Small Arizona Restaurants Push For More Financial Help In Wake Of Coronavirus
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LAUREN GILGER: Restaurants in Arizona have been allowed to be open for dine-in service for some time now, but that doesn't necessarily mean it's business as usual. In order to take precautions to prevent the spread of COVID-19, most are operating at low capacity and with many new restrictions in place. All of that, on top of being closed for weeks on end, has many restaurant owners wondering how [they'll make] it through. The Arizona Small Restaurant Coalition, an organization of small restaurants formed because of the coronavirus pandemic, is calling now for change. They want to see tax relief for restaurants who couldn't pay their state transaction privilege tax — or TPT bills — and disaster insurance payouts that would allow them to collect now. I spoke with one member of the Arizona Small Restaurant Coalition more about it. Kell Duncan is the co-owner of the Churchill in downtown Phoenix.
KELL DUNCAN: So we like everyone were affected by the coronavirus. We kind of saw things happening across the country that gave us a little bit of concern and really started to think that this was a lot bigger than we had anticipated. And so we started to realize that they were starting to close down. And so we just started to prepare for it. And so we actually closed slightly early, before the mandate, because we just felt like that was the right thing to do for our employees and for the people visiting the Churchill.
GILGER: Were you able to, when you decided to shut down, get some help? The federal government offered up some. I know there's been some offer to the city, the state level. How did that play out for you?
DUNCAN: Yeah, we I think were an outlier for, in that regard, from the discussions I've had with a lot of my colleagues. We, we went through the process to get an SBA loan in order to fund this project. And so I think because of that and because of the relationship we've had to form with our bank going through that process together, we applied for the PPP very quickly. Basically, we dropped everything, and those resources and relief became our number one priority. We were early and we got our funds pretty quickly and we were accepted first. But I know that a lot of people don't have that same story.
GILGER: So what were these conversations like when all the sudden, you know, you and your business partner are focusing on getting a loan to get you through this period? And the Churchill's also a little unique in this, right? Because it's not just one business you support, is it 10 —
DUNCAN: It's 10.
GILGER: — small businesses within?
DUNCAN: Yeah. So it's 10, and the more challenging thing: We actually didn't lay anyone off. We paid everyone for the first four weeks out of our, out of our own pocket. That was as long as we could afford without risking long term for the business. So we've been able to pay everyone through this entire thing up to this point, which is exhausting, you know, and challenging. And the decisions that you have to make daily and weekly where you're trying to balance the, the success and sustainability of your business long term with the health and safety of your employees is is one that weighs on you.
GILGER: So where are you now? I mean, have you been able to reopen as the governor has lifted his orders?
DUNCAN: Yes, we you know, we've made a lot of changes and we finally got to open on May 22nd. So we, a week after when it was allowed and we spent that time really focusing on how we could make the space as safe as possible.
GILGER: So what are some of the things you've had to put into place? I'm sure it doesn't look or feel quite the same at this point.
DUNCAN: Yeah, it's, you know, the Churchill's a large gathering place where we like to have big groups. It's where you can have groups of friends meet. And so that's obviously the thing everyone's not encouraging right now. So we removed a bunch of the seating that we had in terms of lounge furniture and really spread out and measured out six feet between everything. So we have about 140 seats now, which is about 25% of our typical occupancy. We closed down to the one main point of entrance. Employees are required to wear masks, which we've had to work through as well, because it's hot and they're overheating and they're breathing through those masks, so we've had to implement a break system to make sure everyone's, you know, taking care of themselves. We have removed all of the games. We have eight sanitation stations, foot pedals on the doors, censored sinks and hand dryers. Anything that we could think of that we thought would help make this place feel, feel safe.
GILGER: So the, I know restaurants are doing this, I know they're trying to operate right now. I just wonder if so much of this has to do with consumer confidence, right? Like, are people willing to come?
DUNCAN: Yeah, it's, it's been interesting. We have seen that people are willing to come back. Obviously, it's just really hard, even if you're you're full 100% of 25% percent is still only 25%. And so we're, we're really trying to figure out how we can, we can do more with less. We need, you know, we need to try and maximize revenue with less time and less people. And it's really challenging.
GILGER: Right. So how do you operate at 25% capacity? How do you continue to pay your bills to make enough money to keep the business going?
DUNCAN: You know, I'll let you know in about a month or two. No, we, we're working through that now. We were only open for about 10 days before the curfew was put into place. And so now everything we're talking about seems a lot less important and, you know, we've kind of had to adjust again for for that, so coming out of coronavirus where cases are still, still happening and increasing here and trying to navigate that has been even more challenging.
GILGER: So I know you're a member of the Arizona Small Restaurant Coalition and they're calling for some specific policy measures that I want to talk through with you. One just has to do with tax relief. How would this help you kind of make it through this period, which could continue for some time it sounds like.
DUNCAN: Sure. I think the biggest thing that, for us and for most people in hospitality right now, is that they usually come off of this time as their strongest time. This is our season. We are now coming off of a season that was cut short, you know, and now we didn't — we only had half of March, none of April and almost none of May. So on the TPT, we're not necessarily asking for it to be forgiven, we're just asking for a longer period of time. Coming out through summer, like I said, we're, we've had — we have to run very lean, and we don't have the reserves that we once had. And so to have back TPT taxes due now as I'm trying to make it through summer makes it very difficult.
GILGER: The other policy measure here from the restaurant coalition has to do with insurance payouts. I'm sure you sort of tried to file for an insurance, calling this a disaster, essentially. How did that work for you?
DUNCAN: Yeah. Challenging. We obviously applied, and got an instant denial from, from our insurance company. And so we, we've been pretty disappointed with that process. And I'm, I'm not really sure why else we have insurance other than something like this happening.
GILGER: That is Kell Duncan, co-owner of the Churchill in downtown Phoenix. Kell, thank you so much for coming on The Show to tell us about this.
DUNCAN: Thank you for having me. I really appreciate it.
