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Texas Restaurants Request New Federal Aid as COVID Cases Surge

Rachel Hart

August 25, 2021

Industry leaders in the restaurant sector are continuing to lobby for fresh federal aid, following the allocation of $1.6 billion to Texan culinary establishments as part of the nation’s Restaurant Revitalization Fund. Despite this significant boost, some 12,000 restaurants throughout the Lone Star State did not receive grants, and continue to struggle as new cases of the Delta variant reach record highs statewide.

The Texas Restaurant Association is one of several national organizations pushing for restaurant-based federal assistance. Last spring, the group lobbied for the passage of a $120 billion fund based on the calculated needs of struggling restaurants nationwide. Ultimately, however, they were offered less than a quarter of the requested amount.

Emily Williams Knight, CEO of the Texas Restaurant Association, expressed her frustrations with the shortcomings of the Restaurant Revitalization Fund, which was initially launched in early May.

“We’re about $2.8 billion short of what is needed and what was requested out of just Texas restaurants,” Knight explains. “There are 12,000 restaurants in Texas that did not receive a grant, and the only two states that are higher than that are California and New York. These are eligible applicants that missed the boat, and that’s a really large number of restaurants.”

The impacts of COVID-19 upon the restaurant industry have been staggering–effects that have only been exacerbated by the rise of the highly contagious Delta variant. According to a survey of more than 6,500 restaurant operators, the National Restaurant Association found that the culinary industry suffered more than any other sector in the nation over the past year and a half, receiving massive blows to sales and job holdings since the pandemic began.  More than 8 million restaurant employees had been laid off or furloughed as of April, with 61% of operators stating that existing plans for federal relief would be insufficient to prevent additional layoffs and closures.

Despite some reports that business is actually rebounding for restaurants across the country, some argue such statistics fail to reflect the paper-thin margins many are grappling with in order to stay afloat. Many food businesses report operating unprofitably, as the costs of goods continue to rise alongside the surging number of COVID cases.

“In a 7% to 8% margin business, those types of cost pressures really put restaurants in a pinch, so they still need this,” explains Emily Knight. “And now, we have this emerging Delta variant, and if that starts to sway consumer demand, our restaurants will be right back in the midst of it again; of just tremendous pain.”

One Texan business owner experiencing these struggles firsthand is Nancy Procaccini: owner of Mama’s Daughter’s Diner located in Dallas. Procaccini has applied for over a dozen loans and grants over the past year, in an effort to keep her doors open. The restaurant is the legacy of her late mother, and Procaccini is determined to exhaust all possible avenues to keep her business alive. She spoke to the dire importance of the types of funds being lobbied for by the Texas Restaurant Association.

“These government loans and grants are the only reason I’m still in business, and I wouldn’t have made it without this money,” Procaccini explained. “I actually have [cash flow from the Restaurant Revitalization Fund] in my savings, because I’m a little hesitant to spend it right now. My operations need to be profitable, and we’re not right now because costs are up so much. I really just want to hang onto this money to wait and see what happens, because this pandemic is not over. My heart goes out to a lot of restaurants that have closed, and those who applied for this grant money but did not get it.”

Additional Dallas-area restaurants to receive grants from the Restaurant Revitalization Fund include Toasted Coffee, Garden Cafe, East Hampton Sandwich Company and Smokey John’s Bar-B-Que–this according to data provided by the Small Business Association. Funds allotted vary depending on the difference between gross receipts from 2019 and 2020, minus applicable loan amounts from the Paycheck Protection Program. It remains to be seen whether additional Texan establishments will benefit from new fund allocations in the future.

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