The deal that saved San Francisco restaurants

For bakers in the United States, there are two major holidays: Thanksgiving and March 14. aka Pi Day. So it was a blow to San Francisco’s Three Babes Bakeshop when pandemic-related cancellations started rolling in last March. While the Bay Area was closed, large corporate customers like Google canceled orders. That month, owner Lenore Estrada laid off most of her staff and shelved plans to open the company’s first storefront.

Estrada’s experience was typical. In late April, according to the Golden Gate Restaurant Association, only about 17% of San Francisco’s 3,900 restaurants were operating. Between March and August, the San Francisco Chamber of Commerce estimated that business in the city’s restaurant industry fell 91%.

For restaurateurs and food producers, the first months of quarantine were particularly difficult. No one knew when a full reopening might take place, and many restaurants closed to wait. But when it became clear the shutdown was going to be longer than expected, many realized what they needed were new avenues of income until a full reopening – avenues currently being forged by the SF New Deal.

Founded a year ago by Estrada, who is now the organization’s executive director, the SF New Deal provides monthly contracts to its partner restaurants to cook meals for underserved populations. As of February 2021, over 160 restaurants have participated in the SF New Deal, collectively earning over $16 million over 11 months. In contrast, government efforts like the Paycheck Protection Program, while helpful for those who could access it, were not designed to give restaurants a way to continue selling food, only to keep their employees on the payroll. In surveys conducted in May and September by the SF New Deal, only 77% of their restaurant partners said they had received a PPP loan. Some, like New Harmony and Twisted St. Cafe, didn’t qualify because they had just opened that year and couldn’t prove lost revenue. Others, like West African nightlife hub Little Baobab, were ineligible due to past legal complications.

“When the first round of funding (PPP) ran out, I don’t even think I had been allowed to apply yet,” Estrada recalls. “There was a lot of outrage because all the biggest companies got P3s and sucked up all the money, and no one else got any.”

As Estrada struggled to find a way forward for Three Babes, Emmett Shear, a college friend and CEO of live-streaming platform Twitch, asked him if he could help small businesses like his. , pledging $1 million to the as yet unnamed project. Another friend and longtime seasonal employee, Jacob Bindman, also offered to help, so Estrada brought him in to co-found the SF New Deal. By March 23, barely a week after San Francisco went into lockdown, they had incorporated as a nonprofit and signed their first restaurant partners. The terms of those initial contracts were simple: they paid restaurants $10 per plate for as many meals as they could prepare, and delivered those meals to food insecure people.

The timing was perfect: Organizations such as the African-American Faith-Based Coalition — accustomed to providing meals to their constituents twice a week — faced more demand than they could meet. Knowing that these community organizations “already had the infrastructure in place” to distribute the meals was critical, Bindman says, because it allowed the SF New Deal to distribute meals quickly and in volume, and sign up more restaurants.

Another key helper came from self-driving vehicle company Cruise, which donated deliveries, moving hundreds of meals from participating restaurants to community organizers. By the end of March, the SF New Deal had more than 30 restaurants signed up. By the time they released their October impact report, they had 111 and served more than a million meals. While each restaurant operator has had to figure out how to maintain physical distancing recommendations, most reported being able to rehire about 20% of previously laid off workers. Others, like Little Baobab, were able to retain almost all of their staff from the outset.

“Our first marker of success was that a third of jobs (for our partner restaurants) were secure through the program.” notes Bindman.

When Little Baobab first signed the SF New Deal in late March, owner Marco Senghor estimates they were cooking 500-700 meals a week. “SF New Deal was 90% of our revenue,” he says. Now able to operate the take-out restaurant part-time, he reduced their involvement to around 250 meals a week, generating an additional monthly income of $10,000 – a huge relief for Senghor who originally thought he should close forever. This flexibility regarding the level of participation is part of the SF New Deal by design. Restaurants can choose what works for them economically at any time, or opt out of it altogether once they stabilize.

Currently managing four different programs with four distinct funding streams, the SF New Deal primarily acts as a liaison and project manager, requesting and channeling federal, state, and local relief funds to its participants. Using what Estrada calls “collective power”, he is able to secure government contracts for mass supply that would otherwise be beyond the reach of individual companies. For example, the Great Plates Delivered program is a collaboration between the SF New Deal and the San Francisco Department of Disability and Aging Services, and funded in part by federal relief funds from FEMA that are renewed on a monthly basis.

Depending on the program a restaurant enrolls in, they can expect to earn between $3,000 and $6,000 per week. Overall, according to the SF New Deal Impact Report, 48% of participating restaurants said 50-100% of their revenue came from their SF New Deal contracts — and only one restaurant had closed permanently. Another less quantifiable benefit of the program is the community care it provides. As Chelsea Hung of Chinatown, the stalwart Washington Bakery, points out, participation in the program directly benefits not only their staff and meal recipients, but also the many neighborhood vendors they work with. Additionally, since they primarily feed the elderly in their own backyards, they are able to provide them with culturally appropriate meals rather than generic government dishes.

When asked how the SF New Deal could serve as a model for other cities to replicate, Estrada points out that listening to and working directly with affected communities has helped them develop flexible programs to meet a diversity of needs. . She also notes that by acquiring private donations, particularly Shear’s first million dollars, they were able to get started faster than local or federal government, proving that grassroots self-help is not only doable, but scalable.

“The global energy is to believe that we shouldn’t just accept the standards that we currently accept,” she says. “Just say, ‘Hey, I think we can do better than that,’ and then achieve it.”

EDITOR’S NOTE: This story was originally published in Reasons to Be Cheerful and appears here as part of the SoJo Exchange of the Solutions Journalism networka nonprofit organization dedicated to rigorous reporting on responses to social issues.