Special Sauce: Tom Colicchio on How to Save Restaurants

[Photograph: Courtesy of Crafted Hospitality]

As we all try to deal with the crisis confronting us, I thought we'd follow up on the Special Sauce episodes that focused on Kenji's stories with other voices from the food and beverage industry. In the coming weeks you're going to hear the stories of farmers, bakers, cheesemakers, bartenders, servers, chefs, and anyone else in our food supply chain that should be heard from in these troubled times.

This week, food activist, chef-restaurateur, and Top Chef co-host Tom Colicchio gives us the lowdown on the goals of the newly formed The Independent Restaurant Coalition, an organization formed on the spot to lobby Congress to do right by the more than 500,000 independent restaurants that employ nearly 11 million people—a big part of the nearly $1 trillion dollar hospitality business. Tom knows his way around food policy—he has been working on the issue of food insecurity in this country for years, as when he worked on the terrific documentary A Place at the Table, which was produced and directed by Kristi Jacobson and Lori Silverbush, a talented filmmaker who happens to also be Tom's wife—and so he is really wise in the ways of DC policy making. Tom is talking about really important stuff here, so please do give this and the future episodes of Special Sauce a serious listen.

I asked Tom what we can do as individuals to help, and his response was simple: "Call your representatives in DC and urge them to support the I.R.C. initiative."

We feel so strongly about the specific recommendations of the IRC, we urge you to read them yourself. You can find them here.

In short, the IRC is advocating making the following changes to the original PPP legislation:

  • Pegging the origination date of a PPP loan to the first day that restaurants, in any given entity, can legally open fully.
  • Extending the maximum forgivable loan amounts to three months after restaurants are allowed to reopen and operate at full capacity.
  • Pushing back the end of the program to after June 30th.

Without these changes, Colicchio said on a conference call with journalists yesterday, "The situation is dire, and we are looking at something that will completely gut the industry."

Production note: With everyone hunkered down in place we are no longer able to record Special Sauce in a fully equipped studio with an experienced and skilled engineer. So if the sound quality of this episode isn't up to snuff, know that we are working on all aspects of the production within the context of the new reality we're all living in. Better things and better sound lie ahead. Put in food terms that most serious eaters will understand, consider this episode the first pancake.

Special Sauce is available on iTunes, Google Play Music, Soundcloud, Player FM, and Stitcher. You can also find the archive of all our episodes here on Serious Eats and on this RSS feed.

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Transcript

Ed Levine: I'm Ed Levine, and welcome to another special edition of Special Sauce, one of a number of episodes that we're calling The Food Chain. On every episode of The Food Chain, we'll be hearing the stories of folks who make up our actual food chain and how their lives have been affected by the coronavirus pandemic. Today, we're very pleased to welcome food activist, chef restaurateur, and Top Chef co-host Tom Colicchio. Tom, along with many of his esteemed colleagues, have formed the Independent Restaurant Coalition to advocate for the millions of Americans who work in and around the restaurant business. He's here to tell us what the IRC is up to as we speak.

Tom Colicchio: Hey hey.

EL: Can you hear me?

TC: Yep, got you.

EL: How are you?

TC: Okay.

EL: How was your Seder?

TC: It was a Zoom Seder, which was interesting. But it was okay.

EL: I know you've been talking a lot about what's needed, but I thought I would just get everyone up to date. I'm trying to keep everyone who's logged on Serious Eats up to date on what's going on with all these various packages and what's the lobbying being done. First, why don't you just identify yourself, so we can start there.

TC: So, hi, this is Tom Colicchio, chef and owner of Crafted Hospitality, Witchcraft, and co-founder of our newly-formed Independent Restaurant Coalition.

EL: Perfect. So first, I'd just sort of like to take us through kind of what happened to your businesses when.

TC: Looking back, right around mid-January, I'm a bit of a news junkie, and I noticed that this virus that was kind of ripping through China and Asia, and started thinking, it's only a matter of time before it arrives here. And I think at some point, I gathered my staff around and said, "Listen, if this continues, we're going to be in trouble." And they kind of rolled their eyes and thought I was being an alarmist. And then two more weeks go by. I was like, "Guys, this is not looking good." And at the time, I was actually focused mostly on schools. Knowing that if schools close, how many people are going to be hungry, and meeting up with people that I know in the anti-hunger organizations, reaching out and saying, “Okay, what's the plan there?” And then, yeah, around March 7th, we lost...so River Park is attached to a conference center and we lost about $370,000 of business in two days.

EL: Wow.

TC: People canceling, and a huge downtick in reservations, phones off in terms of people looking for events in April, May, June, just stopped. And so, it was clear that we were in trouble. I mean, I had notified my teams to stop purchasing wine and liquor and just keep what you have, notified the chefs to start ordering, keeping really, really close, office managers no longer buying office supplies. You know, as it progressed, I think right around Sunday to Monday, we had two events back to back. We did Cochon 555, and I remember almost canceling that and thinking, “I don't know if we want to be around this many people.”

EL: Right.

TC: And we did it. I left as soon as it started to get busy. So there was a VIP hour where it wasn't that busy, and I left right after that. And then the following day, we had a fundraiser for Food and Finance High. And the same thing there. It just was like, people were talking about it already. And so, after that, I made a decision that we were going to close.

EL: And so, that was around the 10th or the 11th, or a little later?

TC: Yeah, probably, probably. So once we made that decision, then I started thinking, “Well, maybe do we stay open for takeout?” And then I remember watching the news and going, “I don't want to go out anymore.” And I’m afraid, I don't want to bring this home to my family. And I remember telling my mother to stay in, don't go out anymore. And then I thought, “Well, if I'm staying in, I'm not going to go to work, I certainly can't ask my staff to do this.” So we made the decision to close. We picked a date, and we were going to have everybody come to the restaurant. But then I said, “Why am I asking 300-plus people to come to the restaurant right now? We have to do this by email.” As much as I hated doing it by email. And then that was Sunday, and that was our last hour last night.

EL: Wow.

TC: We shut everything down.

EL: And so, the drop was precipitous?

TC: Some of the stats that we got from OpenTable, they had noticed this just dramatic drop in reservations.

EL: Wow.

TC: Yeah. And again, at that point, listening to doctors saying that we got to stay inside, social distancing was starting to happen, and it was just, there was no way that we could stay open. It just didn't make sense.

EL: And then a few days later, that's when they officially ordered everyone to close, right?

TC: Right. I started poking around. I gave Danny a call to see what he was up to, and at the time, he was like, yeah, we're... I'd called him up, I think the morning of, I think it was a Friday, and said, "Hey, we're closing. What are you guys doing?" And he said, "Yeah, we're getting there."

EL: Yeah. So did you immediately sort of go into, did you put on your sort of activist organizing hat, of which you have a lot of experience wearing, or...?

TC: Well, yes, absolutely. And so, immediately I thought, “Okay, there is no way that there's going to be a charitable response to this.” And this is what I was concerned about, because this is, again, the thesis of Lori's film, who’s looking at something like hunger, which, when you consider what's going on now, is on such a small scale. The experts believe that $30 billion could end hunger in this country, by making SNAP more robust and school lunch free. And so, WIC better funded, and senior feeding programs better funded. And so thinking there's no way that a charitable response can't take care of hunger, “How's it going to take care of this?” And it's also that work and the work that I did with Food Policy Action was kind of a dress rehearsal for this. Number one, knowing a little bit on how this all works and having a lot of members of Congress that I've met over the years. But then out of the blue, I get a phone call from a friend of mine who was an agent at CIA. And he was like, "Tom, we have a foundation. We want to help the restaurant industry." And my response to him was, "Your foundation is not going to be able to help the industry unless you want to set something very specific for maybe members of the industry that have medical bills. Something very, very specific." And then right after that, I get a phone call from a friend of mine who is a lobbyist in DC who works for the Environmental Working Group, but he has also worked with us at Food Policy Action among lobbying efforts. And he called me about something completely separate. And after I got off the phone with him, it was about 10 minutes later, and I said, "I think the Independent Restaurant Group, we need a lobby."

EL: A lobbyist. Right.

TC: Yeah. He got back to me and said, "Well, let's do it. Let's get someone." And then I called my friend back and said, "All right, I think I know what you can do with your foundation now." And then we actually managed to get some money from other players as well. I lobbed a DM into Joe Scarborough and said, "Hey Joe, lobbyists are going to go to town for these big companies. The small businesses are getting left out in the dark." And he called me up and said he would come on. The next morning I was on. His first question was, "Hey Tom, small businesses, small restaurants like yours, you don't have a lobbyist. How do you think you're going to tap into the stimulus if it comes out?" And so, we already had a lot of fire.

EL: Right.

TC: Yeah. And so, we got a lot of help from Sam Kass, because Sam clearly knows how this game is played. And we hired a firm called Thorn Run. And Stephanie Cutter, who was Obama's spokesperson and the spokesperson for Let's Move is our Comms Director, did an amazing job. And Phil Balston is doing PR stuff for us. And so, this all happened in two days.

EL: Wow.

TC: And then what was really interesting is, my hat goes there, right? And so, but we started calling around, and we found that there was a group of a hundred chefs down south that were focused on this. And we found another whole group in Chicago and another group in Seattle, in Portland, and all these people. And so, we quickly pulled together leaders from all these different coalitions to create the IRC. Again, within two days, we had a team up and running, and we were having conversations, you know, at the highest levels. And then all of us mined whatever relationships we had with members of Congress. And a lot of it was really educating the members on how our business works, trying to explain why we were a great conduit to run the stimulus through because we employ over 11 million people. And then if you look at everyone else that we support, when it comes to our suppliers, and the fishermen, and farmers, and feed makers, and wine makers, that you're talking for 20 million people. The total economy worth over a trillion dollars. It's 4% of the GDP. This is worth saving. And then it just came down to like working very closely with the group and working with our team to sort of hone down to what our asks are and what our needs are. So that's kind of where we're at right now.

EL: Yeah. And so, when you formed the group, I assume it was right before the big stimulus package was passed, and I assume that you tried to make some inroads with those people. And yet, what ended up happening left all those people you're talking about sort of unattended to.

TC: Well, yes and no. We're still working. And listen, all the information that we're getting is that they realize that it's deficient in certain areas, and they're trying to fix it. So, our understanding is there'll be a 4.0 and a 5.0.

EL: Got it.

TC: Many fixes along the way. And so, we're just in there continuing to let people know what we need and continuing to work at this. And so, this isn't a game that you go in there and you hit a home run. It's a bunch of deals.

EL: Got it.

TC: And that's kind of what we're looking at right now.

EL: I guess you've learned that lesson over the years in your various causes.

TC: Yep. Yep. It's like, stick to what we're asking, stay focused, with the combination of working the media and working members of Congress, and just not letting up. The one thing that we did get in there, two things that we lobbied before that we got, one was the sort of franchise rule that's in there. So the idea that they would say, well, originally it was if you had more than 500 employees, you couldn't tap into PPP. And we said, “Well, wait a minute. You have restaurant groups that have 2,000 employees, but over 20 restaurants. And so, let's look at the individual restaurant, not the whole enterprise.” And they did that. And then we got the date pushed back to February 15th, because you said March 1st. We already saw the slowdown way before March 1st. So they agreed to that. So, they're hearing us. And we keep working. We're not going away, which is something else I learned from the time I spent on the Hill, is that if you go and disappear, they don't take you seriously.

EL: Right. Take us through the specific fixes that you urged Congress to address.

TC: Yeah. Well, right now, what we're looking at, the problem that we have in the restaurants is restaurants are closed. And this is the other problem, is that this is a small business stimulus. So of course, for all small businesses, but let's just say in the case of a small business that is operating, maybe it's a fly fishing shop, it has a good mail order business, or maybe their stores shut down. And so, maybe they say, “Okay, we're still doing business. We're still open.” So you tap in, you apply for this, and you get your loan. The second you're approved and you bring that money down and you get that money, that's when the clock starts ticking. You have two months from that point on, right, that you're going to get your payroll covered for those two months. So that kind of works nicely.But what about if you're not open? What about if you can't open? So the day I get approved, I have to put the money down. I hire my staff back, but I'm not going to open. So I have two months of payroll and rent and utilities. I'm not open when the two months are over, I have to lay everybody off again because I'm out of money again. So what we're doing is we're pushing for restaurants to change it to when you can actually open up. And we want more. So we're looking for four months, five months. Because if I can push this out to when I open, let's say, “Maybe I open in September.” Well, then I have four weeks of pay that's already in the bank, and I have four months of rent that's already in the bank. Then maybe I have a shot. The only thing I have to do now is to pay my suppliers. So we're asking for a separate pool, a stabilization pool of money that we can borrow at very low interest rates at a longer amortization schedule. So then we can actually pay our accounts payable, then reopen.

EL: Right. And that's what you're calling the Restaurant Stabilization Fund?

TC: Yes.

EL: One of the things I think you have tried to get people to pay attention to is that independent restaurants range from your restaurants, which are owned and operated by a "celebrity chef". And then there are the thousands of mom and pop ethnic restaurants around the country. You're trying to give them a voice too, right? Because otherwise, they're going to be totally shut out.

TC: Right. The work that we're doing is for any restaurant. So, absolutely. You know, I'm talking to friends of mine who are in the business who, if I mentioned, you'd be like, “They should know this,” and they don't. And so, I'm calling people up and saying, "Hey, you should apply for this." And they say, "Well I hear this. I hear this." Just apply for it. Get the wheels turning, because you can fix the system. If for some reason you don't want the money, you give it back.

EL: Right.

TC: It becomes a loan. You can't hire 75 percent of your staff back, it becomes a loan. And so, if you don't want the money, just pay it back.

EL: Right, exactly. It's like paying a mortgage off early. There's no penalty.

TC: Yeah. But now, here's the thing. You bring up something interesting. I actually think, and this is a contrarian view. I think that the true mom and pop, anybody that came here, saved up the money. They opened up a restaurant, it's an Indian restaurant. The mother and father both work in the restaurant. Maybe the kids help out weekends. I think they'll have an easier time getting through this than a restaurant group that has overhead, because number one, a restaurant group, let's just say a restaurant group that has 20 restaurants, if tomorrow, this is all over, they can't open up 20 restaurants in one day.

EL: No, look at Tom Douglas right?

TC: Months, months.

EL: I mean, 850 employees lost their jobs at Tom's 13 restaurants. And that's where he says there's no way he can reopen unless a lot of things change.

TC: No. And when he does his, he's not going to open up all 13. He may just let go. And so, I think it's getting hard because those restaurants just can't open up that quickly. I still put it, and this is the finger in the air, 50% aren't going to open up. Unless the federal government looks at PPP, takes a real hard look at it, they actually fix it. Okay. If we get some sort of stabilization where we can pay even a portion, maybe you could borrow 50% of your accounts payable, and we have cooperation by landlords, because that's the other thing. The real estate market is going to change. Drive up 5th Avenue, drive down whatever. Look at all those stores. Most of them, small businesses that occupy the ground floor of all of those buildings. Do they really want them all boarded up?

EL: Right.

TC: I mean, then what happens is those streets are dark, right? And it's just the city isn't as vibrant anymore. And so, somewhere along the line, something's got to give here, because there's no way, given the current situation, that restaurants are going to open up. We're not going to be at full capacity at all until there's a vaccine. We're not going to be at full capacity. And so, if we don't operate at full capacity, we're losing money. And how long can you lose money and pay a landlord the rents that I'm paying now and continue to do business? That doesn't make sense. And here's the rub.

EL: The system was broken, right, even before this, in terms of..

TC: Well, landlords that can write that off because it's a loss of revenue. So it's a loss that they write off. And they'll keep it vacant. And that can't last. And I think that the landlord is going to have to look at us as being partners in this. And it used to be, again, a game they played with... Okay, I have this restaurant. Someone comes in, they dump $3 or $4 million into the space. They have a year run. They go out of business. Well, I have all the stuff. I have all the HVAC. All the fixtures are mine now, okay? I let the person off the lease. These are mine. They know it's a matter of time before somebody comes in to key money, they look to expand. So the chef, who has maybe one or two restaurants, he goes out and borrows some money because money's cheap right now. Pays the key money. He goes in there. The landlord still gets the same rent. Well, guess what? That's not going to happen anymore. There's no one going in there to pay that rent at that price.

EL: No. And you already see it in New York, at least on the Upper West Side. There are so many vacant storefronts even before this all went down.

TC: Everywhere. You go to Bleecker Street, half the stores are empty. And so, what kind of city do we want? A city where a quarter of those buildings are operating and then three quarters are vacant? I mean, it's not going to work.

EL: So in a way, what's weird is that this is sort of by accident shining a light on a really important issue that you're raising.

TC: And I think COVID is shining a light on a lot of inequities everywhere. Again, I'll go back to hunger. The need right now. I used to be able to talk to these groups. You'd go into New Jersey, you're in an affluent area, and you're giving a talk, and they're doing volunteer day where they're filling up bags and they're donating money. And I'd get to talk to them and say, "This is really nice, what we're doing." And I would say, "But you're really not making that much of a dent. This feels good to you because you're doing something. And I'm not saying that we shouldn't help people. But what I want you to do is really, after you're done here, if you really care about ending hunger, you need to use your voice. You need to call your member of Congress and say, this is a priority. Okay? And I'll give you an example of why." I said, "We're all one disaster, and one climate." I used to say, “climate disaster away from needing help." And there was a lot of affluent areas on the New Jersey coast after Sandy that people had received food stamps for months. So we're all going to be in this position at some point. You may think that you're doing well right now and that's never going to happen. But let me tell you, it can happen. So what you should do is we should be looking at systemic change, not just putting a band-aid on the problem. And the only way to do that is through government intervention. And so, what COVID is doing now is really shining a spotlight on the inequities that we have, looking at how fragile people are. Now, this idea that people didn't have $400 saved up for when something bad happened. Oh, we can’t always have that philosophy.

EL: Right? It was an abstract construct before when you'd read about those polls that said people live paycheck to paycheck. People didn't take that seriously, right?

TC: Well, or they said, “Well, that's their fault. What are they doing? Oh, it's the drugs, or maybe they shouldn't have children.” Well, now a lot of people are in that from no fault of their own. That's what we would always say to people. No, it's really no fault of your own. If you're born into poverty, it's hard to get out of that. So now, no fault of your own, you're going to need help.

EL: It's true.

TC: Don't forget that. Because right now, what we need is, when we get through this, is empathy so we actually can change something. I mean, right now, I thought that Bernie Sanders, the idea of Medicare for all, I thought, “This is fine. It's a great idea. You're never going to get 60 votes in Congress. So, you're selling a pipe dream.” And now, well.

EL: Yeah. It seems inherently logical.

TC: What you're seeing is what people always pointed out. When your healthcare is connected to your job and you lose your job, you lose your healthcare. Now a lot of people lost their job and their healthcare.

EL: Right. And none of these packages, and Trump even refused to open the national Obamacare exchanges up.

TC: Yep. Yep. Yep. So, this is also something I've been telling lawmakers. If you have to, in PPP, if we can use that money to fully fund our healthcare plans... because right now, let's say I pay 50%, my employees pay 50%. Well, they can't. So if I can use PPP to fully fund my insurance, I have a chance of those people coming back now, because they're okay on unemployment, but they're going to think twice, “Like, hey, wait, I can go back and get my insurance, paid for, get maybe a little less money, but my insurance is paid for? I'll go back there.” So, that's the other thing we were pushing for, is what can you use this money for? You can use it for benefits to fund benefits, but I don't know if it's at the same level that I was funding benefits or I can actually do it at a higher level. I can't see through the other side of this, but I do know on the other side of this that there's got to be something better than what we've been doing. Honestly, running our businesses, I think when you have companies, publicly traded companies that every quarter, they don't hit their numbers, they get punished. And so, what do they do? They do what every business does. They squeeze to make sure that works. They squeeze labor. And you know maybe that's going to change. Who knows? Who knows?

EL: Yeah. That would be the greatest thing that could come out of this, right?

TC: Yes. Right. But what we're going to need is a huge WPA coming out of this.

EL: Right, right.

TC: And listen, this is so crazy. When we go, well, unemployment, that the amount of money that the federal government is pumping into unemployment is astronomical. If they just took that and said, “Okay, once we get through this and we can start working, let's put people back to work like they did WPA.” And if that means working on modernizing our electrical grid, you're doing construction projects for roads and things like that, or you know what? If you're a musician, maybe you get paid to go play music in the park, because we need that. And if you're an artist, you're painting murals like they did back then and we got beautiful artwork. And maybe if you are a gardener, someone's paying you to plant a lot of stuff and garden places in your city and your community so they look great. Because we're going to need all of that.

EL: So, the question is whether someone will look at it from a macro perspective, or is it just going to be a sort of drip, drip to get to where you're talking about?

TC: I don't know. Well, I mean, $2 trillion in the first plan is not so much of a drip.

EL: Right. It’s kind of a waterfall.

TC: We can sit here forever and debate who gets what and how it's going to get divvied up, but it's still $2 trillion that went out the door. And that was number three. There were two other packages that went out earlier than that. And it looks like there's another 500 billion coming behind this. And they know there's more that has to come out. So, we are far away from seeing the end of this thing right now.

EL: Yeah, for sure. So, what would you like to say to the Serious Eaters of the country or the world, for that matter, about what's at stake sort of in a macro sense when all is said and done with what you're talking about, and what can they do to support the IRC's initiatives?

TC: Well, I mean, the one thing to support IRC, for those that want to support, is call your member of Congress and tell them that you want restaurants open. And I keep hearing people, they'll ask, “When can you open? When do you think you can open?” That's not the question. The question is, “When will the public feel comfortable going out in crowded places?” And that's not going to be until we get antibody tests that we know who had it. If we actually believe that if we're a year and a half away from getting a vaccine, then we need to know who has it, see if they're immune. That's when you get a card that says you had it so you can go to work, you can go places. And then with testing, especially testing where you can get instant tests, where you can instantly test someone maybe at the door of your restaurant, see if they have it or not, then you can make people feel more comfortable about going out. “What's at stake here?” What's at stake is restaurants are anchors in the community. This is part of culture. And what we don't want to do, and this is why I think restaurants and other cultural institutions need to be safe, is because what we don't want to do is come out on the other side of this where, yeah, we saved the economy, but we lost our culture. We lost who we are. And so, when you think about restaurants and you think about how they're used, whether it's to celebrate a birthday, or a wedding anniversary, or a graduation, or a first date. And then when you think about the amount of work that restaurants do and chefs do when it comes to actually dealing with other issues in our communities. And we're always there. And so, we want to make sure that our culture is intact when we're done with this, because if it's not, then who are we? What do we have left? And so, if you really do believe that we should have restaurants and we should have all kinds of restaurants, if you want to make sure that 11 million people, that's the number of people that work in independent restaurants, again, not including fishermen and farmers and all other businesses that we support. If you think that's all important, please pick up the phone.

EL: Thank you, Tom Colicchio, for taking the time to talk to us, and stay safe and healthy out there, Tom.

TC: Thanks, Ed. Thanks a lot. I appreciate it.

EL: Talk to you soon.

TC: Stay safe too. Okay, bye.

EL: Bye.

EL: That was Tom Colicchio giving us a real picture of the state of independent restaurants now, and even more importantly, what he, the IRC, and all of us can do about it. You've been listening to The Food Chain, one of a series of special coronavirus-oriented episodes of Special Sauce that will be airing in the coming weeks. I'm Ed Levine. We'll be back soon with another Food Chain episode of Special Sauce.