ORANGE COUNTY, Calif. — For John Nye, an operating partner at Sentinel Restaurant Group in Laguna Beach, the coronavirus pandemic and its negative effect on the restaurant industry has felt like the movie “Groundhog Day.”
With indoor dining in the county prohibited in the first five months of the pandemic, Nye set up a grocery store in the middle of his restaurants and placed a heavy emphasis on take-out orders, just to survive financially.
“It was the worst. It felt like the end of the world,” said Nye, who oversees The Deck on Laguna Beach, and Driftwood Kitchen and Oyster Bar restaurants in Laguna Beach.
“It was like ‘Groundhog Day,’” Nye said, referring to the 1993 movie that stars Bill Murray, about a man who lives the same day over and over again. “You woke up every day and you saw the same show, with the same report and same dread and nothing got better ever. Then we got better and we got indoor dining with 25% [capacity in September] and this weight got lifted and we were heading into the right direction but now, here we go again.”
With Orange County on the cusp of moving backward from red to the state’s most restrictive purple tier under California’s coronavirus monitoring system, which means prohibiting indoor dining again, restaurateurs across the county are bracing for the possibility of a very long hard winter.
“This is awful for us to try and survive day-by-day,” said Bruno Serato, the owner and chef at The Anaheim White House in Anaheim. “All of the restaurateurs in Orange County are in limbo.”
As the weather cools and Thanksgiving and winter holidays approach, the number of coronavirus cases are increasing across the state, again. This week, California hit the 1 million COVID-19 case mark, and state health officials are warning that the number could further rise during the holiday season and the weather turning colder.
Earlier this week, several counties that had enjoyed limited business operations regressed to a more restrictive tier. San Diego, Sacramento, and Stanislaus County fell back from the red tier to purple.
If the number of coronavirus cases continues to rise in Orange County, Orange County could join them next week.
“We’re going to still be in the red tier tomorrow,” Orange County CEO Frank Kim told City News Service on Tuesday. “The data for next Tuesday, though, shows we’re right on the edge. Unless something changes, we risk the purple tier next Tuesday.”
Every Tuesday, state health officials assign each county a tier under the state’s four-tier color-coded system that monitors coronavirus cases. The county remains in a tier level for a minimum of three weeks and must meet the health metrics in the least restrictive tier for two consecutive weeks before it can advance to the next tier.
Each color-coded level – purple, red, orange, and yellow – lays out guidelines and allows for the reopening or expanding of certain non-essential businesses. Purple is the most restrictive, while yellow the least restrictive.
Orange County first moved from the purple tier to red in September. This meant specific business sectors that were closed or operating with some modifications could reopen or expand their operations.
Unlike the purple tier, which only allowed outdoor dining for restaurants, the red tier gave restaurants the ability to reopen indoor operations with 25% capacity. Gyms were closed in the purple tier and allowed to reopen at 10% indoor capacity in the red tier. Places of worship and indoor shopping malls were also allowed to increase capacity from 25% to 50% with the move.
But the threat of losing what little business they have with indoor operations has many retail property owners and restaurant owners worried.
The first time around, when the pandemic began and forced the closure of individual businesses and restaurants, at least there was the government’s U.S. Paycheck Protection Program to off-set some of the losses. Not this time around, Pizza Press founder and CEO Dara Malaki said.
“This is the worst time to do it,” Malaki said of closing indoor operations. “We’re going to be forced again to furlough or lay off employees right before Thanksgiving and right before Christmas with no federal aid in sight. We are already operating with one arm behind our backs but at least we had some federal aid. Now, we’ll be operating with both arms behind our backs and no aid.”
On Wednesday, the Orange County Restaurant Association notified its more than 800 members to start planning and preparing in case the county regresses next week.
“We messaged them yesterday,” said Pamela Waitt, the president of the Orange County Restaurant Association. “We don’t know what’s going to happen but we need to plan now. The holidays are usually the busiest times. From October to December, they are hosting dinner parties. This is the time for many of them to financially recoup some of their losses. That’s why this is so devastating.”
Waitt is pushing her members and other restaurant owners to start ordering outdoor heaters and tents and preparing a strong takeout menu.
“That’s all we can do,” Waitt said. “We’re pushing them to do more outdoor dining and take out. There are no answers. This is strange times.”
NewMark Merrill Cos. President and CEO Sandy Sigal, who oversees several retail centers across Southern California, said he has a gym tenant that recently reopened in Ventura and Orange counties and is facing the possibility of closing, again, both locations.
“What can we do?” Sigal said. “It’s heartbreaking. We’ll do what we can to support all of our tenants but we can only do so much. I have three Regal Cinemas. They’ve spent a lot of money to make it safe and have limited indoor operations. They can’t make money and you’re going to shut them down again. It’s awful.”
Nye, the owner of the Laguna Beach restaurants, has been working with his landlord to increase his restaurants’ outdoor offering. He’s ordered a tent and heaters to prepare for the colder months.
“We’re in a good place now with some of the original PPP money but if we have to close [indoor dining] and it stays like this until January, then everybody is going to need a new [federal aid] package,” Nye said. “There are a lot of bars and restaurants that are squeaking back and some [restaurants] still haven’t made it. We might see a lot of closures. It’s going to change the landscape of America.”
Serato, the owner of the Anaheim White House, has spent tens of thousands of dollars upgrading his restaurant’s indoor operations to make it safer for his customers. He has installed UV lighting and special filters in the HVAC units and created separate private rooms to prevent the spread of the coronavirus.
Still, he is frustrated with all of the investments to his indoor dining room, just to see it possibly close again by the state.
“What can we do?” Serato said. “I can spend $15,000 for a tent and heaters for outside dining. I can make $15,000 profit but it’s not easy.”
Serato said the pandemic had hit restaurants and the hospitality industry as a whole the hardest. Some restaurants are on the brink of bankruptcy.
“I don’t think restaurants are responsible for the spread of the coronavirus,” Serato said. “Let us run our own business. We know what we’re doing.”