By JIM MCLEAN
Kansas News Service
TOPEKA — Set apart from its fast-food neighbors by a vintage neon sign that speaks of another era, the Hanover Pancake House sits a few short blocks from the Kansas Statehouse. It’s been a Capital mainstay for more than 50 years.
But today, like most dine-in restaurants across the state, it’s closed because of the coronavirus.
Those closures have thrown tens of thousands of Kansans out of work and deprived hundreds of thousands more the comfort of friends in familiar places.
When owner Scott Albrecht shut it down on March 20, he told his 32 employees that he hoped to re-open in a matter of weeks.
Anything longer than two or three weeks, Albrecht said, “and I’ll need some help.”
Restaurants in peril
The challenges facing Albrecht and his displaced workers confront thousands of other businesses across the state. They all will need state and federal lifelines to survive the crisis.
For Marsha Dighera-Neria, surviving after losing her job at the Pancake House meant getting unemployment checks as quickly as possible.
In just the last two weeks, 79,353 Kansans filed initial unemployment claims.That’s a record.
The unprecedented surge in claims has overwhelmed the Kansas Department of Labor, which is averaging more than 200,000 calls a day.
Hospitality workers — a category that includes hotel workers and those employed by Kansas’ more than 5,000 bars and restaurants — account for nearly 20% of the new unemployment claims.
Dighera-Neria beat the rush by filing right after finishing her final shift. She expects to recieve $146 a week until she goes back to work.
“That’s about half of what I was making at the restaurant,” she said.
A federal relief plan aimed to minimize the impact of coronavirus-driven shutdowns to the economy will deliver another $600 a week to suddenly jobless workers like Dighera-Neria. But it could be weeks before those benefits start arriving.
Stuck at home, Dighera-Neria and the other waitresses check in with one other almost every day by phone or on Facebook.
“We all have to take care of each other and that’s what us girls are trying to do,” said Marsha Dighera-Neria.
Some, she said, are handling the uncertainty “better than others.”
“It’s hard,” she said, “when you don’t know how long this is going to go on.”
So they worry together about whether the restaurant will survive and how the customers they’ve grown accustomed to seeing every day are getting by.
“Some people really depend on coming in,” Dighera-Neria said. “Elderly people, you know. It’s human contact and now there is none.”
Saving the diner
Restaurants across the country lost $25 billion in March, according to the National Restaurant Association. Thousands of the restaurants closed now will never reopen.
Albrecht acknowledges that the restaurant he inherited from his father in 1999 could be among those shuttered for good if the health crisis persists for months. But for now, he’s laying the groundwork to reopen by applying for a Small Business Administration loan that he won’t have to repay if he hires everyone back.
“It’s going to be the shot in the arm we need to open back up,” he said.
The relief bill recently passed by Congress contains $350 billion for the Paycheck Protection Program. Small business owners must go through their local banks to obtain the loans. However, bankers across the country say they’re not ready to handle the anticipated volume of applications. They also say federal officials haven’t provided them with detailed instructions on how to run the program.
Albrecht said he caught his banker unaware when he called earlier this week to start the process.
“I was surprised he hadn’t heard anything yet,” Albrecht said.
Once the administrative problems are fixed, Albrecht hopes to get about $100,000 to cover ongoing expenses. Everything from rent — about $5,000 a month — to utility bills and maintenance to keep the restaurant’s water softening system, freezers and ice machines working.
“Those things add up real quickly,” he said.
On the day he closed, Albrecht said he had enough cash on hand to pay his employees, but he didn’t have enough to cover the roughly $15,000 he owed the federal and state governments in withholding and sales taxes.
He had set that money aside, but he spent it on emergency repairs to an oven and the restaurant’s main freezer.
“Had I known this (coronavirus) disaster was going to be happening, I could have held those checks and paid them a little later,” he said. “But I had no idea we were going to be this drastically affected.”
Ripple effects
With so many Kansas businesses struggling, state officials know that a reckoning is coming. Tax collections that had met or exceeded estimates every month for the last two years fell short in March.
Though they totaled only $8.6 million less than the expected $523 million, Gov. Laura Kelly is bracing for steeper drops in the months ahead.
“We know we’re going to be taking a huge hit in our revenues,” Kelly said in a news conference.
By the time Albrecht shut the restaurant down, he was also starting to fall behind on payments to the distributors who supplied him with bread, eggs, bacon, coffee and other diner staples.
With hundreds of thousands of restaurants across the country in similar straits, those companies are also suffering.
Sysco, one of Albrecht’s suppliers, is replacing fresh meat and produce with frozen fare to cut back on costs. It’s also laying off workers in droves. The person who handled Albrecht’s account for the last dozen years was among the casualties.
“He was a 12-year veteran of the company,” Albrecht said, and “a good guy.”
The ripple effects of Hanover’s closure are evident in other ways.
Mack Smith is the kind of hail-fellow-well-met you’ll find among Capitol insiders. He and a half dozen others have met for breakfast at the Pancake House nearly every weekday for years. They eat, read newspapers and talk about politics, sports, music, movie trivia.
“We have a blast,” Smith said. “We have our regular waitresses on certain days. It’s quite a relationship that’s developed through the years.”
Smith misses starting each day with “my buddies,” but said he also thinks about the people who have served him over the years.
“I worry about how they’re going to feed the people they love,” he said. “It’s just scary as heck.”
Jim McLean is the senior correspondent for the Kansas News Service is a collaboration of KCUR, Kansas Public Radio, KMUW and High Plains Public Radio focused on health, the social determinants of health and their connection to public policy. You can reach him on Twitter @jmcleanks or email [email protected].