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Eataly Secured a Small Business Coronavirus Relief Loan

Meanwhile, Potbelly is returning its $10M loan after the Treasury Department urged private companies to give the money back

eataly chicago
Eataly Chicago opened in 2013.
Marc Much/Eater Chicago

There was plenty of news over the weekend surrounding the federal government’s Payroll Protection Program (PPP), including the revelation that Eataly — the chain Italian megamarket with locations in LA, New York, Boston and in River North — applied successfully for the forgivable loans meant for small businesses. The company’s North America executive vice president Raffaele Piarulli on Thursday afternoon wrote an email (obtained by Eater Chicago) to all Eataly employees with the announcement.

President Trump has approved plans to replenish the program with $310 billion. PPP is part of the federal government’s emergency COVID-19 relief package approved in late March. By mid-April, the initial $349 billion in funds were depleted and small businesses, including restaurants, were frustrated as bigger companies like Potbelly Sandwiches and Sweetgreen had announced their successes in getting loans. PPP will relaunch Tuesday, with government officials vowing that this time small businesses will have a fair shot at funds. That’s good news for restaurant owners who have spent hours in the application process, filling out forms or on the phone with banks.

Applicants could ask for as much as $10 million. Eataly hasn’t shared how much money it asked for. The loan would allow Eataly to pay workers regular wages for eight weeks, according to Piarulli’s email. While Eataly’s quick-serve restaurants and bars have remain closed, the markets continued open during the pandemic, as grocery stores are considered essential under the state’s stay-at-home order. GrubStreet, which broke the news on Eataly and the PPP, reports the company told workers to quit their jobs if they wanted to collect state unemployment benefits which could provide workers with more money (Eataly workers confirmed this to Eater Chicago).

Eataly opened its Chicago location in 2013. The company split from co-founder Mario Batali last year, nearly two years after a series of sexual misconduct allegations against the celebrity chef. The Chicago location employs 400 to 550 people. One worker told Eater Chicago no one believes the location will reopen on June 8. That’s when Piarulli’s email states Eataly’s PPP funds would run out (and therefore when the company would stop paying its workers). Given that rationale, workers were struggling over the decision of whether to quit their jobs, the worker says.

The company provided the statement to media from an Eataly spokesperson:

“Our goal since the beginning of this crisis was to support our employees, approximately two thirds of whom have not had work following the closure of our restaurants. When the restaurant closures went into effect, we opted to furlough employees and continue to grant all benefits, including health insurance. These loans allow us to bring employees back on payroll and therefore maximize the support we can provide during these challenging times. This was the objective the program was designed to achieve.”

Over the weekend, the Treasury Department advised public companies that exploited loopholes to secure loans to give the money back. The law allowed chains to apply as long as it didn’t employ 500 workers at a given location. Potbelly, which was founded in Lincoln Park, announced it was giving back its $10 million loan (Earlier Sweetgreen did, too). Big chain restaurants aren’t the only business eating up funds that were targeted for small businesses.

The companies receiving loans, including Shake Shack, Ruth’s Chris Steak House, and LA’s Kura Sushi, highlight the inequalities in the program. Banks are usually looking out for longtime or wealthier clients, not new ones who they just were introduced to during the loan application process. That process is long and can be complicated. Banks are more likely to check in with big-name clients to ensure they properly complete applications. Smaller businesses won’t get the same attention. The New York Times reports banks prioritized bigger clients during the application process.

With those challenges in mind, on Friday a new social media video from the Independent Restaurant Coalition began circulating to implore elected officials to help independent restaurants. There are Spanish and English versions of the video, which is set to music and tap into the relationships restaurants have built with their customers. Kevin Boehm (Boka Restaurant Group), Diana Dávila (Mi Tocaya Antojeria), and Matthias Merges (Billy Sunday, Old Irving Brewing Co.) were among those who shared the video.

Meanwhile, Dávila says she secured a PPP loan for her acclaimed Logan Square Mexican restaurant. She says the $40,000 she received will keep her business open for four weeks. Mi Tocaya has been closed since the state ordered all dine-in restaurants and bars to cease operations on March 17. She’s furloughed all her 10 workers, but hopes to start up carryout soon when she’s figured out the safest way to reopen.

  • Eataly Received PPP Loans Designed for Small Businesses [GrubStreet]
  • Restaurants Shunned From U.S. Aid Program Could Get Second Chance With New $310 Billion Bill [ENY]
  • Independent Restaurants in Chicago Are Fighting for Survival [ECHI]
  • Eataly Finally Cuts Ties With Mario Batali [Eater]
  • Why We Decided to Return our PPP Loan [Sweetgreen via Medium]
  • Banks Gave Richest Clients ‘Concierge Treatment’ for Pandemic Aid [NY Times]
  • Kura Sushi Returns $6 Million Federal Loan Meant for Small Businesses After Public Outcry [ELA]
  • Ruth’s Chris to Repay Loan Amid Outcry Over Rescue Program [Wall Street Journal]
  • Potbelly [Twitter]
  • Independent Restaurant Coalition [Official Website]

And in other news...

  • After three years in Wicker Park, coffee shop and record store Purple Llama is permanently closed. The small and uniquely designed space debuted in 2017. Owners posted a letter on the door at 2140 W. Division Street thanking customers and sharing appreciation in leaving “a little stamp” on the community. The reason behind the closing wasn’t mentioned in the letter.
  • Tock, the reservation portal that features Alinea, Smyth, and other toney restaurants, now has a dive bar section. It’s not a robust selection, only Carol’s Pub in Uptown and Nisei Lounge in Wrigleyville, but it’s a departure for the site that requires customers to prepay for their reservations. During the pandemic, Tock has pivoted to carryout, and the aforementioned bars can sell alcohol (but not cocktails) to go. So “discover dive bar culinary experiences.” The Tamale Guy and packaged goods stores (some call them “slashies”) are probably the next to follow.
  • Speaking of Claudio Velez (the Tamale Guy) — the enterprising tamale chef who went bar to bar selling food out of a cooler: Apparently he’s selling tamales for preorder again in the West Loop. Velez, through coordination with the True West Loop Facebook group, sold pre-ordered tamales earlier in April, Block Club Chicago notes. Now they’re doing it again. However, someone has called the police with a complaint over the operation, according to organizer Moshe Tamssot. It’s unclear what the complaint was over. Photos of the first event showed proper social distancing as customers stood apart from each other in line. Perhaps there’s another health-related concern.
  • In Roscoe Village, the owners of John’s Place are joining the ranks of others in the industry in feeding health care workers. Earlier this month, it launched a program collecting donations which have turned into 300 meals so far. This is a way for owners John and Lynn Manilow to keep their doors open during the pandemic. Much like Virtue in Hyde Park, John’s Place is helping nearby hospitals including Advocate Illinois Masonic, Weiss, Swedish Covenant, and Evanston hospitals.

Virtue

1462 E. 53rd Street, Chicago, IL

Smyth

177 North Ada Street, , IL 60607 (773) 913-3773 Visit Website

Dive Bar

3445 N Halsted St, Chicago, IL 60657 (773) 770-4618 Visit Website

Boka Restaurant Group

820 West Lake Street, , IL 60607 (312) 238-9896 Visit Website

sweetgreen

1303 Westheimer Road, , TX 77006 (832) 720-6500 Visit Website

Alinea

1723 North Halsted Street, , IL 60614 Visit Website

Old Irving Brewing Co.

4419 West Montrose Avenue, , IL 60641 (773) 916-6421 Visit Website

Shake Shack

332 North Garden, , MN 55425 (952) 466-6056 Visit Website

Billy Sunday

3143 West Logan Boulevard, , IL 60647 (773) 661-2485 Visit Website

Nisei Lounge

3439 North Sheffield Avenue, , IL 60657 (773) 525-0557 Visit Website

Mi Tocaya Antojeria

2800 W Logan blvd, Chicago, IL 60647 (872) 315-3947 Visit Website

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