”

Even as signs of optimism emerge in Connecticut with vaccination levels increasing and Gov. Ned Lamont scheduled to lift all capacity restrictions on May 19, the past 12 months have been devastating for the state’s restaurant industry.

The sector has seen nearly 600 restaurants permanently close, 90,000 employees — more than half of the industry’s workforce — lose their jobs, and collective revenue losses of more than $1 billion, according to Scott Dolch, executive director of the Connecticut Restaurant Association (CRA).

Kohn can relate. His employee count has dropped by more than one-third, from 85 last February to 55 today. He said he’s been frustrated by what he sees as mixed messages from policymakers that have disproportionately affected the restaurant industry.

“I don’t think [restaurants] were ever as dangerous as [people] made them out to be,” Kohn said. “We did everything correctly and we were still [treated as though] we were unsafe; restaurants became a scapegoat.”

Kohn points to the thousands of dollars he invested per restaurant to add safety features like plexiglass dividers, increase sanitation supplies and create socially-distant dining environments. Statewide, CRA’s Dolch estimates restaurant owners, on average, spent between $8,000 to $15,000 on similar upgrades.

While Kohn may have disagreed with the risk assessment of restaurants, he credits the federal government’s Paycheck Protection Program (PPP) with saving his businesses. Over the last year, nearly $70 billion in PPP funding was pumped into the restaurant industry, including all three of Kohn’s establishments.

He said he got more money in the program’s second funding round after switching lenders to TD Bank.

“We ended up qualifying for a lot more money because [the bank] really took the time to understand the details of our needs and went through all the details,” Kohn said. “It was a lot better for us.”

Making adjustments

TD Bank — the tenth largest lender of Paycheck Protection Program funding in the country — helped approve 129,000 PPP loans totaling $12 billion between both rounds of the program.

That included more than 86,000 loans in the program’s first six weeks, 28 times the average 3,000 small business loans the bank would approve in a typical year, said Steve Webb, TD Bank’s regional president for southern New England and upstate New York.

Webb says he credits TD Bank’s high-touch model and technology for attracting so many small business clients.

“We had relationship managers checking frequently with clients, asking what we could do and providing a sounding board, maybe listening about a new business plan,” Webb said. “With the pandemic, we knew many of our restaurants had to change their operating model.”

TD Bank, he says, helped with that, too. For instance, he said TD Bank helped many restaurants set up online payment systems in a timely fashion.

Like many restaurateurs, Kohn made multiple adjustments to his businesses. He set up outdoor dining in the parking lot at Rockledge Grille, housed on the grounds of Rockledge Country Club; redesigned the inside of Beachland Smoke; and partnered with Chow Now, a subscription-based food ordering app, which Kohn says has helped his restaurants stay in touch with customers and provides a convenient way for them to order food for delivery.

Dolch said he’s been most impressed with restaurant owners’ fighting spirit throughout the pandemic.

“They are not willing to just give up,” he said. “They are going to dig in and find creative ways to make [their business] work.”

That’s particularly important in Connecticut where the vast majority of restaurants — 70% or more, Dolch estimates — are independent franchises or mom-and-pop-style enterprises.

“Unlike some states, where many restaurants are corporate-owned national chains, in Connecticut, most of our owners are people you know in our community, they’re our neighbors,” Dolch said.

While many restaurants have been bleeding resources just to survive, Dolch’s association helped distribute $500,000 in private funding from DoorDash as $5,000 grants to nearly 100 restaurants statewide, including to Kohn.

“Every little bit helps,” Dolch said. “It can help to keep the doors open, pay rent or help with staffing.”

Latest lifeline

Dolch said he is more encouraged by the recently launched Restaurant Revitalization Fund, an SBA program with $28.6 billion earmarked specifically for emergency assistance to restaurants, bars, bakeries, food trucks and similar entities.

Funds were made available in early May to a wide range of food- and drink-serving businesses, including restaurants, coffee shops, food trucks and breweries. And instead of working through a lender, the Restaurant Revitalization Fund offers grants directly from the Small Business Administration.

Recipients are not required to repay the funding as long as they are used for eligible expenses.

For Kohn, the past year has taught him there’s a thin line, he says, from being successful and being out of business. He’s cautiously optimistic, as the days get longer and warmer, Connecticut’s vaccination levels rise, and he sees customers return in person that he hasn’t seen in a year.

But challenges remain, including rising food supply costs and loan payments he never imagined needing last February.

He said he knows recovery will likely be slow and it may take years to gain back his pre-pandemic bottom line. But, like thousands of restaurants across Connecticut and the country, he plans to keep pushing forward.