How New Federal and State Assistance, Loosened COVID-19 Restrictions Will Affect Local Restaurants

Eat and Drink

Grants, tax relief, and increased restaurant capacity levels are coming at a crucial time. But is it enough to save Colorado’s restaurant industry?

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Grim numbers underscore COVID-19’s devastating toll on Colorado’s hospitality industry. In 2020, Centennial State restaurants collectively lost more than $3 billion in revenue and shed an estimated 94,000 jobs year over year, according to Sonia Riggs, president and CEO of the Colorado Restaurant Association (CRA). “Consider how big this impact is as we are talking about an industry that in a typical year generates $14.5 billion in revenue, $380 million in sales tax revenue, and accounts for 10 percent of Colorado’s workforce,” she said during a March 11 briefing on the state of the industry.

These statistic paint a troubling picture, but relief is finally on its way in the form of loosened coronavirus restrictions and state and federal assistance (and, of course, vaccines). Also on March 11, President Joe Biden signed the American Rescue Plan Act, a $1.9 trillion economic stimulus bill creating relief programs and direct funds for individuals and businesses affected by the pandemic. The act is the first to specifically target the hospitality industry through its $28.6 billion Restaurant Revitalization Fund (RRF), modeled after the RESTAURANTS Act that the Independent Restaurant Coalition (IRC) has been fighting to pass through Congress since the pandemic began.

The RRF will provide grants equal to the amount of a restaurant’s revenue losses over the past year, which operators can use without restriction, a welcome change from the Paycheck Protection Program (PPP), which required restaurants to spend the bulk of the federal funds on payroll or return the money. Any non-publicly traded restaurant group with fewer than 20 locations may soon apply for grants of up to $10 million per group, and $5 billion will be allocated for small restaurants with annual revenue of $500,000 or less. For the first three weeks of application enrollment, only restaurants owned by women, veterans, or economically or socially disadvantaged groups will be eligible to apply. These quantifications are intended to prevent big chains and operators from scooping up the RRF funds first, which happened when the initial round of PPP grants were dispersed in 2020.

Bobby Stuckey, co-owner of Frasca Hospitality Group (Frasca Food and Wine, Tavernetta, Sunday Vinyl, and Pizzeria Locale), says the passage of the highly anticipated RRF was an emotional event for him and other members of the IRC. Stuckey co-founded the trade group, which has been lobbying local, state, and federal governments for COVID-19 relief for independent restaurants, at very onset of the pandemic. “[The fund] is really going to save a lot of jobs, a lot of lives,” he says. “I think there’s going to be some restaurants around the country and here in Colorado that might have just closed recently and might be able to reopen because of this.”

While the IRC is celebrating the legislative victory, Stuckey says the group’s work is far from finished. In the coming weeks and months, the coalition will work with the Small Business Association (SBA) and local restaurant associations across the country to educate qualifying businesses—particularly immigrant-owned spots—about how they can access the grants.

For some local restaurant owners, the availability of federal assistance comes at a crucial time. “This past year has been particularly hard for restaurants, especially those that cannot access capital as easily as the larger chains and publicly traded companies,” says Jeff Miceli, president of 17-year-old Mici Handcrafted Italian, which employs 140 people at five locations in the Denver metro area. “Hopefully this grant program will help ensure that our neighborhood eateries can stay afloat until capacity restrictions are lifted and business gets back to normal.”

The long-awaited federal aid comes on the heels of additional state assistance and loosened coronavirus restrictions. On March 10, Governor Jared Polis announced the Colorado Recovery Plan, a proposed $700 million stimulus package that aims to strengthen small businesses with one-time funds that will be allocated over the next 12 to 18 months. The details of the plan are still being finalized, but two programs supported by the CRA are expected to continue: A sales tax holiday will give bars and restaurants a break from paying state sales tax from November 2020 through February 2021, and additional Energize Colorado grants will be distributed to small businesses of all kinds.

On March 7, the Colorado Department of Public Health and Environment issued an amended public health order that included increased dine-in capacity limits at restaurants and bars and an expanded last call for alcohol in counties on Level Blue and Level Yellow on the state’s COVID-19 dial. Restaurants in Level Yellow counties—which includes Denver and Boulder—may now fill their dining rooms to 50 percent capacity or seat up to 150 people, whichever is less; previous restrictions allowed only 50 percent capacity or 50 people in dining rooms. Establishments in Level Yellow counties may also serve alcohol until 1 a.m., with the exception of restaurants that have earned 5 Star Certification, which may keep taps running until 2 a.m.

The past week’s events may prompt sighs of relief from restaurant owners and worked—and diners—but Riggs notes that the hospitality industry faces a long road ahead. The CRA estimates that recovery will take between three to five years, if conditions continue to improve. “With loosening restrictions and the increased availability of vaccines, we are optimistic that we are beginning to turn a corner, especially in terms of employment. But restaurants will not even begin to recover until we are back at 100 percent indoor capacity,” she says. “I cannot emphasize enough that the restaurant industry needs assistance and support in the coming months and years to come out of this crisis.”

Despite the value of the $28.6 billion RRF, Riggs and the CRA want local, state, and federal lawmakers to consider further recovery programs and initiatives. A vaccination campaign for restaurant employees, the extension of alcohol to go, and additional community revitalization programs like the continuation of expanded outdoor dining are among the items on the CRA’s wish list. The organization also designated March 16, 2021—the one-year anniversary of the indoor dining shutdown—as Dine Out to Help Out Day to encourage Coloradans to patronize their favorite local restaurants.

Stuckey agrees that the restaurant industry will require additional federal funding beyond the $28.6 billion. “It sounds really big, but it’s a tiny check,” he says, noting the IRC’s original proposal for a standalone restaurant relief bill included $120 billion in funding. “I do think we’re going to need more.”

The support and diligence of local diners is also vital to the future success of Colorado eateries, Stuckey says. He encourages patrons to contact local, state, and federal representatives to share how important the restaurant industry is to them—and to continue to follow public health restrictions.

“I really think we’re getting there and loosening the restrictions is great. We all just have to remember as operators to be very diligent, and as guests to be very cognizant that we can’t let our guard down,” he says. “We’re not out of the woods yet.”

Sign up for the IRC’s newsletter here to receive updates about Restaurant Revitalization Fund grants. Go to the CRA’s website for information on state and local initiatives.

Patricia Kaowthumrong, Assistant Food Editor

Patricia joined the 5280 staff in July 2019 and is thrilled to be writing about Colorado’s rich culinary scene. Follow her food reporting adventures on Instagram @whatispattyeating.