Restaurant leaders respond directly to President Joe Biden's State of the Union

Hours after President Joe Biden's inaugural State of the Union speech Tuesday night, restaurant and bar industry leaders called on the administration for action.

Chefs, restaurant owners and leaders of the Independent Restaurant Coalition spoke to media Wednesday in tandem with a new letter signed by over 100,000 restaurant employees urging the president and Congress to add much-needed money to the bipartisan-backed Restaurant Revitalization Fund.

"I felt a little disappointed that it wasn't addressed that our need is as dire as it is. The opportunity has not been lost, but that window is closing very quickly," IRC board member, San Francisco-based chef, and co-owner of Che Fico, David Nayfeld said. "The president could have had an opportunity to recognize us in that moment, but it's not too late. He can recognize it through action. I don't care if we were in a speech, I care that the program gets refilled and that his actions speak to his values."

The urgency of the IRC's message comes nine days out from the March 11 expiration date for the Continuing Resolution, commonly referred to as the spending bill to add money to the RRF.

"The state of the union is not strong when neighborhood restaurants and bars are ready to close permanently," Erika Polmar, executive director of the Independent Restaurant Coalition, said.

After nearly a year since the RRF became law, it has failed to support roughly two-thirds of eligible businesses that applied for the program, leaving out nearly 200,000 independent bars and restaurants with four out of five of those businesses in danger of closing permanently, threatening the nearly 11 million employees it supports.

IRC co-founder Tom Colicchio reiterated thanks for early support from Senate Majority Leader Chuck Schumer along with others who came together in Washington, D.C., to include $28.6 billion for the industry as part of the American Rescue Plan, but said it's not even close to enough.

"As great as that was that really only took care of about a third of the restaurant applicants -- and he knew at the time that that money wasn't enough -- he actually called it a downpayment for our industry," Colicchio, the Crafted Hospitality owner and restaurateur said. "It's almost a year later since he made that declaration and there are almost 20,000 restaurants in New York City alone that have applied for grants and still have not received a dime."

Like many, Colicchio's own restaurants in New York City have been at the epicenter of multiple COVID-19 surges that prompt tighter restrictions, closures and smaller crowds, which has directly impacted business.

"I owe at least a million dollars in back rent. So all the business coming back is not going to do that. At a certain point I'm gonna have to make a decision if I can't pay my landlord, I'll have to declare bankruptcy and close cause there's no way we can find that in the current business we have now. Eventually landlords are going to run out of patience and restaurant owners will be closing their doors in droves," he said.

Nayfeld said as the third year of the pandemic nears, it has become "impossible for most restaurants to withstand the compounding debt, rising costs, revenue-decimating local restrictions, and COVID-19 surges without dedicated help from Congress."

"Replenishing RRF is the only way independent restaurants and bars can recover from the past two years of economic trauma that we've endured and the aftershock we'll continue to experience," he said. "To take that little bit of money to reopen a business, buy back inventory, get a little momentum for six to seven weeks, then shut down again, that loss of momentum is so detrimental to the business -- Omicron was something for a lot of restaurants was the arrow through our bodies that's gonna make us limp along and die from later."

He continued: "If I could make a plea to Speaker Pelosi, my elected official, I would ask that she drive down the streets of downtown San Francisco and see the boarded up cafes, restaurants and bars that won't come back without assistance -- Even the owners of the ones that look busy, I promise you they would say that they're stressed, their bank accounts are dwindling, in debt to their eyeballs and they don't see a solution."

President Biden addressed the economy and inflation on Tuesday night, but Colicchio said while problematic for the restaurant ecosystem, it's not the primary pain point for the tens of thousands of independent owners and operators seeking relief from the last two years.

"Prices of food are going to go up -- that's why the restaurants that didn't receive grant money are at a competitive disadvantage," he said. "The roughly $40 billion we're asking for will cover the grants for all the restaurants that have applied and I don't believe that that's going to be inflationary. A lot of that money is not gonna go out and be spent, it's going to pay bills that are already there."

Inflation paired with increasing fuel prices will inevitably impact the local, independent restaurant supply chains and Colicchio said that "upscale restaurants have pricing elasticity" to stay nimble. But without support from government grants, he said, "all the small neighborhood restaurants that don't have that -- are going to get really hurt and those are the restaurants that we're really fighting for. Those mom and pops and neighborhood restaurants cant raise prices by 15%, the clientele won't absorb that. Another reason why we need to complete this funding. We're not asking for anything additional from our original position, we're just asking for government to finish their job."

At least 90,000 restaurants and bars have closed since the beginning of the pandemic, according to the National Restaurant Association. The unemployment rate for leisure and hospitality is still 8.2%, about double the economy-wide rate, as restaurant and bar employment is still down 984,700 below its pre-pandemic levels.

Polmar explained, as detailed in a January IRC report, that "neighborhood restaurants and bars are deeper in debt and exhausted every possible option. Our industry is organizing for the second time in five weeks because the only hope we have is for our elected officials to hear our pleas and ensure every single restaurant and bar has the relief they need to survive the pandemic."