Amid New Restrictions, Hospitality Industry Calls for Financial Relief
Blue Plate Restaurant Co.’s Mercury Dining Room and Rail in downtown Minneapolis. Photo by Caitlin Abrams

Amid New Restrictions, Hospitality Industry Calls for Financial Relief

In a letter to Gov. Walz, industry leaders call for emergency funding, sales tax holidays, property tax reductions, and a cap on third-party delivery fees.

Leaders of the state’s hospitality industry are appealing to Gov. Tim Walz, calling for a $200 million emergency grant fund and other measures to help businesses “already on the financial precipice” due to the Covid-19 pandemic and government shutdowns.

On Wednesday, Walz announced new restrictions in response to the accelerating rate of Covid cases in the state. Under the latest executive order, in-person dining is banned again. Restaurants and bars can only offer takeout or delivery service. Entertainment venues and event spaces are mandated to close. The new rules go into effect at 11:59 pm on Friday, and they’ll remain in effect until Dec. 18.

Walz first shuttered bars and restaurants in a mid-March executive order.

In a three-page letter to Walz, hospitality industry leaders outline the dire conditions that many bar, restaurant, and hotel operators face. The letter is signed by Liz Rammer, president and CEO of Hospitality Minnesota; Tony Chesak, executive director of the Minnesota Licensed Beverage Association; Lauren Bennett McGinty, executive director of the Minnesota Craft Brewers Guild; and Maari Cedar James, co-founder of the Minnesota Events Coalition.

“Through no fault of their own, now over half of all Minnesota restaurants face permanent closure (and 33% of hospitality firms broadly),” they wrote. “Yesterday the American Hotel and Lodging Association projected that 77 percent of hotels will close without action.”

Beyond calls for the creation of a $200 million emergency grant fund, the letter details seven other proposed steps that could be taken to help the hospitality industry:

  • Expand the No-Interest Loan Program from the Minnesota Department of Employment and Economic Development (DEED): This would make additional $100,000 loans available with a three-year payback term for struggling hospitality businesses.
  • Targeted Sales Tax Forgiveness: Creating a temporary sales tax “holiday” and not requiring businesses to make these payments to the state for the next six months.
  • Targeted Property Tax Reductions: Allowing for property tax reductions in line with the drop in sales that a business has experienced.
  • Waive State and Regulatory Fees: These would be waived for distressed hospitality businesses in 2020 and 2021. This would include liquor, food and lodging licenses.
  • Freeze Commercial Evictions on Hospitality Tenants: This would echo measures taken for residential tenants and encourage landlords to negotiate with tenants facing challenges.
  • Temporarily Cap Third-Party Delivery Fees at 15 Percent: This would cap steeper fees from companies like Bite Squad and Door Dash, which cut into restaurant profits.
  • Create a State Tax Credit for Food Donations: Many hospitality operators are stuck with inventory now that they will likely have to donate. A tax credit could help soften the blow.

Hospitality industry leaders are stressing the need for urgent action, given that it’s unclear if or when a second federal relief package will materialize.

Measures taken last spring — including the creation of the Paycheck Protection Program (PPP), which provided loans to small businesses — were originally implemented with the idea that the pandemic economic crisis would only last for six to eight weeks.

Minnesota lawmakers are set to meet in a special session in December, which would be the seventh special session since the pandemic began.

Meanwhile, the Minnesota Chamber of Commerce is lobbying for similar relief measures at the state and federal level. In an interview Friday morning, the chamber’s president Doug Loon said his organization will work with Minnesota’s congressional delegation to push for more financial relief from the federal government. Like Hospitality Minnesota, the chamber will seek property tax relief, too. Loon said he’s aiming to ask for permission to delay payments for property taxes.

“Without relief, we fear that many businesses will not survive this round of closures,” Loon said.

Loon noted that the chamber also was in the process of clarifying the governor’s latest executive order for members. But he’s hopeful that the “pause” will have a definite termination date in late December.

“There’s a date on the horizon when this latest round of closures of businesses will end,” Loon said, adding that he’ll continue to find ways to support businesses that have been adversely affected in the meantime. It’s worth noting, of course, that the Dec. 18 end date is far from certain; the governor’s earlier restrictions in spring were extended multiple times.

Mpls. St. Paul magazine is keeping a running list of restaurants that have closed permanently since the onset of the pandemic. The list of casualties includes many well-known, long-standing favorites such as Bachelor Farmer in North Loop, Butcher & the Boar in downtown Minneapolis, and Chino Latino in Uptown.

Stephanie March, Mpls. St. Paul’s food and dining editor, weighed in on the immediate aftermath of the latest shutdown and what it means for bars and restaurants.

Digital Editor Dan Niepow contributed to this report.