Colorado’s restaurant industry lost more than $3 billion in 2020

BY FREDA MIKLIN – STAFF WRITER

A panel discussion sponsored by the South Metro Denver Chamber of Commerce led by longtime restaurant industry leader Larry Herz on May 14 featured Mollie Steinemann, manager of local government affairs for the Colorado Restaurant Association. She represents the industry with the Colorado Department of Public Health and Environment and liquor licensing authorities. 

Mollie Steinemann is manager of local government affairs for the Colorado Restaurant Association, which has approximately 3,500 restaurant members, a board of directors with 60+ people, a paid staff of 19, and eight chapters around the state.

Steinemann reported that on March 16, 2020, all Colorado restaurants were ordered to shut down for indoor dining due to the COVID-19 pandemic. That resulted in the loss of over $3 billion in 2020 alone. At the height of indoor dining closures, the industry shed 94,000 jobs.

Steinemann explained, “Profit margins are about three to five percent for most restaurants, so with the closure of indoor dining, it was impossible to pivot without huge losses.” She continued, “When counties moved to level red in November and December, many employees lost their jobs for a second time. It’s going to require substantial support and time for this industry to get back on its feet. Economists are projecting it will take five to seven years. Many will never recover.” 

As the pandemic continued, restaurants looked for ways to remain solvent. Adaptations included alcohol for takeout and delivery, being allowed to sell food and provisions like toilet paper and toothpaste, expanded outdoor patios, and winter outdoor dining. “Expanded outdoor patios was huge for restaurants, especially with support and encouragement from state and local government. Winter outdoor dining was hit and miss,” said Steinemann. 

She also shared that the experience of the last year has provided both “silver linings and lessons.” Those include:

  • Takeout and delivery are here to stay.
  • Staffing in restaurants has streamlined.
  • There continue to be competitive opportunities in restaurants. Keeping them safe is gratifying for patrons and employees.
Larry Herz is a longtime leader in the local restaurant industry. He started many restaurants in the Denver area, including Carmine’s on Penn, Indigo, Uncle Sam’s, A-Bar Union Station, Go Fish Gill, and 730 South.

Restaurants, Steinmann said, “remain the pillars of their communities. People want to gather for happy hours, weddings, parties, socializing. They are community hubs.” 

Another impact of the pandemic is that it has caused operators to take a hard look at how they compensate their employees. On the legislative side of the equation, Steinemann pointed to two pending bills and several other areas she views as imperative to allow the industry to recover.

HB21-1027, currently pending in the general assembly, would extend the date to which on-premises sellers of alcohol beverages may offer those beverages for take-out and delivery five years past its current expiration of July 1, 2021. It also “creates a communal outdoor dining area program (that) allows multiple licensees (such as taverns, hotels, restaurants, and brew pubs) to attach to the area and serve alcohol beverages to the diners in area, (as long as) the licensee’s premises are within 1,000 feet of the area.”

SB21-035, also pending, would protect restaurants by “prohibiting a third-party food delivery service (GrubHub, DoorDash, UberEats) from taking and arranging for delivery or pickup of an order from a retail food establishment without the establishment’s consent.” 

The other issue that Steinemann said is crucial for the survival of restaurants is that the state backfill the state unemployment trust fund with federal stimulus dollars. She said, “This must happen…The fund is completely insolvent. Without the state moving to backfill the fund, rates will increase. We are already hearing some restaurants report that their rates have increased by $4,000 a month.”

The industry would also like to see Colorado create a state version of the Restaurant Revitalization Fund that was part of the American Rescue Plan Act signed into law in March because the federal program did not have enough money to solve the problem in this state. 

Steinemann described several possible programs that the state could create and fund to support the restaurant industry:

  • Employee hiring and retention bonuses
  • A media public awareness campaign about the benefits of a career in the restaurant industry
  • Gift cards to restaurants as incentives for people to get vaccinated
  • Buy-one-get-one-free or free beverages or desserts to anyone who can prove they’ve been vaccinated.

Steinemann wanted to make sure people remember that, “Colorado will remain a leader in culinary innovation.”

The last subject raised was the impact of the millions of dollars of CARES Act money on the restaurant industry. Arapahoe County Commissioner Carrie Warren-Gully asked Steinemann if that money served the purpose for which it was intended. Steinemann said that oftentimes, the criteria were too restrictive for some businesses to take advantage of, but noted that, “that is the nature of government programs.”

Herz added the observation that, “Not everyone did the right thing with that (CARES Act) money. It will be interesting to see if those programs ever get audited by anyone.”

fmiklin.villager@gmail.com

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