City Eateries Feel Vax Mandate’s Bite
“We are burning cash.”
Those are the words of the leaders of two of the Twin Cities’ most prominent restaurant companies as they absorb the impacts of the first half-month of the Minneapolis and St. Paul vaccination mandates. Specifically, they say their suburban operations are having a typical mid-winter, while their city restaurants are bleeding customers.
January is a notoriously slow month in the restaurant business, it’s been unseasonably cold, and the latest Covid wave took hold as winter dawned. But Parasole Restaurant Holdings and Blue Plate Restaurant Group, with city and suburban operations, offer a useful control group to measure impacts.
Parasole COO Donna Fahs says the company’s Manny’s Steakhouse in downtown Minneapolis lost 250 reservations on the day the city mandate was announced, and its revenues since then are one-third of normal. “It’s a bloodbath,” she noted, “shocking.” Parasole’s suburban steakhouses, known as Pittsburgh Blue, with locations in Edina and Maple Grove, are running at plan or better, she says.
“It’s hurting [Manny’s] staff morale and I’m worried about keeping our best employees,” Fahs said. Manny’s has historically been in the top five of Twin Cities restaurants from a revenue standpoint. As a destination restaurant, it attracts diners from all over the metro and out-of-town visitors. Fahs believes most of the cancellations are due to the vaccine mandate, not the mask requirement: “Many of our large parties will have one person who is unvaccinated and we lose the entire booking.” She says vaccinated customers have also cancelled, objecting to government mandates.
Fahs is concerned the mandates will destroy Valentine’s weekend, typically one of the largest volume periods of the restaurant year. (Update: on Thursday, Minneapolis Mayor Jacob Frey and St. Paul Mayor Melvin Carter both lifted the vaccination-or-test mandate, effective immediately. It remains to be seen whether business will rebound quickly.)
Blue Plate’s business model is different than Manny’s; its neighborhood locations attract a local clientele with many regulars. Co-founder David Burley says his city restaurants are down 34 percent from 2019, but his suburban restaurants are off a couple percent. “I’ve had calls and emails asking us to fight this,” he said. “Customers are punishing us for something beyond our influence.”
Burley says he laid off four managers at January’s end to deal with the loss of revenue. “We are burning cash,” he noted, “this is unsustainable.”
Blue Plate’s Edina Grill, on the Edina side of the Minneapolis border, is seeing a typical January. Red Cow, two blocks away on the Minneapolis side, is down 30 percent versus 2019 and even down versus 2020 when the location was at half-capacity, said owner Luke Shimp.
He said the restaurant turned away 21 customers on Friday who lacked evidence of vaccination, many thinking the restaurant was in Edina and unaffected by the regulations. “It’s such a ridiculous ordinance pitting city versus city,” Shimp said, “and us, the restaurant workers and owners, are the referees and ultimate losers.”
Fahs and Burley say they have been communicating regularly with Mayors Jacob Frey and Melvin Carter’s offices but have heard nothing back. When reached for comment, a spokesperson for Frey’s office said the mayor is “taking a data-driven approach to decisions impacting the health and safety of Minneapolis.”
“While positivity rates, case numbers, and hospitalizations are trending in encouraging directions, the mayor’s priorities remain keeping residents healthy and staying open safely,” the spokesperson said in an email.
“Personally, I don’t get the mayors’ agenda here,” Burley said. “[With Omicron] I know I am just as vulnerable to getting the virus, even though I’m vaccinated. So how is this mandate helping? It strikes me as too little too late,” Burley noted, suggesting that mandates made more sense during the Delta wave when vaccination was protective from infection.
It’s also worth noting that due to U.S. Supreme Court rulings, Minneapolis and St. Paul cannot apply their vaccination mandates to their workers, so attempts to create bubbles of vaccination in restaurants were moot at their inception.
Last month, a Hennepin County district judge rejected a legal challenge to the vaccine mandate in Minneapolis.
Burley believes that restaurant-goers develop new habits quickly and worries that many of his regular customers will find alternate venues. He feels the patchwork of local regulations, with diners never being more than a short drive from a non-mandate restaurant, leaves city restaurants vulnerable to permanent damage. “Why are they targeting just my industry?” he asked, “we’ve been trying to do the right thing.”
The news from suburbia is better. “We’re absolutely benefitting from the mandates,” says Randy Stanley, owner of 6Smith in Wayzata and Baldamar in Roseville. “6Smith is up 34 percent over 2019,” he says. “Baldamar is double [budget] projections.” He believes the changing mandates are weighing on customers and staff and people are acting to avoid them. “We are following guidelines but trying to create as normal an experience as we can, trying not to seem apprehensive or clumsy.”