Restaurants

Left to right:

Jake Grindeland says the purchase of a food truck helped his business break even during the last shutdown.

Scot Taylor, owner of Meister’s Bar & Grill in Scandia, barely missed the cutoff to receive state funding based on certain months. 

Ron Vannelli had plans to retire in 2020, but now won’t be retiring for a couple more years.

Restaurants face uphill financial battle

Editor’s note: This is the second article in a two-part series on how three restaurant owners are faring through the pandemic. Part one can be found in the Feb. 4 edition of the Forest Lake Times or online at tinyurl.com/3kpdqpvv.

During the closures of indoor dining, Scot Taylor often worked during the day as a one-man show at his restaurant, Meister’s Bar & Grill in Scandia: cooking, cleaning, and trying to keep up on the business end of things. He’d bring in two members of staff during the evenings to try to handle orders, of which there were very few.

“The first time we closed to takeout only, business was about 15%, which was something, but not great. The next time we closed and Wisconsin was open. In this area, I was down to doing two orders the whole day,” Taylor said. 

Ron Vannelli, owner of Vannelli’s on the Lake in Forest Lake, said that his business is down 45% in total from last year.

“As soon as outside dining ended, it went down. The numbers were terrible,” he said. 

Layoffs were inevitable, but Taylor worked hard to give his employees some hours. 

“I laid off 80% of the staff,” he said. He worked during the day, and then kept one bartender and one cook at night through the closures for takeout. “The only reason I did that is to give them hours because they can’t survive off the unemployment. We’d sell $140 worth of food in a day to go, and my labor costs are $170 that day.”

Wyoming’s Cornerstone Pub & Prime owner Jake Grindeland said his business is down 50% from last year and credits much of the fact they’re able to stay afloat to two things: his personal minimalist style of living and a recent purchase of a food truck for the restaurant.

“It saved us,” Grindeland said. He originally purchased the food truck as “just something fun to do and good for marketing” just weeks before the pandemic first forced closures, he said. It wasn’t operational until the second shutdown, but that helped keep Cornerstone out of the red during the closure.

“It took us from a loss to a break-even,” he said. “We were just doing to-go’s from 4 to 8 p.m. here, and 11 a.m. to 4 p.m. out of [the building]. We were doing close to double sales in the food truck than in the restaurant with two people staffing the whole thing, and I was one of them.”

Singled out

In a time when the closures felt like a stab, the singling out of restaurants felt like a twist of the knife, restaurant owners say. 

“I don’t wanna throw anyone under the bus,” Taylor said. “I’m closed or have to social distance, and then you walk into Sam’s Club and it’s 1,000 people. There are 100 people in line at Starbucks. Liquor stores, they’re at 300% sales for the year. They love it. They’re profiting off it. So just to see that is hard. It’s hard for someone to say, ‘You close, you stay open, you close, you stay open.”

Vannelli is skeptical of the governor’s data claims saying restaurants were a big part of the spread. He said he hasn’t received any communication from customers or contract tracers to let him know of any exposures that might have happened in his restaurant, something he says indicates to him a difference in what the Governor’s data suggests. 

“I’d like to see the numbers they’re using,” Vannelli said. “Sure, there was a spike and a drop. Was it necessarily all caused by one industry? That’s the difficulty I have.”

“I think as long as we’re playing by the rules, ... leave it up to us. We’re used to the regulations, so just let us do our job. Trust us to do our job,” Grindeland said. He also questioned the statements the governor made about the COVID-19 spread from restaurants. 

“I’d like to see the data,” he said.

Taylor wants others to know that restaurant owners like him aren’t ignorant of the pandemic and its health implications.

“People are sick and people are dying. I know this is serious, ... but I would’ve liked to see everybody close for a while. I think we’ve taken the brunt of it,” Taylor said.

Loans and grants

Navigating applying for loans and grants have been difficult, but for Taylor, he said certain restrictions on eligibility for the state’s financial support for small businesses kept him from getting any state funding. He received a Paycheck Protection Program loan for $14,300. For Minnesota’s funding, businesses had to do 30% less revenue from 2020 to 2019 to qualify, but said that was only for the months of April through September. 

“That’s a head-scratcher,” he said.

Meister’s, given its number of employees, would’ve been eligible to receive $15,000, according to the state’s website. Within those months, Taylor said he was less than 5% from the cutoff.

“If I would’ve just closed [for takeout], I would’ve got it. ... I didn’t make a dime in those months. I should’ve just been closed and got the $15,000,” Taylor said. “I didn’t understand. Why didn’t [Gov. Tim Walz] pick the whole year? And then, if not, why not pick that through December?”

What financial assistance Vannelli’s received, he knows it hasn’t been nearly enough. 

“The money hasn’t helped, because if it did, we’d be where we were before. Is the gap narrowing? Maybe, but I don’t think so,” Vannelli said.

The future

All three restaurant owners say they believe they’ll make it through the pandemic. 

“I am in a unique situation where I don’t have a lot of personal expenses,” Grindeland said. He considers himself a minimalist, doesn’t have a family, and doesn’t have any outstanding debt outside of the business. “When we shut down, I stopped paying myself. I think that’s the biggest benefactor to us being OK.”

Taylor feels confident Meister’s will be a staple in Scandia for the long run. 

“I’m lucky,” he said. “I have a great family, I’ve ran this business successfully for 16 years, and my wife does really well.”

Despite the financial difficulties of the restaurant, Taylor, with the help of his wife, gave away 150 free Thanksgiving meals to some elderly residents of Scandia, knowing many of them weren’t going to be gathering with family for the holiday due to the virus and might not have a Thanksgiving meal otherwise.

“Morally, I thought we should help out if we can,” he said, adding, “It wasn’t a big cost for us to absorb.”

Yet there are serious financial struggles for the owners, some of which aren’t necessarily COVID-19-related, but add to the growing concern over a tipping point. Vannelli said he sees his restaurant making it through the pandemic, but he has significant concerns over President Joe Biden’s push to increase the minimum wage to $15 per hour, specifically for tipped wage-earners. 

“Yes, I see a light at the end of the tunnel for COVID. I see that as a positive, but there’s this lingering thing over our head that’s going to carry on for the next three to four years is going to be a very tough one to solve,” he said, talking about the repayment of the loans and the wage increase.

“It’s like everybody always says, ‘If you ever want to sell a bar, just advertise it as a gold mine for sale, because that’s what people think they’re getting.’ ... The reality is our profit margin is probably one of the worst. The food industry is one of the hardest. We’ve lost money, there’s no question about it,” Vannelli said.

“I think this is going to hurt me for a long time inside the restaurant,” Taylor said. “We used to have a 45-minute wait every Friday and Saturday. I haven’t seen a wait since last March.”

In the long term, both Taylor and Vannelli said the pandemic has pushed back retirement plans. Taylor said the financial setbacks during the pandemic have set him back in paying off his mortgage by roughly five years, and anticipates that to change his retirement plans. Vannelli had planned to retire in 2020. He hopes he can in “maybe a couple years.” 

Grindeland, on the other hand, is just entering his fourth year of ownership and sees himself owning Cornerstone for decades to come. 

“For the circumstances, we’re doing OK. Cornerstone is going to be here. My goal is to be here for another 30 years, and we’re on track to be there, barring any more shutdowns. ... I finally got a grip on how this industry works, and if I can make it through a pandemic, the other side of this is going to be cake,” Grindeland said.

 But he warned that he suspects many restaurants will close in the years to come as they face the financial burden of paying back the loans granted to them through the government. 

“The repercussions have not even begun yet. It’s the beginning. It’s all borrowed time because of the PPP loans,” he said. 

That suspicion is shared by Taylor.

“I think in the future we’re going to see a lot more places close because they’re not going to be able to pay their loans. Everybody I know has had to get a loan,” Taylor said.

Community support

If there’s one silver lining, owners say the encouragement they receive from people and the acts of kindness strangers bestow on them or their staff has helped them make it through a difficult time.

Grindeland said he’s been appreciative of the customers who’ve continued to support his business. 

“It’s completely worth it when we have a Friday and Saturday night when we’re packed full [to allowed capacity], our customers are happy, and our food is coming out great. It’s rewarding,” he said. 

Recently, a customer at Vannelli’s asked management to consider which member of the staff on shift might be in the most need financially. Vannelli picked a staff member, and when the customer came to pick up her takeout order, she gifted the worker with a significant tip.

“She gave [the staff member] her stimulus check: $600, just anonymous,” Vannelli said. “We see that [sort of thing happen] a lot. ... It’s nothing near what we need, but it makes you feel that when this wasn’t going on, we were impacting the community in a way that people appreciate what you’re going through in hard time, and try to respond as much as possible.”

‘We’re all drained’

In the 10 months since the pandemic forced the first closure of restaurants, owners have been on a roller-coaster, they say, working many hours themselves because they had to lay off staff, struggling to retain staff through the shutdowns, and trying to keep up with an ever-changing business world.

“My staff and I are all drained. We’re all drained,” said Taylor. “It’s been hard.”

The physical, mental and emotional exhaustion is wearing him and his staff thin, he said.

“It is significantly draining,” Grindeland said. “I’m here open to close most days. It’s perfectly fine, and I’m more than happy to do it, but it gets to be a little much sometimes.”

“It’s a tough situation,” Vannelli said.

Taylor reiterated that he knows the seriousness of the pandemic, but he said he and his colleagues are finding navigating the grave situation of the restaurant business emotionally exhausting, and he has watched colleagues lose their businesses during the pandemic.  

“We aren’t greedy SOBs who just want to be open and we don’t care who gets sick. We just want to be able to feed our families and not lose our dream. This is our life savings and the way we make money,” Taylor said. “I just want people to know we’re hurting here. We are. We’re hurting, our employees are certainly hurting. We’re pulling out every stop to stay open.”

 

Hannah Davis is the Area Editor at the Forest Lake Times. You can contact her at hannah.davis@ecm-inc.com or (763)233-0709

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