’It’s the disaster of all disasters,’: Restaurants, shops struggle as pandemic spikes

After months of construction delays, Boca Raton's newest seafood restaurant, Copperfish Kitchen, finally was poised to open in March. The contemporary eatery, designed in deep ocean blues and warm woods, features a menu filled with delicacies, including an elegant shellfish tower and grilled octopus.

Then the coronavirus pandemic hit, and the restaurant's long-awaited opening was halted after Palm Beach County shut down indoor dining.

In May, when restrictions were lifted, Copperfish threw open its doors, and diners rushed in. In fact, for a few weeks into June, the restaurant hummed with business, owner George Anagnostou said.

But as the number of coronavirus cases has inched up in Palm Beach County, Anagnostou said business has plummeted. Diners are staying away because they are afraid of contracting the virus.

"It's the disaster of all disasters," Anagnostou said. "The minute the numbers started going back, business just dried out, and for the last three weeks it's been absolutely brutal."

Anagnostou isn't alone in seeing business fall off a cliff. Other restaurants and retailers say the rush of business that began in May has tapered off with the rise of coronavirus cases.

Faced with the prospect of a lingering pandemic lasting many more months, business owners are trying to figure out their next move.

Rodney Mayo of Subculture Restaurant and Nightclub Group said he's decided on a plan. If there are any more government restrictions imposed on dining, including curfews, "we are going to close everything down until January," he said.

"It's too hard on staff, and it's too expensive to buy commodities," Mayo added. "Nobody I know is breaking even."

Mayo operates several restaurants, including Dada in Delray Beach and Kapow! Noodle Bar locations in West Palm Beach and Boca Raton.

"Business was good until about two to three weeks ago, and then the numbers started skidding," Mayo said. "It's been getting worse and worse. Now it's miserable. I can't even find someone to go to dinner with me. Nobody wants to leave their house."

The first week of the May reopening also started off strong at Burt Rapoport's four Palm Beach County restaurants: Burt & Max's, Deck 84, Max's Grille and Prezzo.

"There was pent up demand," Rapoport said. "We were at 80%, then 90% of last year."

Although Rapoport could offer fewer tables, people were spending more money on food and buying better wine when they dined, he said. Along with a steady takeout business, the higher check averages helped boost revenues.

Then around July 4, when Palm Beach County shut down beaches to minimize the virus' spread, business started sliding, particularly at Deck 84 restaurant near the beach in Delray Beach.

Making matters worse: The summertime weather, which makes it difficult to seat guests at outside tables.

"This time of year, you've got the heat and the rain and the bugs," Rapoport said.

Rapoport said he has enough cash flow to last the end of the year, and he's even considering a fifth restaurant for a new concept if he can find a good deal. But he said he's also counting on no more shutdowns, and no hurricanes, either.

Some business owners, such as Anagnostou, say it might just be better to close down again during the slow summer and early fall months and hope for a strong winter season, when the virus' numbers might be lower.

"If they are going to shut down to mitigate it, they might as well do it sooner rather than later," Anagnostou said. "I'd hate to see this drag out and bleed into season."

Analysts and retail experts said the restaurateurs' concerns are valid. Reports of rising coronavirus cases "are killing restaurants," said Tom Prakas, a restaurant broker with the Prakas & Co. in Boca Raton.

The federal government's Paycheck Protection Program, which loaned money to small businesses, helped cushion the two-month shutdown earlier this year, business owners agree.

The PPP was a "godsend," said Bruce Simberg, partner in the Wine Room wine bar and restaurant in Delray Beach. The $375,000 loan helped him pay managers, hourly staff and rent.

"But nobody in their wildest dreams thought we'd still be going months later," added Bruce Corn, managing director at NAI/Merin Hunter Codman brokerage. "What happens now? People are becoming afraid to come into establishments, and you don't have any more PPP money to pay employees."

Congress is debating another rescue measure that could provide a fresh round of PPP funding. But the legislation, part of a broader financial bill, is not certain to pass.

Simberg said a new round of PPP can't come soon enough.

When the Wine Room reopened in May, customers returned, spent money, and tipped well. But in recent weeks, sales have declined by nearly half, and most of the business is limited to the weekends, Simberg said.

Sean Snaith, national economist and director of UCF's Institute for Economic Forecasting, said everything about this economic cycle is tied to public health measures.

If municipalities impose curfews or roll back business openings, consumer spending will once again be affected. But even if there are no rollbacks, "the fear factor is part of the story here," Snaith said.

Non-restaurant retailers are finding that staying open is expensive because of all the measures they must take to keep employees and customers safe.

For instance, gyms are having to take on added expenses to stay open, cutting into revenues, said Dominic Delgado, senior director of Cushman & Wakefield brokerage.

Delgado said some gyms are facing higher labor costs because they must hire more employees to hold more classes, to keep class sizes to the 50% limit. That higher overhead, in turn, is driving how much they will be able to pay in rent.

Meanwhile, other gyms are holding off on deals to open new locations while the pandemic continues, Delgado said.

Some stores are spending money on advanced cleaning measures to reassure customers. The Wellness Jar Medical Spa in North Palm Beach hired cleaners that use special antimicrobial products in common areas. They also installed special air filters in the air conditioning system, said co-owner Ellen Bauer.

The measures are helping bring business back to the Wellness Jar, which saw a big spike in pent-up demand for beauty services such as Botox and fillers only to see business fade when the virus cases started spiking.

"We've started to see it slowly pick up," Bauer said.

Other retailers say they are managing through the pandemic by continuing to limit the number of people in their stores. At Jennifer's Design Exchange, a designer consignment store in Palm Beach Gardens, "our reopen has been extremely cautious," said owner Jennifer Loiseau. Visits are by appointment only, which Loiseau said helps customers feel safe.

But to prepare for the long term, Loiseau also has poured resources into online sales. This includes making her Instagram account shoppable to viewers.

By allowing customers to shop from home and expect delivery of their purchases, "this has made the difference," Loiseau said.

As is usual during difficult economic times, only the strongest may survive, said Orin Rosenfeld, of Rosenfeld Realty Advisors in Boca Raton.

Mayo is one business owner trying to mitigate his risk.

He said he's delayed construction on two venues planned for Boca Raton's Mizner Park: Lost Weekend bar and Subculture Coffee shop.

"Nobody is in any rush," Mayo said.

Meanwhile, Todd Herbst, an owner of Big Time Restaurant Group, is counting on the design of his soon-to-open restaurant, Elisabetta's in West Palm Beach, to help this new location weather the virus.

Some 150 people will be able to sit outside and feel the Intracoastal Waterway breezes of the Flagler Drive restaurant, which is expected to open in November. Another 130 seats are indoor.

"What's great about this location, and what helps me sleep at night, is that we are opening a major restaurant in a major pandemic, and we have a tremendous amount of outdoor seating," Herbst said.

The goal is to open Elisabetta's in November, in time for the cooler weather months and the typical rise in seasonal visitors.

"I don't know if it's going to be a good season or a bad season, but it's still going to be season, and it will be better than the summer," Herbst said. "I'm going to grab as much season as possible."

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