An October proposal for additional emergency relief funding for the food and beverage industry remains dormant in the hands of the City of San Antonio Governance Committee led by Mayor Ron Nirenberg.
Meanwhile, restaurateurs know the winter months tend to be the slowest time of the year and some have warned that without substantial help further business closures are imminent in the coming months.
Councilman Roberto Treviño (D1) submitted the Food and Beverage Worker Relief Program proposal on Oct. 15. Such proposals, officially called Council Consideration Requests (CCR), require supporting signatures of four Council colleagues, but the mayor ultimately decides which CCRs advance to City Council for possible action.
The proposal does not cite specific dollar amounts but would require the City to develop a plan to provide industry-specific “business grants to assist with staffing costs that will keep employees current on food, shelter, and other basic living expenses.” Employee payroll typically accounts for about one-third of a restaurant budget, according to industry standards.
Treviño expressed confidence that the full City Council would ultimately support his CCR should the Governance Committee schedule it for discussion, but Nirenberg emphasized the aid the City has already facilitated for the food and beverage industry.
The City of San Antonio has so far contributed $8.7 million in emergency relief funding to the food and beverage industry as of Dec. 31, using money from the federal CARES Act initiated in March, an amount nearly 30 percent of the overall $29.2 million distributed to all small businesses. Other priorities such as housing, rental assistance, and workforce development have taken precedence over further relief.
Perfect storm, imperfect relief
According to the Texas Restaurant Association (TRA), an estimated 10,000 Texas restaurants have closed permanently since the beginning of the pandemic. TRA president and CEO Emily Williams Knight has called the late-December passage by Congress of a new $900 billion stimulus package “the lifeline restaurants needed at a critical juncture in our long-term road to recovery.”
However, the nationwide Independent Restaurant Coalition (IRC) issued a Dec. 21 statement saying “this bill falls woefully short of giving 11 million independent restaurant workers the job security they need,” citing the need for aid specific to the food and beverage industry.
“Dining restrictions, a surging pandemic, and winter weather are a perfect storm for a restaurant employment crisis,” the statement continued.
The IRC has advocated for the RESTAURANTS (Real Economic Support That Acknowledges Unique Restaurant Assistance Needed To Survive) Act of 2020, to establish a $120 billion fund “to provide structured relief to food service or drinking establishments.” Though the bill was introduced June 15, it expired Dec. 31 with the end of the 116th Congress and would have to be reintroduced.
U.S. Sen. John Cornyn (R-Texas) and Knight together voiced support for the food and beverage industry in a Dec. 9 Houston Chronicle op-ed, in particular to eliminate a potential $120 billion in unintended taxes unintentionally levied by the federal Paycheck Protection Program (PPP) that has helped many restaurants keep employees on the payroll despite government-ordered shutdowns and subsequent capacity restrictions.
In the op-ed, Cornyn and Knight cite National Restaurant Association estimates of 100,000 restaurant closures, or 1 in 6 nationwide, and the potential loss of $240 billion in 2020 sales.
They point out that “restaurants operate at the center of an economic ecosystem, with farmers, ranchers, wineries, brewers, distillers, maintenance and delivery companies, and all their families relying on a thriving restaurant industry.”
Will Grinnan, owner of The Republic of Texas restaurant on the River Walk, said his main concern was the chefs, cooks, wait staff, bartenders, hosts, and staff of San Antonio’s restaurants, particularly those that depend heavily on tourism.
Without more aid, Grinnan said, “unfortunately, the people that are going to hurt the worst are our employees. They’re not going to get the hours. They’re going have to find employment elsewhere until the city opens back up.”
Restaurants on the River Walk are particularly hard hit compared to their counterparts in other parts of the city, Grinnan noted, given limitations on takeout, curbside delivery, and outdoor seating that other restaurants have used to stay afloat. The initial round of PPP helped, Grinnan said, but that relief expired Aug. 8.
Recognizing the industry-specfic need, Bexar County stepped in with the Restaurant and Bar Recovery Grant Program, distributing $4.2 million in grants of up to $25,000 from Oct. 20 to Dec. 15. The County then announced a new round of funding with $1.4 million drawn from its general fund for additional grants to be distributed Dec. 22 through Jan. 12.
Fearing a cultural void
Treviño said his proposal, if adopted, could draw upon similar resources in the City’s coffers to offset the delay in new federal funding.
“In the meantime, we can support the food and beverage industry today,” Treviño said. “The point is really, really simple. We need to get this before Council, and provide a choice to support these businesses that are suffering and surviving day to day.”
Treviño said $17 million could potentially be moved from the stalled Alamo redevelopment plan to help fund his new relief program and other potential emergency aid. That money was issued as Certificates of Obligation specific to capital projects such as the Alamo Plaza redevelopment project, according to Jeff Coyle, City of San Antonio director of government and public affairs, and cannot be reallocated for emergency relief.
Another potential source is what Treviño called the City’s “rainy day fund” of more than $100 million set aside for emergencies.
“The question is, how much rain do we need?” he asked rhetorically.
Coyle characterized the City’s emergency fund as “critical reserves to be able to keep government running in the event of a full-out catastrophe,” including police, firefighters, and essential staff.
The mayor’s communications director, Bruce Davidson, said that the City has continued to provide assistance from existing federal funds, including $4.5 million added in November and December to the $4.2 million initially distributed to the restaurant sector. The additional funds were reallocated from other CARES Act funds as the overall COVID-19 relief program developed.
Regarding Treviño’s CCR, Nirenberg said “the City of San Antonio has been doing the work outlined in the proposal since last spring,” making use of CARES Act funds and other revenue “to ensure that assistance efforts continue without service gaps. City staff has been exploring additional revenue sources if that option becomes necessary.”
Nirenberg pointed to new federal relief funds expected soon as one potential source.
Davidson said the mayor has not ruled out bringing up Treviño’s CCR for discussion in City Council, and that the agenda has not yet been set for the next meeting of the Governance Committee, which has not yet been scheduled. It is not uncommon for CCRs to be introduced without being scheduled for full Council discussion.
Treviño and the IRC have both said the potential losses are too great to wait. In its letter to Congress dated Dec. 7, the IRC noted that only half of restaurant owners whose businesses closed say they are likely to “remain in the industry in any form in the months or years ahead.” The advocacy group warns, “our nation is losing a generation of of industry talent, knowledge, and entrepreneurial spirit.”
Treviño brought the issue home. He said the City needs to find existing funds to help “because we’re going to lose these businesses, we’re going to lose our cultural identity.” He said leaders in the restaurant industry helped draft the CCR to help ensure it would be effective if adopted, and that he hopes if any aid is forthcoming, “to roll this out as quickly as possible because we do need it. It’s needed yesterday.”
Given San Antonio’s status as a UNESCO Creative City of Gastronomy, Treviño said the city has “really hung its hat on these kinds of businesses. They could go away, and we may end up with large corporate chains that take over the void.
“We don’t want that. We want to make sure that we come out of this pandemic stronger than ever … with a vision to protect the things that we have really come to appreciate.”
This story has been updated to clarify the percentage of emergency relief funds to the food and beverage industry among all San Antonio small businesses, that funding for the Alamo Plaza redevelopment cannot be diverted to other purposes, and that the City’s emergency fund is reserved for basic governmental functions in the case of catastrophes.