Shared experiences from the hardy folks who followed their dreams and opened restaurants during the pandemic
By Matthew Lardie | Photography by John Michael Simpson
Opening a restaurant is an inherently risky prospect at any point – razor-thin margins combined with labor, product and real estate costs make it a business that is certainly not cut out for those looking to make a quick buck. But opening a restaurant in a pandemic? Well, there isn’t data yet on how that goes, but suffice it to say, it is not easy. Durham, like cities and towns across the nation, lost beloved restaurants and bars over the past two years, but many have been able to hang on. Rarer though are those who’ve actually opened new establishments during the pandemic. How did they do it? Well, we decided to ask.
Durham Distillery Founder and CEO Melissa Katrincic opened Corpse Reviver Bar & Lounge on Oct. 15, 2020, about five months later than initially planned. Construction on the bar was slated to be nearly finished by April, but as the state went into lockdown, Katrincic slow-rolled the remaining projects as she waited to see what, if anything, she could do about opening.
Corpse Reviver was in a better financial situation than other bars, with funding for the project coming partially from distillery revenues and also from a previous investment that beverage giant Constellation had made in the brand. Still, due to the wording of the legislation Congress passed when creating the Paycheck Protection Program (PPP), Durham Distillery and Corpse Reviver were now considered a subsidiary of Constellation and therefore ineligible for any direct emergency funding.
Katrincic was able to secure a $25,000 Economic Injury Disaster Loan from the U.S. Small Business Administration, but a subsequent loan increase application she submitted in October 2021 has languished in the pipeline.
“We’ve been waiting in limbo for the EIDL increase loan, which was approved,” she said. “We have yet to have a loan officer assigned.”
Even after she had Sen. Richard Burr’s office intervene, Katrincic said she had no idea about the status of the loan increase. “Can you imagine signing loan documents and not getting funded for more than 90 days?” she asked incredulously. “I’m just afraid that we’re in some sort of tunnel with it, and we’re never going to get out of it.”
“We blew through that by June,” Gross said. “Then we got the second round, which was great, but we blew through that in 2020 as well. Thank goodness for that money though, it kept us going.”
Gross, like restaurant owners across the nation, had to quickly adjust expectations with Solera, switching concepts to provide chef-driven burritos through the takeout window of the building, which was previously a Chick-fil-A. Solera is now open for indoor dining, and the burritos have been a hit with customers, so are likely here to stay, but that doesn’t mean things are completely rosy. Gross was determined to keep his staff employed throughout the pandemic, which has meant running on financial fumes.
“All of the cash for Solera is gone,” he said frankly. “All of my starting capital. We burned through, literally, close to $1 million in cash.”
Gross was unable to get funding through the SBA’s more recent Restaurant Revitalization Fund. “I’m really upset about that,” he said. “We literally set up a command center with two people waiting for [the application] to open. We were on it, [and] within 23 minutes, I had everything completed and got it in.
“We didn’t hear for a while,” he continued, “and then we start reading that the funds are gone.
“We are going to run out of cash. We’re going to be on fumes if we don’t get something soon,” Gross said.
J. Lights Market & Cafe owner Jared Burton has also struggled to stay afloat. This is the first restaurant for Burton, and because he had no previous payroll data, he was ineligible for a PPP loan. His regular business loan through the SBA also got tangled up in the pandemic.
“I had been in discussion with Pinnacle Financial Partners for the SBA loan,” Burton recalled. “My bank called me probably two or three days before we were supposed to close on the loan [in April 2020] to say they were freezing everything to focus on PPP loans.
“At that point I had no idea what to do. I spoke to my banker, and he just had no answers.”
Burton was able to close on his loan four months later, and J. Lights opened in fall 2020. Burton was then able to generate revenue, but his financial woes were far from over.
“We did not qualify for any federal funds,” he said. “I talked to everybody, I looked at grants. I was doing anything and everything I possibly could to find [funding].”
Burton was lucky enough to qualify for RRF assistance in April 2021, but in the intervening months he had to go as far as liquidating his own 401(k) in order to keep the lights at J. Lights on and his doors open. “If we hadn’t gotten [RRF], we wouldn’t be here today,” he said.
Chef Matt Kelly has been in perhaps one of the most unique positions of any Durham restaurateur. He had to close Saint James Seafood after the tragic 2019 gas explosion and, in a cruel twist of fate, was able to reopen the restaurant just 39 days before the governor’s stay-at-home order was issued in early 2020. He pivoted to takeout, like many others, and opened Jimmy’s Dockside later that summer in an effort to keep his staff employed. In fact, it was only to keep his staff employed, a condition of the PPP loans. Jimmy’s Dockside quite literally made no money; Kelly estimated that he lost anywhere from $32,000 to $40,000 a month doing to-go orders.
Financing was far from the only problem the four faced– there has been no escaping the price increases and supply chain issues that have made global headlines. “If we can get it, it’s more expensive,” Gross explained. “There’s cheeses we can’t get right now that are core items normally. There are constant shortages.”
Katrincic gave an example of similar struggles. Durham Distillery’s flagship Conniption Gin has to switch to different bottles in North Carolina for two months because she is unable to source the bottles they usually use. “Literally there is no bottle left of our glass in this country,” she said. “We put in a purchase order for 60,000 bottles in October that were supposed to arrive this month, but were told in December that the factory couldn’t do it. We paid $3,000 in freight on the previous glass shipment last fall, when usually it’s $1,200,” she continued. “The cost of the bottle alone has gone up 20%-25%.”
All four owners also emphasized that keeping their staff employed was one of the main factors that continued to motivate them to navigate the treacherous financial waters of the pandemic. Katrincic, Gross and Burton all pay far more than the average restaurant wage to their workers, and managers at Kelly’s restaurants average a $70,000 yearly salary. They had to get creative in how they kept their employees working during a time when they couldn’t serve customers. Gross had the to-go window at Solera, and Katrincic was able to shift Corpse Reviver employees to the distillery upstairs.
Despite the setbacks and difficulties, all four are determined to keep pushing forward with the same drive and determination that they’ve shown these past two years. The omicron variant has thrown another twist at them (Kelly noted that his restaurants had more than 1,000 reservation cancellations in the week following Christmas), and the future of federal assistance is unclear, but that isn’t stopping them.
“It’s been a year,” Burton laughed. “I’ve grown up more. I look forward to a time where everything isn’t a Rubik’s Cube that someone handed you and told you that you have 30 seconds to figure it out.”
“We have to move forward,” Gross said. “We have put our lives on hold for over two years. My plan for 2022 so far is just to move forward, do the best we can and do the things that make us happy. The chefs need projects. They need to feel like they’re cooking, like they’re creating. If the numbers are diminished, so be it.”