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Restaurant & Bar Updates

Of Lawsuits and Loopholes: North Texas Bars, Music Venues Find a Way to Survive

They’re reopening as restaurants.
Bret Redman

In March, businesses deemed “non-essential” spent a few weeks in the dark during a county-wide lockdown to control the spread of coronavirus. Months later, as the state began to reopen and allowed bars and restaurants to welcome in guests, COVID-19 cases spiked. Gov. Greg Abbott again tightened restrictions on June 26. Businesses where at least 51 percent of revenue came from alcohol sales had to close.

That meant bars, but also music venues and restaurants that sell a lot of booze. It swallowed up distilleries, wine bars, and wineries. Breweries with modest food offerings were included. While restaurants have been allowed to seat patrons at half their maximum occupancy, bars—in particular those that feel more like a restaurant than an explicit bar—feel abandoned. Some of those bar owners filed a $1 million lawsuit against the Texas governor in July. Others, already deep in survival mode, are getting by with takeout and to-go cocktail kits.

But several of these alcohol-oriented businesses are making a comeback through a slight workaround: they’re becoming restaurants.

What, under the law, did it mean to be a restaurant or to be a bar? There’s no specific license for either. So in a July letter to the governor, the Texas Restaurant Association asked Gov. Greg Abbott to amend or clarify the definition of a restaurant in his June 26 order (GA-28), which shuttered indoor dining at thousands of restaurants and bars. According to the TRA, many restaurants already cross that 51 percent alcohol sales threshold, citing affordable food prices and higher costs for craft cocktails, wine, or beer. Due to the confusion over the parlance of what makes a place a restaurant or bar, the organization estimates 1,500 restaurants were unduly closed and put 35,000 employees out of work.

“[W]e continue to urge all businesses and all Texans to do their part to prevent the spread of COVID-19 by following the state’s health and safety protocols,” the TRA told D, echoing sentiments in its July letter. “This will be especially important for any business that is allowed to reopen under TABC’s updated guidance, which is critical to reopening the approximately 1,500 restaurants that were misclassified as bars and required to close.”

In an August 7 open letter to the beverage industry, the Texas Alcoholic Beverage Commission’s executive director A. Bentley Nettles said the agency has worked with various establishments reopen. “This has resulted in more businesses—including breweries, wineries and distilleries—being able to open up while still complying with the executive order.”

That said, the TABC reiterated that it will enforce the law and any business willingly flouting the rules will have their license revoked.

Places like the Katy Trail Ice House in Uptown are among the business that’s recently made a comeback. The beer garden announced on its Facebook page last weekend that it was reopening with its newly acquired permit. Co-owner Buddy Cramer told the Dallas Morning News that “he worked with the TABC to reopen his establishment under the agreement that it will begin to sell more food than alcohol.” Lava Cantina in The Colony—whose owner Daniel contends it operates as a restaurant, not a bar—successfully reopened last month after the TABC swiftly shut it down in June. The TABC didn’t consider it a restaurant then. Now the cantina combines food and concert ticket sales into one category, putting alcohol sales at around 40 percent, well below half. 

The TABC received more than 600 requests from existing businesses for Food and Beverage Certificates since Abbott’s order took place and granted about 300. Among those granted was Billy Bob’s Texas in Fort Worth. It’s secured a food and beverage certificate to classify the massive music venue as a restaurant. Others, like the Granada Theater, are following suit.

For live music venues that fall into the bar category, even if it is possible to reopen as a restaurant, that may not help them make up for lost revenue. As long as national tours are at a standstill, music venues are left without their main source of income.

“You can’t make money on local shows. You’re doing it for the love of music and you’d probably lose money, maybe you’d break even,” says Mike Schoder, owner of the Granada Theater and Sundown at the Granada. “We have to wait for the national tours. That’s really the only thing that we can do with a venue that pulls in that 500 to 1,000 range.”

The Granada is in the process of reopening as a designated restaurant, but Schoder isn’t comfortable pinning down a reopening date just yet.

“We were going to announce about six weeks ago some local shows, and with everything, the climate then, it didn’t feel like it seemed smart,” he says. “We have some shows that we’ve just moved, we keep moving them into the future.” 

For now, the venue has shifted its focus to Sundown at the Granada, an attached restaurant and patio. It hosts outdoor concerts several times a week, now starting before dinner because people simply aren’t staying out as late anymore.

“That’s kind of our response, our logical, smart response. We book 500 to 600 bands a year between the Granada and Sundown, so obviously people have been asking when live music will return. We launched, almost two months ago, it’s called our Sundown Sidewalk Sessions. We set up a stage on our sidewalk right near our patio,” says Schoder.

The Granada Theater just underwent major renovations, including a new floor plan with tables in place of standing room to allow for socially distanced concerts. Schoder says it may open soon with some smaller concerts, but he’s hesitant to rush the reopening.

“There’s not going to be any national tours this year, so I think we can almost say that’s 99 percent positive,” he says. “We have a ton of dates confirmed next year, so we’re just looking forward and hopefully our situation with COVID will be different.”

Other venues or bars that don’t have an existing kitchen—or the space and capital to construct one—don’t have such an option. That’s why places like Double Wide in Deep Ellum is going the advocacy route. It’s joined the newly minted Texas Neighborhood Bar Coalition, which has just this week launched 5 Days of Action. The campaign outlines actions each day of this week that include reaching out to local and state representatives on behalf of neighborhood bars that have been burdened with the strictest closures. The TNBC want to chat with state officials before some bars close permanently, before it’s too late.

Gov. Abbott addressed the concern of booze-related businesses affected by COVID-19 at a press conference on August 11. He said bars pose a specific risk.

“Go back in time to the time when bars and other businesses were allowed to be open more than they are now. It was, after they were open, that we saw an increase in the spread of COVID-19 that led to the necessity of closing them. We have to vigilant right now, to make sure we continue to slow the spread of COVID-19… The fact of the matter is they way that bars are structured, they are structured for people to come together, close together, without face masks, in situations where people frequently become intoxicated and when they become intoxicated, they lose the discipline that they need to maintain the practices to prevent the spread of COVID-19.”

The irony: in allowing restaurant dining rooms to stay open, Abbott created an unequal playing field among the businesses that make up the service industry. You can’t blame the bars for finding a loophole to resume their operations. What that means for Abbott’s stated purpose behind his closure—to slow the spread of the virus—will remain to be seen.

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