When President Joe Biden signed the American Rescue Plan into law in March, including $28.6 billion for the Restaurant Revitalization Fund program, it was a relief for struggling restaurateurs like Gladys Parada. Even before the application portal opened on May 3, she compiled the documents needed, showing she was roughly $119,000 in the hole since opening Babaloo Cuban Café in Seaside in 2020. Especially given the U.S. Small Business Administration’s three-week priority window for applicants who are women, minorities, veterans or come from a socioeconomically disadvantaged background, Parada – who, of Cuban descent, is a woman of color – thought it was a sure thing.
“I just got so excited,” she says. “I was so convinced this money was going to change my life. It was going to give operating capital, it was going to [change it to] where you’re not stressed with every dime that goes in and out.”
Parada’s own unemployment benefits had run out, and she wanted to give her two half-time staffers more hours. She applied, and began obsessively refreshing the SBA’s portal. She wasn’t the only one; the wildly popular program received about 186,000 applications in the first two days.
But the Restaurant Revitalization Fund, which promised to help America’s restaurants turn the corner after the pandemic shutdown, faced a series of challenges. The $26.6 billion allocated by Congress has all been spent, distributed to 101,000 restaurateurs. But more than 278,000 applied, requesting over $72.2 billion.
Now that the fund is out of money, leaving thousands of restaurant workers in the lurch, the Independent Restaurant Coalition is urging Congress to allocate additional funds, supporting the Restaurant Revitalization Fund Replenishment Act, which would provide another $60 billion. (Rep. Jimmy Panetta, D-Carmel Valley, is on a list of 179 co-sponsors in support of the bill.)
What’s doubly troubling to the Independent Restaurant Coalition, which supported the initial relief effort, is that applicants like Parada who were meant to get priority, did not. That’s because white restaurant owners sued the SBA, arguing successfully the priority system was unfair.
“Plaintiffs continue to suffer a real and concrete injury by having their application considered behind the priority applications because of race and sex,” the U.S. Court of Appeals for the Sixth Circuit ruled in a 2-1 decision in support of Antonio Vitolo, an owner of Jake’s Bar and Grill in Tennessee.
Parada was shocked when she learned her priority status wasn’t going to matter, but now she is accepting in her thinking about it, citing Martin Luther King Jr. “You can’t fix discrimination with more discrimination,” she says.
Relief funds aside, the path to reopening hasn’t been a straight line for many restaurants.
Parada envisioned lines out the door, but business has been slower than anticipated. “I really thought people were going to be rushing in here. It didn’t happen with the Red Tier, Orange Tier or Yellow Tier,” she says. “I thought, ‘Oh shit, the reality is it’s going to take the rest of this year to get back on track. It’s just not happening like I imagined.”
Meanwhile costs are going up. The price of pork rose more than $2/pound this month, and bread by 5 percent. (To help offset it, Parada raised the price on her classic Cubano by $1.50.)
At Ho-Wah Restaurant in Marina, owner Steve Chow is facing a 30-percent food cost increase, and is considering raising prices by 5 or 10 percent. “I have no choice,” he says.
While takeout has always been the bulk of Ho-Wah’s business, even that dropped off by roughly 35 percent during shelter-in-place. It’s slowly returning, but it isn’t quite back to where it was.
Chow has been able to make rent and pay his three employees, but the slow return of customers isn’t what he’d been hoping for: “It is getting better, but still it’s not good enough.”
He didn’t apply for federal aid, but he did receive $10,000 from Monterey County’s small business relief program – an amount that’s not even enough to cover three months’ rent.
“I hope the government will give more help to small businesses,” he says. “It’s not enough.”