News Source: www.baltimoresun.com
Baltimore-area restaurants saw a ‘year of financial hell.’ Yet fewer closed than predicted. Here’s how
News Source/Courtesy: www.baltimoresun.com

If 2020 were a person, restaurant owner Kimberly Ellis says, “I would beat the hell out of him.” Beyond the fear of getting sick, she faced lower revenues and a dispute with her landlord.

But things are looking up for Ellis and her business, Breaking Bread. Within the past year, she was able to receive grants, loans and other assistance to stay afloat. She ditched her previous location in Pigtown. She’s now working out of Mount Vernon’s Hotel Revival, preparing meals for hotel guests as well as customers who order through third-party delivery apps. More recently, she made an offer on a building at Park Avenue and Saratoga Street and hopes to move to a new location later this year.

Looking out on Baltimore from the top-floor view at the hotel, she said, “I want to say that we’re in a better position” than before the pandemic.

Ellis’ rebound, while exceptional, is not unheard of. Experts say the percentage of Maryland restaurants that shut down permanently is lower than expected. Instead, many evolved, upgrading online ordering systems, pivoting to carryout and even switching locations, as Ellis did.

They received help from local advocacy groups, including the Baltimore Development Corp., Downtown Partnership and the Restaurant Association of Maryland — and millions in federal funding.

Rebecca Dolan, owner of the Prime Rib in Mid-Town Belvedere, credits the federally funded Paycheck Protection Program with helping the storied steakhouse survive.

The Prime Rib, which opened in 1965, might have seemed to fall under the “less likely to survive a pandemic” category. It is famous for its intimate, indoor-only atmosphere, elegant servers and dishes like raw oysters and steak au poivre, not known to travel well. Before the pandemic, “We certainly had never needed or thought about creating a system for takeout,” Dolan said.

Complicating matters, Dolan had only recently taken over after the restaurant’s founder and her cousin, C. Peter “Buzz” Beler, died in 2019. She had just been getting into the groove when the coronavirus hit Maryland and Gov. Larry Hogan required restaurants and other businesses to shut down last March to prevent the spread of the coronavirus.

Dolan said federal aid made a difference. “But for that, we probably wouldn’t be in business.”

Local groups stepped in, too. The Baltimore Development Corp. disbursed millions in federal CARES Act funding to small businesses. Officials prioritized minority-owned businesses, which president and CEO Colin Tarbert said were having more challenges accessing loans through the Paycheck Protection Program and other funding streams. Data shows that businesses in communities of color were last to receive loans through the national program.

Ellis said the expertise that BDC offered through its technical assistance network also made a huge difference for her and others who might have no background in business management before opening: “Passion can only get you so far. Education is huge.” Though she was initially rejected for a PPP loan, she reapplied later and received a smaller amount.

Before the pandemic, Steve Chu, co-founder of the Asian fusion restaurant Ekiben, said he and business partner Ephrem Abebe had never considered that they’d have access to grants. “We’re [people of color]; we don’t really play that game.” The money helped cover new expenses like personal protective equipment for staff and hand sanitizer. They also upgraded their online ordering systems to minimize contact between customers and staff. “That’s not cheap,” Chu said. “It helped with all the extra costs we had to incur during COVID.”

The city’s Downtown Partnership, too, helped expedite permits for outdoor seating and purchased bulk gift cards to local restaurants through its Curbside Baltimore program.

Some assistance has come from local restaurants themselves. Jimmy’s Famous Seafood raised and distributed around $500,000 to various eateries through the Famous Fund, now a nonprofit. Now chaired by T.J. Smith, former mayoral candidate and spokesman for the Baltimore Police Department, the fund has coordinated with celebrities like former Oriole Adam Jones to contribute money and notify grantees that they’ve been selected. The fund was recently featured on “The Today Show”; in some cases, the publicity seems to help as much as the funding.

The fund has focused on Baltimore restaurants, Smith said, because of the city’s relatively tight restrictions on dining. Last December, for example, Mayor Brandon Scott banned on-premises dining while many surrounding county restaurants were allowed to operate at limited capacity.

Another noted nonprofit put local restaurants to work. World Central Kitchen, founded by celebrity chef José Andrés, launched the Restaurants for the People program, hiring local eateries, including Breaking Bread and Alma Cocina Latina, to prepare meals for the community.

“I’ll never forget: Getting that first payment from World Central Kitchen allowed me to pay my gas and electric bill,” Ellis said.

At the pandemic’s onset, the Restaurant Association of Maryland predicted around 40% of restaurants would close permanently, while some sources suggested rates could be 50% or higher. The early months of the pandemic seemed ominous, as neighborhood eateries like City Cafe and Maisy’s and high-end restaurants such as Chez Hugo and The Alexander Brown Restaurant closed. In Baltimore County, the Milton Inn, a fixture for decades, went out of business.

More recently, the Restaurant Association of Maryland revised its predictions, saying that the number of pandemic-related closures is likely to be about 25%-30%.

President and CEO Marshall Weston says the association helped stanch the bloodletting. During the pandemic, the group went from a trade association that lobbied mostly behind-the-scenes to leading lawsuits and holding news conferences. “We were able to demonstrate to the public the plight of restaurants,” he said.

Still, the pandemic’s financial repercussions may take years for businesses to shake off. Most spent whatever cushion they had ac

cumulated pre-pandemic. “The depletion of all savings and reserves ... that’s something that I think every business owner is concerned about,” Weston said. He estimates it will take years for them to rebuild reserves.

For much of the pandemic, coronavirus-related restrictions were tighter within Baltimore City than in the surrounding counties, a fact that angered many business owners and helped spark a lawsuit from the Restaurant Association of Maryland. A judge ultimately upheld the city’s ban on on-premises dining, calling it “a matter of life and death.”

Tony Foreman, of the city’s Foreman Wolf restaurant group, worries that the tougher restrictions in Baltimore will have a lasting impact. “There will be repercussions of that for a long time,” he said. “No question. People were driven to explore their options further.”

His restaurants like Cinghiale and Bar Vasquez are also suffering from a loss of business and tourism traffic, with no promise of that changing overnight. “Who knows what business travel is going to be?” he said.

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