Local restaurants fear catastrophic losses if coronavirus forces them to close
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This story has been updated.
Decatur, GA – In a week filled with emergency declarations and school closures due to coronavirus, Decatur’s restaurant scene on Saturday provided some semblance of normalcy.
The local restaurant industry is challenging on a good day, but the dip in business due to concerns about coronavirus spread has local businesses pondering a future where they will be forced to close indefinitely. If that happens, it could potentially wipe out the restaurant industry in Decatur and elsewhere, restaurateurs interviewed by Decaturish said.
A mandated closure of all restaurants and other businesses where people gather hasn’t happened in the United States yet, but it’s happening in France. It isn’t immediately clear who would order it. Right now, restaurants and other businesses are still open but advised to take precautions.
Eric Nickens with the DeKalb County Board of Health said the board is encouraging businesses to follow guidance from the Centers for Disease Control for employers. Downtown Program Manager Shirley Baylis sent an email to the restaurants advising them of what the city is doing to combat the spread of COVID-19, but it didn’t advise them to shut down. The Decatur Business Association on March 13 sent out an advisory titled “How to Stay Safe and Support City of Decatur Businesses.”
“Currently, many City of Decatur’s restaurants and retail stores are taking extra steps to ensure their spaces are clean and safe for customers,” the advisory from the DBA says. “Follow guidance from public health officials regarding social distancing and proper health etiquette if and when visiting businesses and public spaces.” The advisory also encourages people to support local businesses by shopping with them online and by purchasing gift cards.
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The National Restaurant Association notes that the CDC said, “Currently there is no evidence to support transmission of COVID-19 associated with food.”
With no mandatory shutdown order for restaurants in place and some extra scrubbing going on, restaurants were open for business on Saturday, March 14. The Brick Store moved ahead with plans for a St. Patrick’s Day celebration on March 14, which included a Mable-McNally parade.
“We are meeting at Fellini‘s parking lot on Commerce Drive at 10:30 AM. We will march from Fellini’s up to the pub along Commerce and Ponce,” the company said in a Facebook post. “We will raise a glass together. We will be mindful and cautious relative to current events.”
That mindfulness involved managing the crowd size. But it wasn’t long before social media users began raking Brick Store over the coals for holding the event.
“This is huge problem,” one commenter said. “You are encouraging people to make a very selfish decision. Public health professionals are telling us to behave AS IF WE HAVE THE VIRUS, because many of us likely do. Your patrons will be coming home to elderly family and neighbors. This is a very poor decision.”
Another commenter said, “I understand the financial implications of your decision, but this decision is negligent and will hurt your community badly. I love your restaurants and would hate never to go there again. I’m sure most of us would be willing to contribute to your gofundme or gift certificates.”
The Brick Store’s owners didn’t return a message seeking comment. But they weren’t the only restaurant in town feeling the stress of the coronavirus outbreak.
Restaurants join forces
Brick Store is a member of #ATLRestaurantsUnite, a campaign created by Iberian Pig owner Federico Castellucci to promote the steps restaurants are taking to combat the spread of the virus.
Concerns about the virus hit the Iberian Pig hard, Castellucci said. He said a complete shutdown would be “a total catastrophe” for his restaurant and others.
“We’re basically already operating at like 60 percent of what we would normally do in business,” he said. “So, we’re down 40 percent this week. Most restaurants cannot handle a 40 percent decrease in sales. They’d run out of whatever cash reserve they have within a couple of weeks.”
Castellucci said Iberian Pig no longer has any events on the calendar and has implemented distancing measures within the restaurant.
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“We were already removing tables in the restaurant and coming up with creative ways to make people feel safe and not spread the virus,” he said. “Table spacing is an important one. We went cashless temporarily. All of our bartenders, cooks, expediters all wearing gloves all the time. We’re disinfecting surfaces constantly.”
If restaurants were ordered to close, the economic impact would be felt throughout the business community, he said.
“The impact of something like that would be pretty instant,” Castellucci said. “You’d have a large number of restaurants never reopen. Then you’d run into defaults on all the leases, which would put the local real estate community into a recession and all the other dominoes that fall from there.”
The Iberian Pig’s landlords, Elissa and Suzanne Pichulik, said they sympathize with what their tenants are going through.
A black swan event
Restaurants do carry insurance for this sort of thing, but Castellucci was skeptical that insurance companies would want to pay out on multiple policies simultaneously.
“Any time these types of events happen, there’s going to be some sort of insurance component,” he said. “Insurance companies make money by collecting fees and not paying out. So, if all of a sudden, they have redemptions on all of the policies at the same time, insurance companies can’t do that. They go out of business or figure out legal ways to avoid paying. Everybody’s trying to evaluate their insurance strategy right now. I’m always of the opinion, in situations like this, insurance companies are not reliable.”
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Moose Wylde, General Manager of the Pinewood, notes that the restaurant is rebuilding after coming under new management and new ownership. Decaturish recently began producing the monthly improv show “Stuff Court” there which led to record sales but postponed it this month due to coronavirus concerns.
Wylde said the owners are looking at their insurance policy to see what the options are if there’s a mandatory shutdown of restaurants. They’re also in a conversation with their landlord.
“The question for the landlord is would you like to receive less rent for a long period of time, or would you like to receive no rent because we close,” Wylde said. “We’re in that conversation.”
Like other restaurants, Pinewood is doing what it can to prevent the spread of COVID-19.
“The discussion right now is what can we do to stay healthy — to stay physically healthy – and what can we do to remain alive as a business,” Wylde said. “We’re doing social distancing in the restaurant where we’re removing tables, so if you do want to come in and eat, there’s more distance between your table and another table. As of Monday, we’re going to be rolling out a more robust takeout program … Order online, pay online. You don’t have to handle food. The food is walked out to you. It can be placed in the passenger seat … But we are otherwise, attempting to remain operational until we are told otherwise.”
And if they are told otherwise?
“If we were to close our doors for a period of time, there’s a definite question about whether or not those doors would reopen,” Wylde said. “This is a black swan event. We can’t predict a global pandemic in your annual budget.”
Who has the authority?
It’s not clear who would order these businesses to close.
Nickens with the DeKalb County Board of Health wasn’t sure who would give the order.
“For example, most food service establishments fall under the Georgia Department of Public Health’s Environmental Health division,” he said. “Grocery stores would fall under the Georgia Department of Agriculture. There would be a tremendous amount of discussion between the governor’s office, state departments, state health officials and the business community before any decision of that magnitude is made.”
Decatur Mayor Patti Garrett said that kind of decision wouldn’t be made at a city level.
“I do not believe we have the ability to close private businesses,” she said. “I know that we don’t have the ability to say that people have to stay in their homes. It would have to come from the state. … Anything that would be that massive would I think probably be at the state level or at the federal level. Nothing that I have been made aware of indicates that’s where we are going. I think everyone’s waiting and seeing what’s happening and trying to be as careful as we can.”
A spokesperson for the Governor’s Office declined to directly answer a question about whether an order to close restaurants would come from the governor. The spokesperson instead provided a copy of a section of state code outlining the governor’s emergency powers.
To see the code section, click here.
Bob Light, owner of popular breakfast spot Pastries A Go Go, said his restaurant was also taking steps to reduce spread of the virus. The jelly jars at each table have been replaced with jelly packets and everything else is getting a deep cleaning. He said he hasn’t gotten official guidance from anyone in a position of authority about what he can do.
But he plans to stay open while being extra cautious about how he operates.
“I can’t make a living being closed,” he said.
Correction: An earlier version of this story contained an incorrect quote. The quote has been corrected.
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