Asheville chef Katie Button, of Cúrate and Button & Co. Bagels restaurants. Katie Button says that, during this ongoing coronavirus outbreak, “everything that we have built and created is basically all thrown out.”/photo by Evan Sung Photography

Note: AVL Watchdog is a new non-profit news team producing stories that matter to Asheville and Buncombe County.

By Sally Kestin, AVL Watchdog

Asheville’s celebrity chef Katie Button describes the challenges and stark realities facing her industry and business since closing her renown restaurants Cúrate and Button & Co. Bagels on March 16. Button has been particularly outspoken in her continued calls for federal aid specifically targeting independent restaurants, noting that the current coronavirus relief packages don’t work for indy restaurants. She’s asking supporters to to to saverestaurants.com and sign a petition to that effect. Katie Button, as told to Sally Kestin:

It’s really surreal, and I think that on a day-to-day basis I feel differently about it, whether that’s sadness or anger or hope. We have spent the past nine years working really hard to create a restaurant and hospitality group that functioned, that was able to support a team of 140 employees, was able to offer that team unprecedented benefits like novel ideas around health insurance and direct primary care and paid time off and sick days and wages that were a living wage to everybody. It felt so good to be able to have a business that was operating, that was generating enough revenue that allowed us to explore other new businesses like the bagel shop and an events space.

The scary thing now is that all of that is in jeopardy, everything that we have built and created is basically all thrown out, and we have to start all over again.

We had to lay everybody off, every single person from the top to the bottom. This is something that the public can be a little bit confused about because it can seem, it’s like well, why can’t they float and pay their payroll until they’re able to reopen? Restaurants are not meant to operate, they cannot operate with zero revenue coming in. There’s a small profit margin. A lot of dollars might come and flow into our spaces but 90 percent of those flow right back out to vendors, farmers, staff. We’re not sitting on dollars or money that floats us. Nobody is.

If we were going through a normal recession, we would see a decline and decrease in sales and people coming in, and we would adjust that by reducing our food costs and labor. When it comes to a stop, what’s happened is you’re left with all the bills from all the costs of goods and vendors that you’ve already purchased, that are sitting in your walk-in, that you cannot sell and an entire payroll. Most restaurants had to then work very quickly to stop all outflow of money. We were doing things like canceling our company credit cards to avoid reoccurring software fees. You’re calling your subscription services.

You pay for something called business interruption insurance, and that’s because you know that running a restaurant that there’s no way you can survive a day without revenue coming in. So, if a hurricane or other major natural disaster came in and ended business that abruptly, you would be covered. The insurance does not cover pandemics. It’s an exception in their clause.

The SBA (Small Business Administration) has deferred some of our loans that we’ve had with them for six months, which is great. Our bank is working with us. It’s a little bit challenging. While we can get our mortgage deferred, there’s some loans and things that they’re willing to defer interest but not principal. If we defer these things, how long will we have to pay them back?

Everybody’s saying to enroll in Paycheck Protection Program, which is through the CARES (Coronavirus Aid, Relief and Economic Security) Act. You get an 8-week loan forgiveness so if you use those expenses on payroll, utilities and rent, you don’t have to pay back those portions of those loans, which is great. Then I get this, which requires me to bring back my employees and pay them over this 8-week period, there’s a large section of this time where they will not be able to work. When the government goes out and says that they feel comfortable for the public to go eat out in restaurants and bars, that’s when this Paycheck Protection Program should be applicable for restaurants. Because before that, it doesn’t make any sense and it doesn’t help. It’s like, I can hire all my teams back but then what, in eight weeks I have to lay them all off again and close?

Worst case scenario is that we end up saddled with so much debt and monthly debt payments that are due, without enough revenue coming in to be able to afford the debt service and the cost of labor and goods to make the whole equation happen, that we would have to shut it all down and file for bankruptcy. I mean that is worst case scenario.

To be honest, if we don’t get the right help on our loans from our banks and lenders, we won’t be able to pay our bills and we will be in default of our loans, and that’s when it all crumbles. That is the fear. And even though we’re thinking of creative ways when we come back up to create alternative lines of revenue, whether that’s delivery or takeout or online ordering of products, or getting to grocery stores certain products, the reality is that the equation has been entirely messed up.

On a scale of one to 10, like extremely worried is a 10, and one’s not worried at all, I’m a very optimistic person but I’m probably feeling in the seven or eight range of amount of worry. I don’t think there is a single restaurant owner out there in the world that is not scared of losing everything.

If you let your mind spend too much time in the worst case scenario, then you’re kind of crippled in action and all that we can do is do our best to react and adjust, but we’re all going to be facing those conversations and questions and realities at a variety of different points along this journey. It’s frustrating to have created something that worked and the whole cycle it supported, the businesses, the community, the employees, and then to have it all just erased is really scary and frustrating.

I don’t know how many restaurants in Asheville are going to make it or not make it. The grim truth is that I don’t know. Everybody’s going to be talking very seriously about what changes do we have to make to survive and then we can set at rebuilding back to where we were before this happened? But it’s going to be a longer-term plan.

It is about making it a year, which is a long time. But I’m feeling like tourism and people traveling and really feeling comfortable eating out again is going to take until there’s a vaccine. I think until then, hopefully healthy people are eating out and supporting our local economy and businesses so that we can be there to see the next day. As business owners, what we have to do is look at how do we survive until next year, through whatever waves are coming our way.

The world looks very different, and I think that it will for awhile. It’s not going to be an instant comeback and everybody’s out and about and celebrating. I think it’s going to take us time, and I don’t know what that means for the restaurant industry.

Independent restaurants, we are separate, we are diverse. Yes, we employ 11 million people in this country, but we don’t have a unified voice. We have nobody in Washington looking out for our success or best interests. There is a group called the Independent Restaurant Coalition, which has a website saverestaurants.com, and I encourage anybody to follow them and support and sign the letters that they’re creating, but we don’t have as loud of a voice as the airline industry, the cruise industry. We feel very much like we are left alone to figure this thing out and that it could cripple a very large percentage of independent restaurants.

I think that we need to not be quiet about our potential failure. This is nobody’s fault. It’s nothing to be embarrassed about and in the months to come, there may be a day where I have to sit and face some very dark realities.

I’m a person who likes to act and move, so I’m thinking what are the possible revenue streams? If when we reopen, people aren’t dining out, what can we do? How much revenue are we doing and do we need to decide to channel our efforts and I don’t know go different routes of business or eliminate some lines of business? We were working on opening an events space. That kind of doesn’t feel like a good thing to be focusing on right now. How many events are we going to be booking this year?

When we first made the decision to close our restaurants, it was devastating, and we felt like the future was unclear. Then I went through a period of time where I was feeling pretty good about the aid that was coming our way through the CARES Act and we were starting to feel more positive and we were planning and talking, and now that the reality of applying for the CARES Act is here, we’re seeing all the holes and how it doesn’t fit our business and how it’s not really supporting independent restaurants, and so you’re back in that place where you don’t know and you’re scared and confused, and it’s kind of this crazy rollercoaster. I’m trying to think, what do I know today, and am I doing everything I can today? Tomorrow is going to be a different day.

AVL Watchdog is a nonprofit news team producing stories that matter to Asheville and Buncombe County. Sally Kestin is a Pulitzer Prize-winning investigative reporter.

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