Ingenuity, loyal customers, grants help Iowa restaurants survive pandemic year

After a year that threatened the survival of restaurants everywhere, Sam and Phoebe Charles await spring with hope.

'In 2020, the conversation across the industry was, ‘Do whatever you need to survive,' ” said Sam Charles, the co-owner of the Rodina restaurant in Cedar Rapids. 'The conversation has changed, and it's not really so much to survive. It's digging yourself out of the hole that 2020 was.”

No one knows exactly how many Iowa restaurants failed since the COVID-19 pandemic swept the state.

But Jessica Dunker, president and CEO of the Iowa Restaurant Association, thinks restaurant closings may fall short of the initial dire predictions, thanks to government intervention, customer support and restaurateurs' ingenuity.

'I'm cautiously optimistic we might be under the 20 percent closure rate we thought we might have,” Dunker said.

Lynn Allendorf, director of the John Pappajohn Entrepreneurial Center at the University of Iowa, said restaurants did 'a really good job, many of them, trying to find a way to get through this. I've only been to a restaurant maybe four times over the past year, but they're really taking innovative measures.”

Surviving restaurants saw revenues drop by about a third in 2020 - about $1.4 billion in Iowa, according to the Iowa Restaurant Association's latest member survey. Hard numbers on restaurant closings aren't yet available - IRA's estimates are based on member surveys.

'We've always felt that places in urban areas, the numbers will come back again,” Dunker said. 'The hard thing is going to be the rural areas.”

‘Something coming'

Charles and his wife, Phoebe, marked Rodina's one-year anniversary in Czech Village in January 2020.

'We were starting to feel really good,” Phoebe Charles said one morning last week in the preopening quiet of Rodina's dining room. 'It felt like a huge turning point. Like so many people, we thought ‘2020's our year.'”

But by mid-February, conversations with his brothers in New York City had left Sam Charles uneasy.

'We actually approached our landlord and our bank, probably five weeks before the shutdowns happened,” he recalled. 'We felt something was coming.”

On March 13, 2020, the day national emergency declarations shut down large gatherings of any type, the Charleses furloughed Rodina's entire staff of 19.

'That was the only way that we could guarantee our staff was going to be able to pay their bills, and hopefully have jobs after we came back,” Phoebe Charles said.

Back to Cedar Rapids

Connecting Cedar Rapids with Iowa's agrarian traditions was a driving force behind Rodina, described on its website as 'Midwest Comfort Food … the intoxication of smells and flavors that remind us of home.”

The Charleses met while working in the Denver area, where Phoebe, now 28, was assistant general manager of a restaurant and Sam, now 33, was executive chef for a restaurant group.

'We were both doing quite well, as far as our careers are concerned,” said Phoebe Charles, a Cedar Rapids native. 'But every time we came here, we felt we were leaving home when we'd go back to Denver. We just wanted to try to do it ourselves.”

The couple moved back to Cedar Rapids, where they worked at some local restaurants before opening Rodina, 1507 C St. SW.

'We wanted to have the best product we could get our hands on,” said Sam Charles. 'We wanted to support our local farmers. We wanted a sustainable product.”

The first year saw adjustments any new restaurant would make - dropping lunch service after that business failed to materialize, for example. Rodina didn't turn a profit in 2019, but its owners planned for that. March 2020 was something else.

Staying open

After laying off staff, the Charleses 'amped up” sanitation practices, running an ozone generator at night to cleanse the air as they adopted a carryout-and-delivery format that seemed antithetical to their vision for Rodina.

'The experience of sitting down in a restaurant and being immersed in that space is not truly translatable,” Sam Charles said. 'We really had to re-evaluate the way that our business runs, the way that our concept was. We were pretty much exclusively a family-style restaurant, and we had a pretty aggressive non-carryout policy.”

‘Patient, nimble'

Across town, Zeppelins also went takeout-only until warmer weather allowed for outdoor seating.

'We were able to get a patio outside the restaurant, so we now have five outdoor tables,” said Abby Luther, front-of-house manager and managing partner of Zeppelins Bar & Grill, 5300 Edgewood Rd. NE. 'People love it. It's nice to have.”

Going through a pandemic, she said, forced the restaurant 'to become pretty creative but also patient and nimble.”

Sandwiches joined Rodina's menu, alongside dishes selected and prepared to travel.

Ego out the door

'We really had to let our ego go, and in doing that, we discovered food that people in this community want to eat,” Sam Charles said. 'We had to cater the food to things that would sit well in a box and be consumed in 30 minutes.”

Rodina began offering limited indoor seating by late May. A few weeks later, the patio, initially something of an afterthought, opened. Designed to sear 24, the patio allowed socially distanced seating for 16.

'A lot of people didn't know about it but since we were forced to seat people out there, I actually think we'll have a long-standing call for it,” Sam Charles said. 'Come spring, I think we're going to have a lot of people returning to our patio.”

Indoor dining returned in September, seating customers in about half of the dining room's 75 seats.

The Charleses rehired their first server in October, joining a bar manager and sous chef who'd returned earlier.

'I'm ready to get off my feet all these days,” Phoebe Charles said. The couple's second son, Felix, would be born in December, joining 2-year-old Otto.

'In the fall, we started to see some interesting people - individuals who were coming out to dine for the very first time,” Sam Charles said. 'It wasn't just monumental for the business, it was monumental for the morale of the team, having people back in the space.”

Lots of hiccups

Still, Phoebe Charles estimates gross revenue over 2020's last two quarters was down 53 percent over 2019.

Adapting on the fly became 2020's routine.

With the Iowa State Fair canceled, the Charleses had planned a 'State Fair” Fourth of July weekend with bar specials and a full roast hog. Then a contractor bored through water pipes beneath C Street SW, scuttling plans for the weekend.

'Lost a lot of product, a lot of business,” Sam Charles said.

The building sustained only minor damage in the Aug. 10 derecho, but more inventory was lost in the 10-day interruption of electrical service.

'When margins are already so tough, and money is so thin, when you have to throw away $3,000 worth of product, it's just tough,” Sam Charles said, although insurance covered the cost of the spoiled food.

Rodina didn't qualify for the first round of the Paycheck Protection Program, but the restaurant received aid in subsequent rounds of pandemic relief.

The Charleses have applied for the Iowa Restaurant and Bar Relief Program, announced this January and funded through $40 million in federal CARES Act money.

'The assistance that's been given, while at first didn't seem plausible, has been monumental in our survival,” Phoebe Charles said. 'We're feeling positive these days that we will weather the storm.”

The Iowa Economic Development Authority also awarded more than $90 million in grants through its Small Business Relief program, which gave priority to restaurants, bars and other 'consumer-facing small businesses,” according to IEDA spokeswoman Staci Hupp-Ballard.

Figuring it out

By year's end, the Charleses had rehired nine of Rodina's 19 employees. At Zeppelins, Luther has rehired all staff that had been let go, 'and some new people.”

Like most area establishments, both Rodina and Zeppelins have retained social distancing, enhanced sanitation and other precautions after Iowa Gov. Kim Reynolds lifted mandatory restrictions in early February.

Phoebe Charles expects seating restrictions to continue through 2021 as COVID vaccinations continue.

'We're still figuring that out, but we feel more comfortable than we have in a year,” she said. 'For my mental sanity, I'm at least going to do this through the year.”

'We've created an environment that individuals who wanted to feel safe dining, were able to come and dine,” Sam Charles added. 'During the carryout phase, it was incredibly saddening about walking out into the dining room and having it be dead silent. It was almost like going into a graveyard.”

Further relief could come with Senate approval of the $120 billion RESTAURANTS Act of 2021.

Passed by the U.S. House in October, the fund would provide relief for food service businesses with fewer than 20 locations. Business operators would be able to apply for grants to cover expenses incurred during the pandemic.

Industry challenges

Still, that may not be enough to save small-town gathering establishments, said Dunker, of the Iowa Restaurant Association. She noted the average Iowa restaurant nets a profit of about $100 a day.

'A lot of them were just kind of a sustaining lifestyle for a family,” she said. 'They would hire a couple of servers, but it's essentially a business they were creating for themselves. If they close, there's just nobody that's going to come in and reopen.”

'It's important that our industry is being talked about on a national scale,” Sam Charles said. 'The more that we get injected into the conversation, the more likely it is that the industry is going to get the support that it needs.”

Allendorf, from the UI Pappjohn Center, expects future business students will study 2020's lessons.

'It's the resilience and the ability of entrepreneurs to switch on a dime,” she said. 'How quickly these entrepreneurs were able to rethink and come up with innovative solutions.”

'If it wasn't this, it's always something else,” Zeppelins Luther said.