Coronavirus

‘It’s a f— nightmare.’ Layoffs hit as South Florida restaurants close over coronavirus

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Michael Palou was getting ready for work Monday as a high-end restaurant chef when his phone pinged with the news that he had been laid off.

His roommate and lifelong friend, Gianni Arriago, a waiter at a different restaurant, staggered home with word that he, too, had been furloughed on the same day. Overnight the two 28-year-olds found themselves unemployed and desperate over how they will survive — much less pay the rent at their $1,500 a month Little Havana apartment.

“We’re all panicking,” Palou said. “People need to know this is the hardest thing that has ever happened to us after Hurricane Andrew.”

Like the feeder bands from a storm, the first effects of the coronavirus made landfall on Miami’s bustling restaurant industry as owners closed restaurants and cut staff after the government ordered dining rooms closed Tuesday to lessen the spread of the virus.

On the other end of that text was chef and restaurateur, Michael Schwartz. Overnight, his group of nine restaurants, including Michael’s Genuine, Tigertail and Mary, Harry’s Pizzeria and its catering company, went from 460 employees to six.

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Schwartz, winner of the James Beard award as one of the best chefs in the South, visited several of his restaurants and tried to break the news to as many people in person. Some, however, learned about it in a company-wide email and from an Instagram post.

“It was a gut-wrenching, heart-breaking, nauseating day,” Schwartz said. “It’s a f— nightmare.”

Similarly, all over South Florida, restaurant owners were deciding whether to close completely or trying to stay afloat offering only take out and deliveries.

Restaurant industry asks for government relief

Like Schwartz, chef Michelle Bernstein and husband David Martinez looked at their numbers and decided their only option was to close their popular Little Havana spot, Café La Trova, a lively bar, restaurant and old-world Cuban music venue that is now indefinitely mute.

They have tried to keep food sales going via pickup and delivery at their Miami Beach bar and restaurant Sweet Liberty, even lightheartedly offering a roll of toilet paper with each order. But Martinez admits “it has not been successful” and will not last for long, either.

“We had to tell 90 people at La Trova alone that we were closing down,” Martinez said. “No restaurant can afford to pay their entire staff when there’s no money coming in from anywhere.”

Martinez said they are paying 100% of their employees’ healthcare benefits “until we can’t do it anymore.”

His spouse, Bernstein, a James Beard winner herself with a national platform and a popular PBS television show “Check, Please!”, took to social media to urge legislators for immediate help.

She is asking cities, counties and the state of Florida to let restaurants keep their sales taxes, which would be due March 20. That chunk amounts to 7% of all sales, with municipalities tacking on another 1-2% for an industry that employs 12 percent of the state of Florida and generates more than $50 billion.

“We’re all going to come out of this losing a restaurant,” Bernstein said. “Why can’t our legislators offer us some kind of break?”

Many restaurants are now calling for government intervention, as did the Life House hotel and restaurant group, which shut their restaurant Mama Joon with only hours notice.

“We understand that this is a particularly hard time for the individuals who lost their jobs and we understand that this extends well beyond those at our venues,” they wrote to the Miami Herald in an email. “We are currently evaluating ways in which we can help those in need, and are hopeful that the local and national government will be able to put a plan in place to aid these individuals and the industry as a whole.”

The U.S. Department of Labor announced Wednesday it would let states apply for up to $100 million in grants to help self-employed workers and workers who have lost their jobs or had their hours cut because of what the department labeled a “disaster.”

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President Donald Trump spoke to CEOs of the country’s largest restaurant companies Tuesday. But owners of independent restaurants say it’s the small mom-and-pop restaurants — even larger independents like David Chang of Momofuku and Danny Meyer of the Gramery Tavern and Shake Shack — that need to be in on those conversations. Meyer’s group laid off 2,000 Wednesday.

“McDonald’s and those guys, those aren’t restaurant groups, those are real estate firms,” said Miami restaurant owner and chef Michel Beltran.

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He said smaller restaurants like his are desperately trying the take-out and delivery model to stay afloat.

Small restaurants try to pivot

Beltran, 34, who owns three restaurants in Coconut Grove, had to slash his managers’ salaries by up to 40 percent and lay off most of his 100 employees. He redid the menu for grab-and-go items at his Chug’s Cuban-American diner, adding new items like empanadas and doubling down on their inventive pastelitos, stuffed with filling like peanut butter and jelly. He is offering meal kits and half-off discounts on wines from his other two restaurants, Ariete and Nave.

From those sales, he is pledging 15 percent of sales and the bulk of tips to a fund for his unemployed staff. But he knows that’s barely an aid to his staff.

“I’m scrounging to keep people’s livelihoods above water,” he said. “Our (employees) are what make our restaurant special. So we have to do everything we can for them.”

As for fees? Beltran said he’s telling other restaurant owners to use their sales taxes to pay out-of-work employees and negotiate with landlords over rent and mortgages.

“The one thing I told everyone is, ‘Hold on to your money. What are they going to do, evict you?’ Eviction court is closed right now,” Beltran said.

For now, owners and employees find themselves making very different plans. Schwartz said his company has started the complicated process of applying for for several one-year, no-interest bridge loans from the $50 million Florida Gov. Ron DeSantis made available this week.

For cooks like Palou, there are graver concerns.

He was once planning a pop-up of his experimental restaurant, Parcha, at a weekend Wynwood event that was canceled. “I thought that could be the beginning of something big. Now this,” he said.

His roommate, Arriaga, is wondering whether he will have to leave the industry after downtown Japanese restaurant Zuma layed him off with 11 hours of personal time.

And he wonders about his mother, who he says cleans houses in Miami to help pay for his little brother’s cancer medication.

Friday is their last paycheck.

“This is a chain reaction,” Arriga said, “and it hits every single person.”

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