Months after reopening, restaurants still struggle to stay afloat

Stephanie Thomas got a letter in October from her restaurant’s landlord demanding $17,000 in 10 days. She had no way to pay it. It’s a story that many Atlanta-area restaurants know all too well. The pandemic brought a sudden end to restaurants that had been successful for years. It’s happening on a national scale, too. More than 110,000 restaurants have closed long-term or permanently in 2020. Workers are also hurting. The hospitality sector has the most initial jobless claims during the pandemic, according to the Georgia Department of Labor. The restaurant industry has lobbied Congress for a second round of financial stimulus for months, to no avail

Few customers, tight finances as coronavirus exacts ongoing toll

Stephanie Thomas got a letter in October from her restaurant’s landlord demanding $17,000 in 10 days. Problem was, she had no way to pay it.

“I had never been in that kind of situation in my life,” she said on a recent, rainy Friday inside Caffe Bella, her Westside coffee and beignets shop. “I had just paid them $150 three days earlier and that was all I had.”

Two doors down, at Twisted Soul Cookhouse & Pours, Deborah VanTrece has struggled financially, too. Her catering business is “at zero” and hosting holiday parties is “off the table,” she said.

In Marietta, Christos Giannes also got a demand letter in October. He says his landlord refused to budge, leading Giannes to close his Greek restaurant, Kouzina Christos, last weekend after 40 years of business.

“I told my landlord, we’ve got to come to some kind of agreement here, I’m doing a third of my normal business and I don’t see it coming back,” he said. “I didn’t hear anything from them till they sent the letter asking for full payment.”

After 40 years serving the Marietta community, Kouzina Christos closed permanently Saturday, Dec. 5, 2020. Regular patrons, staff and family, including Pete Trapani, leave notes on a pizza paddle for the owner, Christos Giannes. The Greek Mediterranean restaurant closed early on Saturday but staff and regulars stayed late into the evening.  (Jenni Girtman for The Atlanta Journal-Constitution)
After 40 years serving the Marietta community, Kouzina Christos closed permanently Saturday, Dec. 5, 2020. Regular patrons, staff and family, including Pete Trapani, leave notes on a pizza paddle for the owner, Christos Giannes. The Greek Mediterranean restaurant closed early on Saturday but staff and regulars stayed late into the evening. (Jenni Girtman for The Atlanta Journal-Constitution)

Credit: Jenni Girtman

Credit: Jenni Girtman

It’s a story that many Atlanta-area restaurants know all too well. The pandemic has brought a sudden end to restaurants that had been successful for years.

Ah-Ma’s Taiwanese Kitchen in Midtown, Anne and Bill’s in Forest Park and Rise-N-Dine in Emory Village are some of the long-running local restaurants with devoted customers that closed this year.

It’s happening on a national scale, too. More than 110,000 restaurants have closed long term or permanently in 2020, according to the National Restaurant Association. Typically, about 50,000 close each year.

National chains like California Pizza Kitchen and local restaurants like Hudson Grille in Sandy Springs have filed for bankruptcy, but the pace of restaurant bankruptcies is little changed from 2019, according to the American Bankruptcy Institute.

Federal relief loans earlier this year like the Paycheck Protection Program helped many restaurants large and small survive this spring’s economic shutdown. A temporary improvement in COVID-19 case numbers in summer and fall bought more time.

As 2020 nears its end, however, loan proceeds have run dry and coronavirus cases are surging again. Winter is the slowest time of year for business, and costly permit renewals like liquor licenses come due in December, an expense that typically runs about $40,000.

Workers are also hurting. The hospitality sector, which includes restaurants and hotels, has had the most initial jobless claims during the pandemic, according to the Georgia Department of Labor. From March 21 to Oct. 17, Georgia hospitality workers filed 941,356 new claims, compared to 452,617 claims for health care and social workers, the second-highest category. The state doesn’t provide a breakout of claims for only restaurant workers.

The restaurant industry has lobbied Congress for a second round of financial stimulus for months, to no avail.

George Basco, who closed Rise-N-Dine in October after 13 years in business, said the need to space out diners for social distancing has made it difficult to generate enough traffic to meet expenses.

“Volume is what makes a restaurant profitable and, in the pandemic, you can’t do volume,” he said.

Stephanie Thomas was in danger of losing Caffe Bella, the Atlanta coffee shop she opened four years ago, when her landlord demanded she pay her rent in full. The shop was saved when she raised the money by turning to crowd funding. Ben Gray for The Atlanta Journal-Constitution
Stephanie Thomas was in danger of losing Caffe Bella, the Atlanta coffee shop she opened four years ago, when her landlord demanded she pay her rent in full. The shop was saved when she raised the money by turning to crowd funding. Ben Gray for The Atlanta Journal-Constitution

Credit: Ben Gray

Credit: Ben Gray

At Caffe Bella, Thomas walked a financial high wire once in her restaurant career already. She quit her job in 2012 at a civil engineering firm and cashed out her retirement plan and other savings accounts to generate $50,000. She used that money to open Caffe Bella in March 2018 on Huff Road.

Thomas built a loyal following as word got out about the quality of her coffee, sourced directly from a farm in Nicaragua. She and her son, Jalil, concocted their house blend after she took a two-week course at Bellissimo Coffee Advisors in Portland, Oregon.

“You’re not going to get this anywhere else,” she said.

Caffe Bella closed for several weeks during the pandemic’s early days, then offered takeout through her shop’s front door during the summer. The inside dining area reopened in October. Sales are still down compared to last year, she said.

The pandemic has had a similar financial impact on thousands of other restaurants, according to a National Restaurant Association survey in late November. About 87% of full-service restaurants said sales had dropped an average of 36% compared to 2019. While many cut staff, costs didn’t fall enough to offset lower sales; 59% of owners said labor costs are higher now than a year ago, due to higher spending on supplies to protect staff and customers from the coronavirus.

When a demand letter arrived from her landlord on Oct. 15, Thomas says she realized that Caffe Bella would likely close. She also had been turned down for a PPP relief loan earlier in the year.

Then fortune smiled.

Thomas had heard about GoFundMe, so she started a fundraiser. Through word of mouth, the page raised more than $20,000 in about four days, enough to carry her through a few more months’ rent.

“We weren’t ready to just move out of here,” she said. “Fortunately, it wasn’t our time to walk away.”

According to public records, Houston-based Venterra owns her building. In an emailed statement, the company said “throughout the pandemic, we have worked with our commercial tenants to help them weather this unprecedented crisis.”

Deborah VanTrece, owner and chef of Twisted Soul Cookhouse, checks on diners Paul & Amanda Mayberry and their son Will during their evening meal inside a plexiglass cubicle at the restaurant on Wednesday, Dec. 9, 2020, in Atlanta.  “Curtis Compton / Curtis.Compton@ajc.com”
Deborah VanTrece, owner and chef of Twisted Soul Cookhouse, checks on diners Paul & Amanda Mayberry and their son Will during their evening meal inside a plexiglass cubicle at the restaurant on Wednesday, Dec. 9, 2020, in Atlanta. “Curtis Compton / Curtis.Compton@ajc.com”

Credit: Curtis Compton / Curtis.Compton@

Credit: Curtis Compton / Curtis.Compton@

To be certain, many restaurants remain on solid footing. The Pullman, a gastropub in the Kirkwood neighborhood, has remained open because owner Sarah Santiesteban said she’s limited spending on food and alcohol.

To prep for winter, though, a big outlay was needed to build an outdoor seating area on the street, as Atlanta City Council now allows. She spent a lot (she wouldn’t say precisely how much) on metal barricades, a canvas overhang and two propane heating towers (the last ones at her nearby Lowe’s).

VanTrece of Twisted Soul has dug into her bank account, too. She’s spent “at least” $20,000 on all sorts of ways to rejigger her restaurant for the new normal. That includes outdoor heaters, Plexiglas partitions for indoor seating, supplies for takeout service and constant revisions to her menu to find something that works.

“We used to have tons of different veggies and the sides used to be different for every entree,” she said.

These days, to cut costs, she’s keeping variety to a minimum and “figuring out how many different ways we can do rice.”

ExploreAtlanta restaurants prepare to dress for cold weather
Diners fill plexiglass cubicles during the busy time of day, though busy is relative during a pandemic, at the peak dinner hour in Twisted Soul Cookhouse, on Wednesday, Dec. 9, 2020, in Atlanta.  “Curtis Compton / Curtis.Compton@ajc.com”
Diners fill plexiglass cubicles during the busy time of day, though busy is relative during a pandemic, at the peak dinner hour in Twisted Soul Cookhouse, on Wednesday, Dec. 9, 2020, in Atlanta. “Curtis Compton / Curtis.Compton@ajc.com”

Credit: Curtis Compton / Curtis.Compton@

Credit: Curtis Compton / Curtis.Compton@

VanTrece’s wife, Lorraine Lane, and daughter, Kursten Berry, help her run Twisted Soul, which opened in 2014. But the “global soul food” restaurant is Deborah’s baby, as she’s both chef and business manager.

Sales are down at least 50% from pre-COVID days. A rebound this summer has now reversed. Hosting dinner parties was a big part of Twisted Soul’s business and the holiday season was one of the busiest times for those events.

“We felt like we were holding our own, but now we’re just hoping that answers are going to come before the money runs out,” she said.

VanTrece plans to wait until some time in early 2021 before making a final decision. She may even try what she sees as a last gasp — paying what she said are exorbitant fees to a third-party delivery service like DoorDash.

Christos Giannes closed his Marietta restaurant Kouzina Christos in December after 40 years in business, due to financial pressures caused by COVID-19. (Handout)
Christos Giannes closed his Marietta restaurant Kouzina Christos in December after 40 years in business, due to financial pressures caused by COVID-19. (Handout)

Credit: Handout

Credit: Handout

Lunchtime meetings fueled a large part of sales at Kouzina Christos before the pandemic, its huge dining area packed with workers from the office parks along Powers Ferry Road. When those buildings were vacated in March, its lunch business disappeared.

Insurance, utilities and fees to show cable programming on the dining room’s myriad TVs still had to be paid.

“When you’ve got a 6,000-square-foot restaurant, you’ve got fixed costs that just don’t go away,” said Giannes, the longtime owner.

He cut staffing from 15 workers to four, but sales had tanked. Full-year revenue for 2020 was on pace for $250,000, a 75% drop from 2019. Only about 10 to 15 people per day came for lunch in recent weeks, in a restaurant that had seating for 200 people before the pandemic.

Christos’ space in a shopping center, with active businesses on both sides, made it difficult to implement curbside or drive-through service. And Giannes said his Greek cuisine doesn’t translate well to takeout anyway.

Giannes said he tried throughout spring and summer to negotiate rent concessions with his landlord, but never got a response. In October, the landlord sent a letter demanding six months’ rent. He declined to disclose the amount, but it was more than he could afford.

In the end, the 65-year-old Giannes decided to pull the plug on the career he built from skills learned while working as a teenager at his parents’ pizzeria in Moosup, Connecticut.

After 40 years serving the Marietta community, Kouzina Christos closed permanently Saturday, Dec. 5, 2020.  Lidiya Vilkaitis, the manager who worked for 26 years at the establishment, had to tell walk-in diners they are closed. (Jenni Girtman for The Atlanta Journal-Constitution)
After 40 years serving the Marietta community, Kouzina Christos closed permanently Saturday, Dec. 5, 2020. Lidiya Vilkaitis, the manager who worked for 26 years at the establishment, had to tell walk-in diners they are closed. (Jenni Girtman for The Atlanta Journal-Constitution)

Credit: Jenni Girtman

Credit: Jenni Girtman

On Christos’ final night this month, a steady trickle of customers was turned away starting around 7:30 p.m., when the kitchen ran out of food.

Jim Viney of Marietta dropped by to say goodbye. Viney had been a regular since Christos’ opening in 1980, when Christos Giannes’s late brother, Sandy Giannes, was the restaurant’s manager and very public face.

“I would sit at the end of the booth to try to keep (Sandy) out,” Viney joked. “But he would push me in and sit down, then show off his new switchblade or gun.”

Sandy, who sold weapons as a side gig, died in 2011. Two photos hanging on the wall near the entrance show him playfully flipping a bird.

Christos Giannes assumed business manager duties after Sandy’s passing. Before March, he had added steak, seafood and other higher-priced items to the menu. Sales of those dishes, which helped fuel the dinner business, vanished during COVID.

With the Marietta restaurant closing, the Giannes family will no longer be involved in the daily operations of a restaurant. Christos Giannes’ two sons worked there when they were younger, but now one owns a jewelry business and the other attends flight school.

Christos now plans to start a consulting business.

“I don’t want to be bitter about it,” he said. “We did what we had to do to stay open as long as we could.”

In Other News