He was on the phone Sunday talking to restaurant colleagues, consulting with industry mentors, and reading the tea leaves about COVID-19. It had been a busy weekend. Two confirmed cases of the coronavirus on Cape Cod, schools closed; it was already real. It was getting close.
JB Blau, owner of four Island restaurants — Copper Wok, two Sharky’s Cantinas, and MV Chowder Co. — was trying to figure out his next move. He polled his followers on Facebook.
“At 5:55, I hung up from my last call and had decided it was time to close the dining rooms,” Blau said. “Then at 6:15 I watched Gov. Baker and he took me off the hook to make a decision that was going to be hard to explain to staff. It was a tough moment.”
The governor shut down all restaurants and bars effective Tuesday. They can still do takeout.
“It was a kick in the gut for everybody,” he said. “Monday was maybe the most interesting convoluted day in the history of our business.”
On Monday, Blau made another difficult decision. He laid off 75 employees so they could collect unemployment. He’s offering them free meals. He’s taking out a loan and offering interest-free loans to those employees who need them. He’s pretty sure his 20-something and under employees who can go home to live with parents will be fine. As will the retirees who work at his restaurants to stay active. But the bulk of his employees — those in their 30s to 50s — are facing difficult times ahead.
“My family and I should receive zero percent sympathy from anyone on-Island,” Blau said. “My staff, many of them, live check to check. The industry is check to check. It’s tenuous for them.”
In the coming days he will have individual phone conversations with each employee. He’ll advise them not to pay their utility bills (the state has said they can’t be shut off), and he’ll offer them interest-free loans if they’re in need. He’s also lined up some part-time job opportunities for some of them.
Blau said his restaurants will be able to endure this, but he’s worried about his friends and colleagues in the business, as well as other small business owners on the Island. He predicts as many as 25 percent won’t be able to weather it.
He’s offering takeout at his restaurants, but at some point restaurants will have to decide if that’s profitable enough to keep doing it. Many restaurants aren’t set up to do volume takeout; they do it to complement their services. The profit margin, 3 to 10 percent, largely comes from dine-in and drinking.
“Most restaurants have minimal rainy day funds,” he said. “We’ve noticed in the last two or three years, the cost between insurances, minimum wage, food costs and paper costs going up … they really take their toll.” He said while Island businesses like his look robust after a summer, people don’t realize how much those months mean to them. “I’m one hurricane away from being out of business,” he said.
That $10 million assistance for small businesses Gov. Baker has touted? The fine print says a business must show it’s been profitable as of March 10, something no Island business will be able to demonstrate — particularly year-round restaurants. He’s asked state Rep. Dylan Fernandes, D-Falmouth, to look into that. “Does that mean because we’ve been losing money since September to stay open, does that mean we don’t qualify?” Blau said.
Fernandes said he spoke with the administration and they made it clear that Cape and Islands businesses are eligible to apply and their circumstances will be taken into consideration. “I think it’s a valid enough concern to seek clarity on it,” he said, noting the March 10 date was more to make sure that startups aren’t trying to use the funds to get their businesses off the ground.
Fernandes said he is also urging the governor’s office to seek a federal disaster declaration for Dukes County so businesses can apply for loans. “We are in uncharted territory. The state is taking this issue very seriously and as the situation evolves, a lot more action will be needed to address the various issues that arise,” Fernandes wrote in an email to Cape and Island business owners.
Even if businesses survive, Blau wonders where all the employees will come from and will the tourists return. Those are big unanswered questions.
Anyone who knows Blau knows he’s a hopeful, optimistic guy. The glass is always half full. When he bet against Tom Brady and the Patriots winning the Super Bowl in 2019 and had to swallow paying out to his customers, he took it in good cheer.
“We’re going to make it through this,” he said. “We’ve put ourselves in a position where we can get through this.”
