Ian Malin did everything he could to make his restaurant, Little Giant in Portland’s West End, as safe and successful as it could be this summer.

He applied for a loan from the Paycheck Protection Program to hire back as many people as he could and pay some bills. He moved into takeout and delivery, and built two attractive parklets for outdoor dining. He set up online ordering, and invested heavily in disposable (but compostable) paper products. And there were lots of new house rules to prevent the spread of the coronavirus.

All that effort paid off. The Danforth Street restaurant gained a reputation as a safe place to dine out, and there have been wait lists in August. Malin says he would open seven days a week and serve brunch, too, if only he could find the staff. But that doesn’t mean Little Giant is out of trouble, because all those changes Malin made cost money. And winter is coming.

“I won’t know if we’re making money until the end of the summer comes along,” Malin said. “I can tell you now that the losses we’ve incurred through 2020 are staggering, so it’s unlikely July and August will offset that.”

That’s why Malin and other Maine restaurateurs are supporting the Restaurants Act of 2020 and the financial relief it would bring as the state’s restaurants and bars head into the traditionally lean months of winter. The bipartisan federal legislation, which continues to gain traction among lawmakers who will reconvene in September, would establish a $120 billion fund to provide grants for small restaurants, bars, caterers and other food-related businesses – even food trucks – that are not publicly traded or part of a big chain. There are several federal relief proposals under consideration, as well as a new state small business relief program, that could benefit restaurants, but people in the industry say it’s important to have a program that addresses the specific needs of their businesses.

In Maine, especially in Greater Portland, small, independent restaurants are a huge part of both the economy and culture, drawing visitors from all over the country who come here to explore the city’s food scene, named the best in the nation in 2018 by Bon Appetit. Many of these restaurants, often owned by the chef, have suffered enormously during the pandemic, and say that efforts to help them so far have not been enough. The state shut down restaurants in mid-March and allowed them to reopen in June, initially only to outdoor dining in Maine’s more populated counties, then two weeks later to indoor dining with requirements for capacity, spacing, mask-wearing and sanitization – measures that cost money to implement and reduced the number of customers that could be served, on top of those unwilling to dine out because of the health risks.

That was enough to cause some restaurants to close permanently, including, in Portland, Drifters Wife, which was one of Bon Appetit’s best new restaurants two years ago and whose chef was a finalist in this year’s James Beard Awards that will, in a nod to these strange times, have no winners. The list grew on Friday when Vinland, nationally known for its all-local food sourcing, announced its closure Friday. That list is sure to keep getting longer; the amount of financial aid bestowed on struggling restaurants will surely play a major role in determining just how long. 

The Restaurants Act grants do not need to be paid back, and they can be used for a wider range of expenses than the PPP funds, providing a “level of flexibility so people can make it through and get on the other side,” says Alexander Day, a restaurateur who is a member of the leadership team for the Independent Restaurant Coalition, a group representing the nation’s 500,000 local, independent restaurants. Day has restaurants in New York, Denver and Los Angeles, but now lives in Portland.

“The PPP has been successful, but only to a degree,” Day said. “It has been the path to the bridge, but not the bridge which many of our businesses need.”

Day notes that in normal times, independent restaurants employ 11 million people and contribute $760 billion annually to the U.S. economy. But the pandemic has taken a devastating toll. The National Restaurant Association estimates that Maine lost 34,000, more than half, of its restaurant jobs. Nationally, one in four of the jobs that have been lost have come from food and beverage businesses, more than any other industry, according to the IRC, and one in three restaurants could close by the end of the year without help. A survey the organization conducted with the James Beard Foundation found that 71 percent of independent restaurant owners are more than $50,000 in debt.

Isaac MacDougal, owner of the Portland bar Cocktail Mary, says he usually stays out of politics, but has been contacting members of Maine’s congressional delegation to support the Restaurants Act and has been writing about it on social media. He’s not even sure he would receive much of a grant given the short amount of time he has been open – he opened late last year, and grants cover the difference between 2019 revenues and projected 2020 revenues – but he says he may need any cash he can get to survive.

MacDougal received a small PPP loan that was “infinitely helpful and definitely saved my business, but it was not enough to keep things healthy for an extended period of time.” The bar, he said, is “relatively healthy” now, “but I may not be able to survive the winter.”

When it opened in November, Cocktail Mary had indoor seating for 40 and employed three bartenders. MacDougal is not yet allowed, because of his licensing, to serve indoors during the pandemic. He and his sister are now the only ones running the bar, and he has six outdoor tables that can seat maximum of 20 people at a time. MacDougal shifted to serving to-go cocktails in May, and even now serves cocktails at his outdoor tables in to-go packaging because it is less labor-intensive.

MacDougal plans to close the bar Nov. 1, when outdoor seating ends, and reopen next spring. He says summer business has allowed him to set a little money aside every week, and those savings will go toward paying his rent and insurance through the winter. If the Restaurants Act passes and he receives a grant, it will go toward paying his vendors, he said, and paying down the “significant amount of debt” he acquired opening the business.

MacDougal is optimistic that a vaccine will be ready sometime next year, but he worries that a second wave of infections before then could trigger another shutdown. So he is trying to prepare by trying different things. He wants to team up with other local businesses to put together dinner party, brunch and holiday kits featuring cocktails and wine pairings – cross marketing and working together “to keep us all afloat, supporting each other.”

That’s the kind of reinvention Malin hopes the Restaurants Act will encourage. He’s considering selling Little Giant’s popular sauces and aiolis to help with the transition to winter.

The way Malin sees it, Maine restaurateurs will be going through three winters, economically speaking, this year – regular winter, the pandemic summer, and the upcoming fall and winter season. The PPP loan helped him pay some basic expenses, which gave him more confidence to invest in the parklets, paper products and other things that are helping him survive now. But he’s worried about that third winter, when he expects to lose 60 percent of his customers.

He’s focusing his political activism on making sure the next round of stimulus payments reward the capital investments and R&D that have gotten him this far, which he considers “a better use of government funding than simply underwriting a failing business.” While he supports the Restaurants Act because “it’s got a lot of really attractive features,” he worries that it may be too broad.

“To me, there’s no one-size-fits-all approach,” he said. “But having something specific to the restaurant industry is very important to me.”

Day agrees that Maine restaurateurs are going to have to rely on continual innovation in the coming months if they are to survive – and that costs money.

“I don’t think we’re going to reach a threshold where a vaccine comes out and everything goes back to normal,” he said. “It’s going to continue to be a struggle for a very long time, for a myriad of reasons – the government slowly allowing greater occupancy, social norms changing, people’s opinions of what they’re comfortable with being very different. So I think it behooves us all to look at our businesses and try to innovate on a daily basis.”

At last count, the Restaurants Act had 182 co-sponsors in the House, including U.S. Rep. Chellie Pingree, D-1st District, and on Aug. 14 Senate Minority Leader Chuck Schumer became the 27th co-sponsor in the Senate, joining Maine’s independent U.S. Sen. Angus King, giving advocates of the bill some hope that Congress understands the urgency of the situation.

But whether the act will move forward as a standalone bill, or parts of it will be incorporated into other legislation, is still a big question. When Congress returns in September, it must resume negotiations over the huge coronavirus relief bill. A new version of the PPP is part of that legislation, says Greg Dugal, director of government affairs for Hospitality Maine, an industry trade group. That’s where U.S. Sen. Susan Collins, a co-author of the original Paycheck Protection Program, is focusing her efforts because it would help the nation’s hardest-hit businesses – those that have seen a 35 percent decline in revenue over the past year.

Like the Restaurants Act, the new PPP would be more flexible, Dugal said, “where if you put on an addition because you needed to have more people outside, like a deck, you can pay for that. If you haven’t paid your suppliers in two months because you had no money, you can use it for that.”

But the reinvented PPP would come with “a great deal of debt liability,” Day said, which would be “a very risky endeavor” for vulnerable independent restaurants that already have thin profit margins and lots of ongoing expenses to cover.

Another loan program called the Restart Act was introduced into the House by U.S. Rep. Jared Golden, a Democrat who represents Maine’s 2nd District and also supports the Restaurants Act, although he is not a co-sponsor. The Restart Act would cover six months’ worth of payroll, benefits and fixed operating expenses. Part of the loan would be forgiven based on lost revenue, thus offering the most help to the ones who are suffering the most. The rest of the loan would be paid back over seven years.

Last week, the state unveiled its own $200 million plan for small-business relief. Most of Maine’s small, independent restaurants would likely be eligible for the Maine Economic Recovery Grant program, which provides grants of up to $100,000 for businesses with up to 50 employees, Dugal said. But independent restaurateurs with two or three restaurants probably would not be able to meet the restriction on the number of employees, he said.

“It’s ironic that the number of employees can penalize you, when the PPP was all about keeping employees on the payroll,” Dugal said.

Businesses that have been open less than a year do not qualify for the Maine Economic Recovery Grant program, so it won’t be of much help to business owners like MacDougal, owner of Cocktail Mary.

Funds from the state program can be used to cover payroll, rent, utilities, some inventory and costs associated with reopening, such as personal protective equipment. While the Restaurants Act would require restaurants to subtract the amount of any federal loans that have been forgiven when calculating their losses, the state program requires that they subtract only those funds that haven’t yet been spent.

But there is one big, overarching difference between all of these other programs and the Restaurants Act. The Restaurants Act is the only effort devoted solely to the restaurant industry, Dugal said: “I think it’s an investment in the future.”

The need to target the restaurant industry is dire, Day said, because so many other businesses rely on them for their own economic health. It is, he said, “almost an endless web of mutual interest.” If restaurants fail, he said, there would be a cascading impact affecting the 5 million workers who indirectly rely on restaurants for their livelihood, including farmers and fishermen.

MacDougal called restaurants “community builders” because every dollar spent at a restaurant “goes directly into the economy, and in a very diverse way.”

“They are really like the central nervous system of the local economy in a lot of ways,” he said, “because they’re employing farmers, they’re employing distributors, they’re employing beverage makers. They’re employing students, parents, single mothers. There isn’t a class of people that isn’t somehow involved in this business.”

Carmen Harris, co-owner of Magnus on Water in Biddeford, says that’s one reason she supports the Restaurants Act: “It’s not just about restaurants,” she said.

Harris isn’t sure if her own restaurant would qualify for a grant since it opened in January, and she has no revenues to show for 2019. (She faced a similar issue with the original PPP, but was ultimately able to get a loan.) The money would allow her to keep paying her suppliers, provide health care for her staff, and make up some of the restaurant’s big losses, she said.

Like Malin and MacDougal, she’d also like to explore new ways to generate income. Magnus on Water, for example, makes its own sea salt, and is known for its cocktails.

“I would love to get those on shelves,” Harris said. “People aren’t going away. Customers can’t come to us, how do we come to customers?”

Magnus on Water was open only eight weeks and just starting to get a few regulars when the pandemic hit. Social distancing has not been possible inside the 27-seat restaurant, but luckily Harris and her partners had built a patio with a water view that could seat 50 people. Now, with social distancing on the patio plus a sidewalk extension, Magnus can seat 25 to 27 people outdoors.

The patio didn’t open until mid-July. Harris said they made “a very intentional decision” not to reopen until they were certain it would be safe for everyone. Harris even called the Maine CDC to get data on new COVID infection rates for York and Cumberland counties.

“We wanted to see those rates go down in the African-American population because Black lives do matter,” she said. “You know, the deep disparities in infection rates between Black and white here in the state is the worst in the country, so I felt like being a Black woman and owner, we could not make a decision to reopen a restaurant” until those rates started trending downward.

Harris said even if the Restaurants Act doesn’t pass, she thinks one section in particular should be used as a template for future programs: For the first 14 days it is in effect, the act will give priority to restaurants that are owned by women and minorities.

“In this conversation we’ve had around racial reckoning and how to support Black-owned businesses, I think that’s a very important part of the Restaurant Act,” Harris said.

Meanwhile, Harris doesn’t talk about whether or not her new restaurant – her “baby” – will survive. She doesn’t want to use that word.

“I say that Magnus on Water will thrive,” she said, “and we all work in support of continuing to rock the baby.”

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