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Restaurateurs lobby for more federal aid after fund runs dry

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Lawmakers and restaurant industry lobbyists are pushing for an additional $60 billion to replenish the Restaurant Revitalization Fund (RRF), a U.S. Small Business Administration effort that quickly ran out of money this spring after an onslaught of applications, leaving more than 177,000 operators still in need of funding.

Tyler Akin, the head chef at Le Cavalier at the Green Room in Wilmington, is a leading voice lobbying Congress to add funds to aid restaurateurs. | PHOTO BY NEAL SANTOS COURTESY OF BPG

That includes the bulk of Delaware applicants: Of the 763 restaurant operators in the state that qualified and applied for the RRF, only 37% received funding. That percentage is on par with national statistics, with nearly two-thirds of the 278,000 total applicants left in the dark.

The bipartisan effort initially secured $28.6 billion for certain eligible uses like payroll and rent, and just over 101,000 restaurants received funding. In Delaware, 286 restaurants were awarded a total of $67.8 million.

Restaurant owners and lobbyists say there is not enough money for many in the industry still struggling to stay afloat during the pandemic.

“That money ran out so quickly because so many restaurants are in need of help,” said Carrie Leishman, president of the Delaware Restaurant Association. “I’ve been receiving calls nonstop from operators who told me they put in applications and received word they were going to get funding, but ultimately they didn’t. The money ran out.”

Tyler Akin, the chef/partner of Le Cavalier at the Green Room in Wilmington, was one of 477 Delaware operators who did not receive RRF money.

“I was not one of the lucky ones,” said Akin, who submitted three applications for his restaurants. “Ultimately that is the real frustration: It became a game of chance for folks.”

Akin, who also owns two other restaurants in Philadelphia, said a “palpable competitive advantage” has emerged for restaurants that were awarded.

“It gives them the ability to raise wages and absorb food cost inflation,” among other advantages, Akin said. “It’s not only the environment that remains challenging: The playing field isn’t level.”

Le Cavalier, a modern French brasserie, opened during the pandemic, which required pivoting on the fly and ensuring staff members were kept safe while honoring the goal of serving the Wilmington community.

“We’re all hoping we can keep going at 100%,” Akin said. “But in the meantime, if the two-thirds of restaurants that were eligible for this program don’t get the money, there’s going to be a huge wave of closures. Dozens of restaurants in our community are hanging by a thread.”

While mask mandates and seating capacity limits have been lifted, restaurants are still reeling from revenue losses in an industry already known for low profit margins, on top of higher commodity prices, cut hours and fewer tables filled due to a nationwide workforce shortage and other pandemic-spurred challenges.

“Just because a restaurant doesn’t have a reservation available, doesn’t mean it’s health is good,” Akin said. “Restaurants are carrying crazy amounts of debt, the supply chain is in tatters, and the credit relationship between restaurants and purveyors is still seized up.”

Since the pandemic forced national restaurant shutdowns last March, the restaurant industry lost $290 billion in sales, 90,000 restaurants closed permanently or long-term and 1.5 million jobs have still not been recovered, according to the National Restaurant Association, which is urging Congress and the Biden administration to replenish the RRF.

U.S. Rep. Blaine Luetkemeyer (R-Mo.) introduced legislation last week that would provide an additional $60 billion to the RRF under the Entrepreneurs Need Timely Replenishment for Eating Establishments (ENTRÉE) Act, while a bipartisan effort is also gaining sponsors.

That money could be crucial for restaurants across the country. Akin said that while Le Cavalier is safe from closure, he may be forced to shut down one of his two remaining Philadelphia restaurants if he doesn’t receive funding: He already had to close one during the pandemic.

“The hope of RRF was vital to a restaurant’s survival and recovery,” Leishman said. “It wasn’t just the pandemic. The real challenge will be staying open for the next 24 months.”

The top 10 RRF recipients in Delaware were:

  1. Brew Haha! Inc. ($2.98 million)
  2. The Waterfall Catering Corporation ($2.08 million)
  3. Tortella Enterprises Inc. operating Paradise Grill in Millsboro ($1.72 million)
  4. Ale House Hospitality LLC operating Washington Street Ale House in Wilmington ($1.52 million)
  5. 216 9th Retail LLC operating Faire Cafe in Wilmington ($1.31 million)
  6. Big Fish Wilmington LLC ($1.16 million)
  7. RBEC LLC operating Lefty’s Alley & Eats in Lewes ($1.13 million)
  8. Nobeach Inc. operating Northbeach in Dewey Beach ($1.12 million)
  9. Seztex Inc. operating Harry’s Savoy Grill in Wilmington ($1.09 million)
  10. Prouse Enterprises LLC operating the Old Mill Crab House in Delmar ($1.05 million)

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