COVID What's Next: Can restaurants and bars, already wounded or worse, survive a second wave?

Jean Mikle Sarah Griesemer
Asbury Park Press

Editor's Note: COVID-19 killed tens of thousands in the Northeast, caused massive unemployment and wrecked the economy. In an ongoing series of stories, the USA TODAY Network Atlantic Group, 37 news sites including APP.com, examines what the government got wrong in its response to the virus, what policies eventually worked — and why we remain vulnerable if the coronavirus strikes harder in the fall.

Summer's the time for attending big concerts, signing up for theater camps, for gathering with family and friends at favorite restaurants or taking a spin on a favorite amusement ride.

The coronavirus pandemic has upended New Jersey's summer; large outdoor gatherings are prohibited and indoor concerts, dining and plays aren't allowed. Thousands of people in the state's entertainment and restaurant industries remain unemployed.

While public health officials and other industries prepare for a possible second wave of virus cases in the fall, restaurant owners, musicians and workers at bars, nightclubs and theaters are struggling to survive the first wave of COVID-19.

Jason Dermer, technical director of Madison Asbury Waterfront Venues, talks about the Paramount's history during a behind-the-scenes tour of the Paramount Theatre in Asbury Park, NJ Monday, March 28, 2016.

"A lot more needs to be done or this whole industry is going to collapse," said Lee Frankel, who owns Crossroads, a live music venue, restaurant and bar in Garwood. "Everybody has come back but us. It's a scary time. There is still a large percentage of the population that is too scared to go out."

With a tent over an outdoor patio, Frankel has started holding acoustic shows and serving food outdoors, but he worries that live music indoors is a long way off. "We are attempting to tread water, just to do what we can," he said.

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Jason Dermer owns Asbury Audio, a full-service production company in Farmingdale that provides equipment, technical and production services for concerts and other events. Normally he'd be busy this summer; Dermer also serves as technical director for Asbury Park events presented by Madison Marquette, which owns and operates the Stone Pony and Stone Pony Summerstage, the Wonder Bar, Convention Hall and the Paramount Theatre.

But the summerstage is shut down this year, the Stone Pony is closed and there is no live music in Asbury's big venues. Like everything else in the music and entertainment industry, Dermer wonders when live concerts will return.

"It’s just so hard to say," Dermer said. "I certainly hope things can start happening by late spring or summer (of 2021). I can pretty much make it through until April and May with no work coming in, but beyond that, it would be difficult."

Dermer considers himself lucky, as he's still working for Madison Marquette, and his company has some work this summer building road cases and equipment cases for touring bands. 

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"It's not a huge amount of money, but it's something," he said.

The most recent state unemployment statistics tell the story of the wreckage the pandemic has wrought on New Jersey's leisure and hospitality industry. 

In February, before the spread of COVID-19 led Gov. Phil Murphy to shut down the state, 404,000 people were employed in leisure and hospitality, which includes hotels, restaurants and bars. By April that number had plummeted 63%, to 145,000.

Brian Fallon and Lee Frankel at Crossroads in Garwood.

Recovery has been slow. 

In June, the leisure and hospitality industry added 35,300 jobs, but it remained nearly 47% below a year ago, according to state figures.

Thousands of workers at theaters, restaurants, bars and music venues — as well as musicians and actors — remain out of work. There is no timetable for their return, and many say the federal government has not done enough to assist arts organizations that are struggling to survive.

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Among those out of work are employees at the Ritz Theater Company in Haddon Township. 

“We stayed on for about a week when this all started, and then we furloughed everybody and went on unemployment,’’ said Bruce Curless, producing artistic director at the theater. “Then the (Paycheck Protection Program) loan came through. We came off unemployment, but to a certain extent, there was nothing to do. We planned for the first scenario, but now we are past about six different scenarios.

“Whoever thought it was going to last this long?’’ reflected Curless, who once again laid off himself and most his staff. “Now it’s kind of up for grabs.’’

Dominic Roncace, president and chief operating office at Bergen Performing Arts Center in Englewood, said the venue is not planning on having any shows for the rest of 2020.

"We are watching what is going on in respect to things such as a vaccine," Roncace said. "We would consider a show in December if a couple of months down the road, there is a vaccine."

Meanwhile, Bergen PAC is in the process of moving more than 70 shows that were scheduled for the theater this year. 

Bruce Curless, founder and producing artistic director of the Ritz Theatre Company, stands in the lobby of the Ritz Theatre in Haddon Township. The Ritz Theatre Company is currently celebrating its 30th anniversary season. 02.19.15

"There is a dual devastating impact," Roncace said. "Not only are the 70-plus shows that we have booked not able to be presented, but people who bought tickets to those shows may request refunds... In addition to that, your sponsors and underwriters of programs, don’t have any programs to donate to and underwrite."

Bergen PAC has furloughed 85% of its staff, he said.

The issues facing Bergen PAC are affecting arts institutions everywhere.

By June 29, nonprofit arts and cultural organizations nationwide had suffered losses of approximately $8.4 billion, according to Americans for the Arts.

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The organization reported that 96% of organizations had been forced to cancel events for a loss of 325 million admissions and $10.3 billion of lost event-related spending by audiences at local businesses.

It's a similar story at Red Bank's Count Basie Center for the Arts, which was nearing the end of a $28 million expansion when the pandemic struck.

In early July, Basie President and CEO  Adam Philipson said the theater was losing nearly $1 million a month.

"The reality is that the pandemic has left the Basie in dire straits," said Philipson. "Our sectors have been decimated, and we need to be the recipient of a reinvestment through a federal stimulus program. Many venues across the country are closing, and others that will prevail deserve to be recognized for driving the economy. Clearly we will need a major fundraising effort or a miracle cure to end this disease."

Dominic Roncace, ceo, Bergen Performing Arts Center; Lt. Governor of NJ Kim Guadagno

New Jersey's restaurants are also finding it difficult to survive, with indoor dining still prohibited. While some eateries have space to accommodate many outdoor diners, other spots have limited — or no — outdoor area, and have been restricted to offering takeout meals. 

The challenges restaurants face

In late July, after four months of 618 Restaurant's large indoor dining room being closed for business, co-owner Matthew Borowski took a drastic step: He knocked down the walls.

Not all, of course, but enough to meet expanded outdoor dining requirements Murphy announced earlier in the month that allow bars and restaurants to serve patrons in spaces that have two of four walls open. (A prior executive order prohibited restaurants from serving customers in open-air settings with permanent roofs.)

Borowski said he made the decision to open the dining room, adding 45 seats to the Freehold Borough restaurant's outdoor offerings, because one rainy night can cost him thousands of dollars in sales.

Sal Asaro’s Colts Neck restaurant, Huddy’s Inn, is in a unique position in that it has nearly as much outdoor dining space as indoor. This aspect of his business gives him hope for the restaurant’s future.

Pre-pandemic, he could seat more than 200 diners indoors. Outside, the restaurant sits on nearly 7 acres that include a grassy area where alcohol is permitted and a 2,000-square-foot covered bar. This allows for “well over 150 people” when allowing for social distancing, Asaro said.

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“Our outside dining was already well-established before COVID hit,” he said. “We just enhanced and expanded.”

Sal Asaro of Lincroft, co-owner, talks about the outdoor space at Huddy's Inn in Colts Neck.

"I feel very, very bad for the restaurants that cannot accommodate outside diners," he said.

Restaurants like Amy Russo Harrigan's Toast in Montclair, where she can squeeze a few tables onto the sidewalk, compared to 122 seats indoors. When the governor announced indoor dining would resume July 2 – a decision that was quickly reversed – she was angry. 

"This was literally going to save us," said Russo Harrigan, who also owns restaurants in Asbury Park and Red Bank. "It always is hurry up and wait, and then you think you're going to be able to move forward a little bit."

“We're very, very fortunate and very, very unique in the amount of space that we have to try to return to profitability and viability,” Asaro told The Asbury Park Press in May. “I can see our road to recovery because of our location and because of the land that our restaurant is on. But it's still going to be a challenge.”

Huddy's Inn was a recipient of a federal Payment Protection Program loan, three-quarters of which was used to rehire employees who had been laid off.  A second loan would help, Asaro said in July.

“It would always help for continuing operations, considering if the future becomes a little less clear,” Asaro said. “Right now, New Jersey is lucky; it looks like we’re on the road to recovery. But three months ago, Florida looked like it was fine and now it’s a hotbed. I think just the notion of the unknown is very worrisome for our industry.

“(The situation surrounding the pandemic) continues to evolve, and the people in the restaurant and leisure business are just trying to follow protocol and exist,” he said. “It’s about staying in business.”

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Like most of New Jersey's restaurant owners, Asaro questions why state officials are hesitant to allow indoor dining to resume.

“It seems to be a lot of unequal treatment when it comes to allowing people indoors,” he said. “At our restaurant, if we have 200 seats and you allow us 25 (percent capacity), it’s much safer to be in our restaurant than it is at Walmart."

Asaro and his partner in Huddy’s, Ray Longobardi Sr., have kept the business afloat with funds of their own, in addition to the PPP loan.

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“We are fortunate that we could do it,” he said. “We had to write checks and fund the business and get prepared to reopen. The PPP was nice, but it didn’t cover everything, and we have a very big place. We had to bite the proverbial bullet and do what we had to do.”

As for what could have helped his industry early in the pandemic, Asaro said no one can say for sure.

Sal Asaro of the Lincroft section of Middletown, co-owner, talks about the outdoor space and plans for the new indoor dining room setup to help promote social distancing at Huddy's Inn in Colts Neck.

“At the beginning of this pandemic, there were so many conflicting views about what actually was going to happen. Even the (Centers for Disease and Prevention) and Dr. (Anthony) Fauci (director of the National Institute of Allergy and Infectious Diseases), he was telling us that this was going to be no worse than the flu," he said. "This was a total unforeseen catastrophe predicted by very few people.

“This is a catastrophe for the industry and the individuals who put a lot of hard work into building a business that, basically, the government says they’re done,” he said.

Chef Jim Vena, executive chef at The Coal House Bistro in Point Pleasant Beach, is grateful for diners who come to sit beneath the restaurant's tent and umbrella-topped tables. Tent dining has become "a thing," he said, "with reservation requests specifically for a 'tent table'. "

But he hopes for a return to indoor dining by the end of summer, "or second best, in September."  

"The tables and tent represent just a percentage of the inside dining room occupancy," Vena said. "For months now, we pay rent without being able to use inside seating at all. Renting a professionally installed, industrial-strength tent on top of rent raises our fixed expenses. Then it takes more server staff to properly serve outside tables and additional staff to properly pack pickup and delivery food, along with very costly packaging and bags, gloves, masks and specialty cleaning and sanitizing products all raising our variable expenses.

"It's very complicated and needs close management attention on a daily basis as new restrictions change," he said, "and it's our priority that guests' and crew safety is monitored and met."

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George Kyrtatas, an executive chef and co-owner of the SweetWater Bar & Grill in Cinnaminson, said while he has been able to serve customers in a dedicated outdoor space, it’s still a fraction of what they were doing prior to the COVID-19 pandemic.

“It’s been extremely difficult, especially for the restaurant industry,” he said. “Different things that we’re trying to do and come up with, I would not use the word guidance for the government, I would use the words lack of guidance, because they’re saying statements such as outdoor dining is allowed and then you have certain restaurants that have outdoor dining spaces and then the health department closes them down because they have a fixed roof for example.

“And then after the health department closes them down, three days later, the governor changes the wording in his executive order saying fixed roofs are allowed as long as 50% of the walls are opened. It’s really difficult because there is no guidance coming from the higher-ups."

Hathaway’s diner-style restaurant was previously run by his family in the front area of the site, but that is now a banquet space. Kyrtatas said his family has owned a restaurant at that location for about 36 years.

Asked if he expected things to pick up by the fall and winter once things settle down more with the pandemic, Kyrtatas is unsure.

What does the future hold?

Like Kyrtatas, those involved in the states art, music and theater scenes are not sure what the next six months will bring. One thing seems clear: indoor concerts, dance or theater performances seem unlikely before 2021.

"First and foremost, everyone needs money to get them through this," said Bergen PAC's Roncace. "If possible, what would be beneficial is if the government assistant agencies could look at the sector, instead of looking at things broad-based with financial help. Analyze those sectors, understand their business and craft something to help them."

Curless said Haddon Township's Ritz has received about $200,000 so far, primarily in loans, which is enough to keep paying the mortgage, the electric bill and some accumulated loans for now. The theater will apply for additional pandemic relief grants recently announced through the county, Curless says, and at least one staff member has stepped up to keep up with social media and community engagement.

Lobbying groups like the National Independent Venue Association have been urging Congress to include funding for independent venues in a new stimulus bill. The association points out that venues will likely lose $8.9 billion should stages remain dark through the end of 2020.

Americans for the Arts estimates the state's nonprofit and for-profit arts sector contributes about $23 billion a year to New Jersey's economy, representing nearly 4% of gross domestic product. 

"We’re hoping that in this upcoming stimulus package that folks are aware of the number of jobs and folks that are still going to be out of work for the next few months," said John McEwen, of the Morristown-based New Jersey Theater Alliance. "I don’t think people realize the impact of the shutdown. Stagehands, actors, musicians, management staff, a lot of people that the theaters employ. All of these people are out of work."

McEwen, whose organization includes 31 professional theaters in New Jersey, said theaters are attempting to stay in touch with their audiences and make some money by hosting outdoor performances, as well as producing virtual summer theater camps.

In June, the U.K. unveiled a nearly $2 billion package of support for the country's arts industry, including about $1 billion in grants for music venues, theaters, galleries and independent cinemas.

McEwen and other arts leaders would love to see the federal government do something similar for arts organizations in this country.

Crossroads' Frankel agreed that more needs to be done to help the music industry survive. He said banks are making large fees from loans under the Paycheck Protection Program, and should be willing to lend more, and charge less, to venues trying to stay afloat.

"A lot more needs to be done or this entire industry is going to collapse," Frankel said. "...We need somebody to look out for the industry. We’re going to keep you closed for half a year, but with no breaks on insurance and you have keep paying your mortgage, and keep paying utilities."

To survive while their venues are shut down, Bergen PAC and the Basie Center are among venues producing outdoor, drive-in concerts; the Basie Center has also partnered with Allenhurst promoter Tony Pallagrosi's UMT Presents concert production company to open "Supper Club Concerts Under the Stars," an outdoor concert series located behind the Blu Grotto restaurant at Monmouth Park.

"I think it is incumbent upon all of us in the music business to think outside the box," said Pallagrosi, who has had to postpone several shows he had planned to present at indoor venues.

Asbury Audio's Dermer said he expects that quite a few of companies working in the production segment of the music industry will not survive the pandemic shutdown.

Even once venues get the go-ahead to hold concerts again, it will take a couple of months to get touring bands back out on the road, he said. In the meantime, those in the business are not only out of work, but are missing their music industry friends, he said.

"To most of us that work full-time in this business, whether it's on the regional level or the national level, your social life is your work," Dermer said. "It's not just work that got shut down.Iit’s your social life, too."

Jean Mikle covers Toms River and several other Ocean County towns, and has been writing about local government and politics at the Jersey Shore for nearly 35 years. A finalist for the 2010 Pulitzer Prize in public service, she's also passionate about the Shore's storied music scene. Contact her: @jeanmikle, 732-643-4050, jmikle@gannettnj.com.

Staff writers Alex Biese, Tammy Paolino and Celeste E. Whittaker contributed to this story.

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