PPP possibilities, Delivery caps and gains, JBF cuts, and more...
Family Meal - Friday, May 8th, 2020
Hello Friday,
Let’s get to it…
The Rules – Some mixed intel on future forgiveness of PPP loans: Earlier this week, Politico’s Zachary Warmbrodt had the bad news: “Treasury Secretary Steven Mnuchin on Monday signaled that he will not ease restrictions on how small businesses must use emergency government-backed loans issued to prevent layoffs, amid a lobbying push aimed at giving employers more flexibility… Mnuchin didn't indicate any willingness to change the terms and put the onus on Congress, even though the Trump administration was responsible for the 75 percent payroll requirement.”
Not very promising if you’re struggling to hire staff back.
BUT per Alan Rappeport and Emily Flitter in the New York Times Wednesday, some new pressure has been brought to bear: “On Tuesday, more than 20 bipartisan senators urged Mr. Mnuchin and [SBA administrator Jovita Carranza] to change the loan forgiveness criteria to allow small businesses, and particularly restaurants, to use the program, saying just 50 percent of the loan should be devoted to payroll, with the rest paying for other overhead.” And on Wednesday, “The Independent Community Bankers of America, which represents smaller banks, asked the Treasury and the Small Business Administration… to require only half of the loans made through the aid program to be spent on payrolls and allow the loans to be split evenly between paying workers and covering rent, which remains a substantial expense for many businesses.”
NB: The administration already kind of moved the goalposts after-the-fact to claw back money from big public companies that got the loans, so looks like we’ve got ourselves a good old fashioned game of regulatory Calvinball here!
Also happening on the hill…. The Washington Post’s Tim Carman reports, “A bipartisan group of lawmakers has been working with chef and humanitarian José Andrés and his nonprofit organization, World Central Kitchen, to introduce the FEMA Empowering Essential Deliveries Act, a bill that will expand the range of people eligible for FEMA assistance. It will allow local and state governments to partner with restaurants and nonprofit groups to feed all those in need during covid-19, with the federal agency picking up the costs of the programs.”
The Tease – In CA, per Eater SF’s Eve Batey: “Despite expectations that recommendations related to the opening of restaurants would be released by the state [yesterday], at his daily briefing on California’s response to the COVID-19 crisis on Thursday, Gov. Gavin Newsom provided little insight into how the state’s food industry might move forward, and instead said that guidelines for sit-down dining would be released on Tuesday, May 11.”
The Caps – Headline in Washington City Paper: “D.C. Becomes Third City to Pass Law Temporarily Capping Food Delivery Commissions.” Story from Laura Hayes: “D.C. joined Seattle and San Francisco in passing legislation that institutes a 15 percent cap on the commission fees third-party delivery services can charge restaurants and bars throughout the duration of the city's public health emergency. The bill, passed by the D.C. Council on Tuesday, needs Mayor Muriel Bowser's signature before it becomes law.”
The Gains – Lest you feel too bad for the tech cos, per Vanessa Wong in Buzzfeed: “Grubhub reported record revenues of $363 million from January through March, up 12% from the same quarter a year ago… Grubhub’s record quarter included about two weeks at the end of March that were negatively impacted by coronavirus closures, but its business quickly rebounded. The company reported the number of daily average orders in April increased by 20% compared to a year ago, and ‘all of our non-New York markets are experiencing a growth surge with many over 100% year-over-year.’”
Key paragraph in the Grubhub shareholder letter (via Kristen Hawley on Twitter): “We separately paused ordering at most non-partnered restaurants in late March because the widespread temporary restaurant closures were resulting in poor diner experiences since we had no way to ascertain whether a non-partnered restaurant was open or closed. More recently, we have been actively managing the non-partnered program, adding restaurants when we have confidence in their hours of operation.” In other words, their AI-machine-learning-neural-network-bot-army didn’t work, so the team had to buckle down and make some phone calls. Now back to (one party consent) business as usual.
Favorite sentence in that same letter: “For now, COVID-19 is a net tailwind for our growth metrics.” [Dick Cheney drives past in solid gold MRAP, doffs Stetson, big wink.]
The Beard Cuts – In a report on what the James Beard Foundation has been up to these days, Kristen Hawley says in Food & Wine that JBF has “had to furlough a portion of its 60 employees, including those who worked at the James Beard House, a restaurant space in Manhattan. [CEO Clare Reichenbach] declined to share the exact number of affected employees, but said that every department of the foundation had been impacted.”
Some Sad News – Eater NY’s Tanay Warerkar and Luke Fortney put together a group obituary for eleven NYC industry figures killed by COVID-19 this year. They are: Domingo Vega (45); Joseph Migliucci (81); Vincent Mesa (76); Jose Torres (73); Joe Joyce (74); Moe Albanese (95); Jesus Roman Melendez (49); Floyd Cardoz (59); Jonathan Adewumi (57); Andreas Koutsoudakis (59); and Vincent Cirelli Sabatino (68). Not on that list but represented in a separate, newer Eater NY obituary from Serena Dai: “Jimmy Glenn — a boxing world legend who went on to run popular Times Square dive bar Jimmy’s Corner... He was 89.”
The Interview – For the New Yorker, Helen Rosner interviewed Tom Colicchio about restaurants, the supply chain, and his efforts with IRC. Not a ton of new ground broken, but definitely worth sending around to non-industry types struggling to understand the situation. Little gossipy bit: Re that White House hospitality council dustup a few weeks back, Colicchio says, “You know, there was a lot of criticism when it was announced —‘Ooh, it’s just a bunch of white-tablecloth white guys.’ I get that. But if I’m one of those chefs, and I’m desperately trying to save the industry however I can, and I get a call from the White House—it’s hard to say no to that. Would I have said, ‘This is a great honor’ [like Thomas Keller]? No, I don’t think I would have done that.”
And that’s it for today. After 19 straight days of no new local cases here in Hong Kong, bars are reopening today (alongside gyms, spas, barbers, etc.), and I’m heading out to see how it goes for myself in a few hours. Hero, I know. Will try to post observations on Twitter and Instagram as I hop around, and happy to answer whatever questions you may have. If quality declines throughout the night, it’s probably a perception problem on your end.
I’ll see you here Tuesday for next Family Meal.
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