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Monday November 30, 2020
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The Chop House restaurant in Ann Arbor

Hard Times

Three harrowing months for Ann Arbor restaurants

by Josie Schneider

From the July, 2020 issue

CORRECTION: This article has been corrected since it was published in the July Ann Arbor Observer, which mistakenly said that TeaHaus had closed its Tea Room. Seating is closed, but the Tea Room will reopen as soon as it can do so at full capacity. Meanwhile, drinks, sweets, and their amazing selection of bulk teas are all available for takeout.

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On March 16, with Covid-19 spreading exponentially, Michigan governor Gretchen Whitmer issued an executive order closing all "places of public accommodation." Restaurants and bars closed their seating areas and immediately began hemorrhaging money.

Owners and managers stayed up nights worrying their businesses couldn't weather the storm. "The stress was palpable," wrote Phillis Engelbert, co-owner of the Lunch Room and Detroit Street Filling Station, in an online post. "I felt like I could lose my business--my baby--the entity into which I had poured every drop of blood, sweat and tears for a decade."

The Observer's online City Guide currently lists 374 restaurants and bars in Ann Arbor (including the Ann Arbor zip codes and school district). In May, I emailed them all to ask how they were coping.

Thirty-eight responded, some with one-word answers, others with pages-long diaries. Only twelve answered the question, "Is your closure permanent, temporary, or uncertain?" Half said "temporary" and half said "uncertain." I also talked by phone with seven restaurant owners and managers that oversee a total of twenty-four Ann Arbor establishments.

Engelbert responded to our survey with a link to her online crisis journal, the Detroit Street Dispatch (thelunchrooma2.com/dispatch).

"My first inkling that something was really wrong came on Friday night March 6," she wrote. "Before that, I had heard there was a worrisome virus sweeping Asia. Our health inspector mentioned it in early February during a routine inspection at our bakery & cafe. He said it had begun in the open-air markets where live animals are held and slaughtered for sale. I remember joking that being a vegan

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restaurant, it would never affect us."

She realized otherwise at a dance party at LIVE. She met one friend who'd just been laid off from a U-M catering department, and another who reported that university functions at downtown restaurants were being canceled.

Her sales started to drop the next day-- and kept dropping. "The true benchmarks came when universities started shutting down and sending students home. Harvard and the other Ivy Leagues came first, then OSU and others close to home. U-M closed that Wednesday. My student-workers left town. Ann Arbor public schools closed on Thursday. Sales plummeted. It felt like a slow march toward financial death." When the closure order came, she decided to shutter the Lunch Room and concentrate on takeout at the Filling Station.

Takeout wasn't an option for Micah Bartelme, whose BarStar Group owns Bab's Underground, Nightcap, Lo-Fi, and the Aut Bar. When I talked to him during the shutdown, stress was palpable in his voice. It was, he said, "the weirdest and hardest" time of his life. Overnight, he lost 100 percent of his income.

"We took on new debt and new liabilities to even maintain our obligation to leases and vendors, insurance, etc.," he says. "Even in the best of times in the hospitality industry, things are pretty difficult, and these are clearly the worst of times, which have made things near impossible. Nothing is promised."

Most restaurant and bar employees were furloughed or laid off, adding yet another layer to an already fraught situation for owners. Workers are often like family (or are indeed family), so already besieged owners jumped to their aid.

Kevin Gudejko, president and CEO of Mainstreet Ventures, said sales dropped 90 percent. They shut five of their six Ann Arbor restaurants to concentrate on a "greatest hits" takeout menu at Carson's. But the biggest impact was on their workers. "Can we continue paying benefits?" Gudejko wondered when we spoke to him. "Can we continue paying insurance, and how's that going to work?"

The administrative headaches compounded the stress of trying to keep going with less staff and much less income. "I have had to work more than I have ever worked in my life," wrote one owner on our survey. "It has been overall emotionally and financially devastating. I rarely see my family, have no functional income, and fear for my life and health everyday."

"It's really weird being in an empty spot all day that used to be hustling and bustling," wrote another. "Some days I feel useless and helpless ... like there isn't much I can do to affect change. Up and down. Up and down. Pretty much how I'm sure most people are feeling these days."

Many restaurants raised funds via GoFundMe campaigns. All of Bartelme's bars had them, raising more than $12,000--all of which, he told me, went to laid-off staff. Everyone I spoke to applied for federal Paycheck Protection Program (PPP) loans, which can be forgiven as long as most of the money goes toward paying staff. Disbursement of those funds, as well as state unemployment compensation, was often delayed as the systems overloaded. But the eventual help, including the additional $600-per-week federal unemployment benefit, eased the initial panic.

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Walking through deserted downtown Ann Arbor on April 21, lit signs in some restaurant windows announced the establishments were open. New banners added "Curbside Only" and a phone number, printed extra large. I saw only three other people on the sidewalk and no cars stopping at any restaurants for curbside pickup--but it was only 11 a.m.

Once takeout got up to speed--some inventive owners added grocery pickup, too--sales leveled off. But in my email survey, only one restaurant reported doing even half its usual business. Twenty-three of our thirty-eight respondents said sales were down at least 75 percent.

Another question asked how long they could sustain themselves on their current revenue. Four felt that one month was the limit, while ten said they could carry on for three months. Six could handle six months, and five restaurants could stay open for a year. But even the most financially secure were stressed. "Our landlord was and continues to be unwilling to offer any relief or deferment," one wrote. "They are simply demanding full rent. Fortunately, we have been successful enough that I would say this is sustainable for the foreseeable future. But that is without our full staff, meaning 30 of our 38 employees would be out of work."

One response was simply to put food on the table. Carson's prepared a "family meal" each day for all of Mainstreet Ventures' laid-off employees and their families. The Last Word, one of six establishments managed by Watershed Hospitality Group, offered carryout meals for all displaced hospitality workers. With the help of donations from other Ann Arbor restaurants, including Zingerman's, HOMES Brewery, and Jefferson Market, as well as cash from the public, they're still giving out 100 meals every Monday, Wednesday, and Friday.

The list of area restaurants helping those in need is long. Ayse's Turkish Cafe donates food to the Delonis Center. Palm Palace and the Detroit Street Filling Station donate meals for out-of-school kids. The Blue LLama jazz club and Hut-Kay Fusion offer food to anyone in need.

Curbside pickup quickly became the norm. Drive up to the restaurant and text, and a masked and gloved employee delivers food to your trunk.

"Once we got rolling and got better at it, it was really popular--and there was a lot of community support," says David Ritchie, vice president of operations at Mission Restaurant Group (Blue Tractor, Grizzly Peak, Jolly Pumpkin, Mash, Pretzel Bell). The carryout orders came in fast and furious between 5 and 7 p.m., some days with as many orders as they might have seen in a whole evening before the pandemic, but now with only five workers instead of the previous forty. "There were days we were really overwhelmed," says Ritchie.

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By early June, the Covid curve had flattened. On June 8, restaurants were allowed to reopen their dining rooms--with new precautions that include leaving half their seats empty.

The next day, I donned my mask and headed back to a busier downtown. Clusters of walkers slid by me. Pockets of outdoor diners enjoyed lovely spring weather in front of restaurants up and down Main St., Liberty, Ashley, and Washington.

But not everyone was participating. In our survey we asked, "If dine-in is permitted but under social distance rules, would you reopen?"

"No. Not right away," one responded. "We'll let others be the guinea pigs. It's more important for us to do it right than to do it quickly."

"Hopefully we will resume with enough business to cover rent (which is outrageous), payroll (with less staff), and monthly bills," said another. "If I 'go down the rabbit hole', I realize the business has had many great years. It may be time for us to close our doors. Regardless of the outcome, downtown will never be the same again."

Eleven places had already announced they wouldn't be reopening. And no one expects them to be the only casualties.

The casualties include the Aut Bar. Bartelme says he "had hopes of preserving a community treasure. Unfortunately, it was unsustainable. The economics just didn't work."

Arbor Brewing Company closed its original Washington St. location after twenty-five years. Its offspring, the Corner Brewery in Ypsilanti and the Tap Room in Plymouth, continue, and Michael Collins of Farm + Ferment (which also owns Bigalora) says he's looking for a spot away from downtown.

"We were able to work with the landlord and get out of our remaining two-and-a-half years on the lease," Collins says. He thinks the landlord would be happy with a nonrestaurant tenant.

The other closures are the four Espresso Royale cafes, Prickly Pear, Logan, Chow Asian Street Food, and Classic Cup Cafe.

Moving into these uncharted waters, no one is clear-eyed. The only muscular action is the scrubbing of everything in sight, over and over. All other actions are tentative. Wooing the public back is uncertain, as restaurant workers still fear for their own health.

Most restaurants will continue with the popular curbside pickup--permanently, they say. The new frontier is contactless payment.

Mission Restaurant Group has added QR codes to each table. When scanned with a smartphone, the menu appears.

At Ayse's, the inside will remain closed, but the generous outdoor space next to their window will allow for almost a "full house."

Bigalora called back all of their furloughed staff on June 8.

Philosophy and dreaming poured out in equal measure to our question, "What is your most hopeful vision for the business going forward? Your most pessimistic?"

"My pessimism stems from questioning whether or not we'll be able to, as a state and society, have a safe reopening," says Adam Lowenstein of Watershed Hospitality, which, besides the Last Word, runs the Alley Bar, Good Time Charley's, Cantina Taqueria, and LIVE. "I want to believe we've been through the worst of it."

"We'll be operating at a loss for twelve months, we figure," says Bartelme. Mainstreet Ventures' Gudejko fears 20 percent of Ann Arbor's restaurants may close.

Pam Pietryga, owner of Pizza Bob's, is one of many who say they're working harder than they ever have in their lives. "I remain optimistic about the future," she writes, "but I have no special ability to know what will happen from one day to the next."

Heidi Keller, general manager of Arbor Tree Lounge, fears that we'll lose the distinctive local places that draw talent to our city. "I'm part of Gen X. I need to elevate my voice. I need to do more. I need to do more with culinary schools, sit on boards where I can. I need to stop talking so much and get involved."

Lauren Bloom of Blom Meadworks writes eloquently: "Our most hopeful vision is that our community stabilizes and is safe, and we're able to confidently reopen along with all of the other local businesses that keep our town vibrant. That we can come together over drinks and events and gather without fear. That [we are] open and bustling, which in turn means we can continue to buy from and support Michigan farmers and growers. And perhaps that some of the habits and lessons we've all learned along the way--new hobbies, a commitment to buying local, an even deeper love for our local parks, our joy in simple interactions--stick around and change us for the better."

---

On June 13, knotting my scarf against the chilly evening breeze, I anticipated empty outdoor tables as I turned onto Main St. from William. But as I rounded the corner, sights, sounds, and smells told a different story. The city had closed the street, and restaurants had set up tables there, making for a festive atmosphere. During my entire walk down the middle of closed downtown streets, I saw just one empty outdoor table, at Sweetwaters on Washington.

Diners shivered as the sun receded. Many departed, but some hardy stalwarts stayed to enjoy their first meal out in almost three months. It was a one-day sample, but Gudejko emails that Mainstreet Ventures' outstate restaurants, which opened two or more weeks earlier, remain busy now--an indicator, he hopes, that will repeat in their Ann Arbor establishments.

All sides are tentative however--owners, workers, and diners--with only one thing for sure: no one wants a new wave of infections and another lockdown.     (end of article)

[Originally published in July, 2020.]

 


On June 26, 2020, Natalie wrote:
TeaHaus's tea room is NOT permanently closed. They're currently operating on a curbside model. Having been in the tea room many times, I don't see how it would be practical to safely social-distance seated customers. There would be just a couple tables, which wouldn't make much sense from a business standpoint. Additionally, TeaHaus has been busy preparing and providing free meals for school children throughout the pandemic.

On June 26, 2020, Brooke Bredbeck wrote:
Tea Haus is open and has been throughout the pandemic. Not just selling their products but making school lunches for affected students and supporting Mammoth by selling their hand sanitizer. Please fix this!!!

 
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