Since opening a tasting room in the Funkzone in 2008 as a part of Kunin Wines, Magan Eng has grown her business through financial crises, fires, mudslides, and the sudden death of her husband, Seth Kunin, two years ago.
“All of which were great challenges,” Ms. Eng told the Santa Barbara City Council at its Tuesday meeting. “But during all that time I never faced such a seemingly significant challenge to the life of my business as the one I faced today.”
On Monday, Ms. Eng and other restaurants, wine tasting rooms, and bars voluntarily closed their doors amid the coronavirus pandemic, feeling it was their responsibility to the public and their employees.
The next day, state officials and city leaders affirmed their actions.
In a move that has put many businesses in Santa Barbara in a dangerous position compounded by uncertainty, all bars, nightclubs, pubs, wineries and breweries throughout the county have been ordered to close.
“We’re scared. Business has stopped,” said David Porter, owner of Municipal Winemakers and the Potek Winery and Muni Wine tasting rooms in downtown Santa Barbara.
“One month is feasible, which we learned from the Thomas Fire, but three months without revenue is probably impossible.”
Already businesses have had to lay off staff to cope with loss of business and the potential for the shut down to last well into April.
At Kunin wines, Ms. Eng had to let go of her entire tasting room staff.
Julia Mayer, who has run Dune Coffee Roasters with her husband, Todd Stewart, for the past 11 years, said she has had to lay off half of the coffee shop’s 52 employees.
Sherry Villanueva is the owner of Acme Hospitality, which operates restaurants, bakeries, and wine bars downtown including Paradise Cafe, Loquita, The Lark, Tyger Tyger and Lucky Penny.
During Tuesday’s city council meeting, Ms. Villanueva, was on the verge of tears explaining what she has had to do in the face of the COVID-19 pandemic.
“I had the horrible job of laying off 350 people,” said Ms. Villanueva, “some of whom work two full-time jobs to live in this county, many of whom are primary breadwinners for their family. They are hourly employees. They are dependent on their jobs in my restaurants.”
Ms. Villanueva said one of her main concerns is medical insurance. Acme Hospitality insures all of its employees, but with no revenue coming in to their eight different restaurants, Ms. Villanueva sees the writing on the wall.
“The idea of employees having no medical insurance during a global pandemic is really a very weighty idea to keep you up at night,” said Ms. Villanueva.
Acme Hospitality will continue to cover benefits through April 1, but simply cannot afford to pay for medical insurance with no revenue.
While unemployment benefits are available, they only cover a fraction of what a typical income would be, said Ms. Villanueva.
“You’re talking about families who live paycheck to paycheck. They are desperately trying to stay in Santa Barbara County, to work in Santa Barbara County, send their children to school here. They can’t live on a fraction of their paycheck,” said Ms. Villanueva.
Declarations of emergency and orders to close up shop have helped those businesses that preemptively shut down by giving them leverage for insurance claims.
However, while many businesses pay for business-interruption insurance to protect themselves from various disasters, many policies include clauses that specifically exempt a viral pandemic.
The order to close will last until April 7, but Ms. Eng told the News-Press that businesses are looking past that date to find smart moves to stay afloat.
“We can look at China. We can look at Italy. We can look at other places that are ahead of us and see how things have panned out there,” said Ms. Eng.
“You have to ask yourself, ‘Do I have three months? What does my business look like three months from now? What are the first steps that I can do to secure my business so that I can reopen, so that I will be one of those people that will survive this?’”
Kunin Wines’ business model is heavily reliant on direct to consumer sales, said Ms. Eng.
“We have a subscription, and how do we meet the people who subscribe to our winery? They walk into our tasting room and we serve people over the counter. We send wine to people across the country, but it was very much a Santa Barbara-based business that was based out of our tasting rooms,” said Ms. Eng.
As closures have been ordered around the country, cities like Santa Barbara have allowed restaurants to continue to offer delivery and curbside take-out, but Ms. Eng said this will not work for everyone.
“At the end of the day you lose money doing it. You just can’t make enough. The hospitality model doesn’t really flow that way,” said Ms. Eng.
“A lot of restaurants will make their money on the wine and liquor that they sell, but that’s harder to do when you’re running hamburgers out to someone’s car.”
A primary concern for many of Santa Barbara’s local businesses affected by the closure order is, of course, rent. Revenue may not be coming in, but bills are still due.
“We still don’t really have any real answers from our landlords yet on if we can come to an agreement we can live with should this last one month, three months, six months, nine months,” said Ms. Eng.
Ms. Eng and other businesses owners plan on attending the city council meeting this Tuesday, where the council will vote on an eviction protection for tenants ordinance.
“Everyone needs help. This is uncharted waters for everyone,” said Ms. Eng.
“It’s mind blowing to try and think about it because there’s no industry that’s really kind of bullet proof here.”