“Right now, I barely have my nose above water,” says Mark Turocy, owner of Black Rock Social House in the historic Black Rock section of Bridgeport. “There’s only two solutions at this point; either I get some kind of help in some other way – which I have no idea how I’m going to do it – or I need guests in the door, and I need the support from our community.”
Turocy opened the Black Rock Social House in March of 2021 as it appeared the COVID-19 pandemic was on the wane, vaccines were coming and restaurants began to reopen following a government imposed shut down that lasted much longer than anticipated.
So, he created the Black Rock Social House, meant to be precisely that – a place where people could nosh on some great food and socialize after weathering a pandemic that strained society in ways both seen and unseen.
“I pounced on the idea because restaurants were closing, I was able to get a deal on things to save money and get my costs down and open with a COVID business plan,” Turocy said. “I decided to jump on this.”
Turocy rotates its menus to include cuisine from different countries around the world, decorated the walls with art from local artists, serves beer brewed in Connecticut, hosts local bands and a brunch in which drag queens host Bingo games to raise money for charity. The rainbow flag flying out front is meant to be all-inclusive: “I want a bunch of guys wearing red hats sitting next to a table full of drag queens,” Turocy said. “I want everybody to get along.”
It was a fine idea until the Delta variant hit. And then the Omicron variant.
“I started to see things kind of disintegrate. People were nervous,” Turocy said. “We were very hyper-sensitive to COVID here.”
Turocy had outfitted his restaurant with sanitizing stations, required masks, limited seating and social distancing per federal guidelines, occasionally generating anger among potential guests.
“We were never getting our full potential of revenue coming into the restaurant,” Turocy says. “Coupled with that, over the summer prices began to jack up, the cost of chicken blew up, beef blew up. It was insane.”
The double-blow of COVID mutating, circling the Earth and returning launched new waves of caution and isolation by the public, and the Omicron variant came at the worst possible time: the holiday season, a time when restaurants rely on packed houses in order to weather the slow winter months.
By February, Turocy posted a letter to the Social House’s Facebook account announcing that he would have to close his doors. He faced eviction from the property owners – people whom he likes and respects very much and understands that they, too, were struggling to pay the mortgage on the property – and he had drained every bank account, personal retirement account and credit line in order to keep the restaurant running through wave after wave of COVID.
The announcement Turocy posted to social media said, in part: “Due to circumstances that have been insurmountable and barring any 11th hour miracle that can reverse this decision, I must announce that Black Rock Social House will close its doors temporarily… Covid affected us way too much, and unfortunately, due to eligibility obstacles, we were not afforded the same opportunities as other established businesses for assistance to survive these difficult times.”
That 11th hour miracle, it turns out, was just around the corner, but it didn’t come from the government programs afforded to so many other business owners affected by the pandemic, but from private industry.
And while Turocy and Black Rock Social House are still on the ropes, the restaurant remains open and serving customers. He’s afloat for now, but Black Rock Social House and tens of thousands of restaurants nationwide are being left to fend for themselves after enduring two years pandemic restrictions and precautions, a lingering labor shortage and inflation.
Pandemic relief for restaurants gets eaten up
Because his business was new, Turocy was not eligible for a paycheck protection program loan dished out by the federal government. In order to be eligible, a business had to show COVID-induced losses and since the Social House opened during the pandemic there was no way to qualify.
The prospect of supplementing reduced in-person restaurant sales with delivery was more of a boon to new online delivery apps than it was for restaurants. The delivery service took a cut of the bill and passed credit card fees onto the restaurant, lopping off a significant part of the business’s profit margin in an industry that functions on low margins.
But the federal government did offer the restaurant revitalization fund, an anticipated $28.6 billion in funds through the American Rescue Plan Act that could be used by restaurant owners for eligible expenses.
Turocy submitted his application and paperwork to the Small Business Administration, along with roughly 278,000 other restaurants, but there was a problem almost immediately: The Restaurant Revitalization Fund ran out of money and left 177,000 applicants waiting for a second round of funding, totaling roughly $60 billion, that never came.
Originally, the RRF was supposed to usher restaurants owned by minority groups to the front of the line – which could have benefitted Turocy — but a lawsuit filed in federal court argued that policy was discriminatory. An injunction issued by the court essentially moved many of those priority applicants to the back of the line.
While the injunction caused a bit of an uproar, ultimately priority restaurants received the bulk of the $23 billion paid out through the fund. Some major franchises, most notably Subway, also received large payouts to protect hundreds of locations.
“This is where I just want to grab the government by the ears and just shake them,” Turocy said. “Because they don’t understand the eligibility they gave encompassed pretty much everybody, including big, massive, multi-unit companies that have their own accounting department that can whip up everything they have in a fraction of a second and send it in.”
“The window of opportunity of time when they announced to when the portal opened through the SBA wasn’t a very long period of time, and it would take the small businesses, the mom-and-pop businesses a hell of a lot more time to compile all the necessary documents,” Turocy said. “They made it abundantly clear that if you submitted your documentation and there was even a single error of any kind, you were then taken from the point you were at and put at the end of the line.”
In Connecticut, 3,369 restaurants applied for funds totaling $790 million with only 1,303 restaurants receiving funds totaling $301 million, an average payout of $231,131, according to the Small Business Administration, leaving the majority of Connecticut applicants waiting to see if the fund would be replenished; Black Rock Social House was one of them.
“Congress knew the $28.6 billion that was put into the Restaurant Revitalization Fund was not enough to cover what was about to happen,” Turocy said, noting that Sen. Chuck Schumer, D-NY, said it was a “down payment” of help for the restaurant industry. “The money disappeared in a matter of two or three weeks.”
Rather than waiting, Turocy began making phone calls and emailing everyone he could in state and federal government looking for help.
Calls for help
As Congress pushed aside three new bills aimed at replenishing the RRF in favor of debating President Joe Biden’s infrastructure bill, Turocy began making phone calls – a lot of them – to whomever he could get to listen, but was often met with shrugs or, worse, hostility.
He called the Small Business Administration, the Connecticut Restaurant Association, the National Restaurant Association and the governor’s office, which he described as “horrible to deal with.”
“Obviously, I couldn’t get to the governor, but the guy who ended up taking my call, or returning my call, was rude as hell,” Turocy said. He doesn’t recall who he spoke with at the governor’s office but says he was eventually given the phone number for David Lehman, commissioner of the Department of Economic and Community Development.
He received a phone call from an unidentified woman at the DECD who told him he’d taken on too much debt and needed to close his business. “That’s what the state of Connecticut told me,” Turocy said.
CARES Act funding that was supplied to municipalities like Bridgeport to aid in COVID recovery efforts was also tied to eligibility requirements that excluded Turocy and Black Rock Social House.
So, then he began to call Connecticut’s Senators and Representatives, making numerous phone calls to Sen. Blumenthal in particular, whose attention he was finally able to get after calling into talk radio show Melissa in the Morning when host Melissa Sheketoff was interviewing Blumenthal.
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Blumenthal arranged to meet Turocy at Black Rock Social House, but ultimately there was nothing the senator could do directly as Turocy had already gone to every available outlet for possible help.
But Blumenthal did push, both publicly and in legislation, for second round of funding for restaurants. In the meantime, Black Rock Social House’s eviction was approved by the court and Turocy had to be out by the end of February 2022. Barring any sort of “11th hour miracle,” his livelihood would be gone in a matter of weeks.
And, of course, he was not the only one facing such hardships while waiting to see if the RRF would get another cash infusion from Congress.
According to a survey released by the National Restaurant Association released in late January of 2022, half of the applicants waiting for the RRF to be replenished said it was unlikely they would be able to remain in business without the federal help.
“This highlights how impactful RRF replenishment would be. Our own estimates indicate that replenishing the RRF would save an additional $1.6 million restaurant jobs,” said Sean Kennedy, president of the National Restaurant Association, in a press release. “The RRF was a critical lifeline to many, but far more remain on the sidelines, desperately looking for support amidst continued economic uncertainty.”
A survey by the Independent Restaurant Coalition reported that 58 percent of restaurants reported sales decreases of 50 percent or more during the Omicron wave in December of 2021, and 28 percent of businesses that did not receive RRF funds were likely facing eviction.
But the RRF replenishment never came. In March of 2022, Congress excluded new RRF funds from the Appropriations package. Those 177,000 restaurants were left with little else to go on besides hope that the decline in COVID cases in the United States combined with approaching warm weather might stave off permanent closure.
11th Hour Miracle
Despite his eviction having been approved by the court, Turocy worked with his landlord to allow his restaurant to remain through the end of February in the hopes that the RRF would get another round of funding and he could pay his bills.
The outpouring of support Turocy received after posting his closing letter on social media was “insane,” he said, with people offering to help any way they could, but the biggest support – his 11th hour miracle – came from a source he never knew existed.
At this point, banks weren’t an option for him: he had maxed out his credit, depleted every bank account and during the time of COVID, few banks were going to lend money to a struggling restaurant.
While government and banks couldn’t help, someone else did: a new restaurant service called inKind, which essentially pre-purchases food and beverage credits from a restaurant upfront in exchange for the restaurant selling “house accounts” which customers can purchase. The house account functions much like a gift card, but the customer gets more food and drink for less money.
The company bills itself as “a unique funding model that provides value beyond traditional capital” built by fellow restauranteurs. The company’s website lists more than 450 restaurant projects with 35,000 diners in their network.
inKind’s Chief Executive Officer Johann Moonesinghe told Turocy that it is not in their best interest to let their restaurant partners fail.
With tears welling up in his eyes, Torocy says Moonesinghe hopped on a conference call with himself and his landlords to work out a deal: inKind would pay off Turocy’s back rent with inKind acting as the guarantor through year three of Turocy’s lease.
“Literally, it’s a miracle,” Turocy said.
Another boost came to Black Rock Social House in the form of a $25,000 grant by the City of Bridgeport to expand their outdoor dining area by adding a deck. Currently, the Social House has a small patio on the street, but with limited seating.
It’s all good news at a time when Turocy needed it, but it doesn’t mean he’s out of the woods yet. Turocy had really needed the Restaurant Revitalization Fund money in order to truly get back on his feet and the restaurant industry, in general, continues to face strong headwinds in the form of inflation and labor shortages.
According to the Connecticut Department of Labor, jobs in the leisure and hospitality sector – which includes hotels, event venues and restaurants – remain 16,000 jobs short of pre-pandemic levels.
And inflation has shown little sign of stopping, with food prices for meat, poultry, fish and eggs rising 13 percent in a year, the largest yearly increase since 1979, according to the Bureau of Labor Statistics.
As a thank you to inKind, Turocy put together an event for those who purchased accounts through inKind to dine at his restaurant, many of whom are his most ardent supporters.
He is all smiles as he excitedly greets each guest with a glass of prosecco while a three-piece band plays Jazz in the dining area. “I couldn’t be more appreciative of your support,” Turocy said to a couple who had just arrived. “I really mean it from the bottom of my heart.”
As fingers plucked the stings of an upright bass sending a rhythmic thumping throughout the bar, Mark scurried between tables, chatting with guests and tending to their needs.
Andy Harris, inKind’s Chief Risk Officer, made the trip from Austin, Texas to be in attendance. Despite the setbacks that Turocy has faced, Harris and inKind remain bullish that the Blackrock Social House will be a success.
“We know and we believe that his concept is a good concept and will do well if everything is back to normal,” said Harris. “We’re just in this super weird time where it’s not.”
However, it wasn’t just Turocy’s business plan that compelled inKind to step up and pull Turocy back from the edge of financial ruin, it was also who he is as a person.
“We could see this really hard-working guy, and through our entire experience with him, he’s such a hustler, doing whatever he could do to try and get money in the door in a very trying time,” Harris said. “This is a guy who we want to make sure we support and see him through.”
inkind has been able to help hundreds of restaurants, including some of the biggest names in the industry. But helping small business owners like Turocy takes on a special meaning for the inKind team.
“It reinforces why we’re doing what we’re doing,” Harris said. “And for the team, the reason why they’re happy to keep going and work a little bit longer because they know, ‘Hey, what we’re doing here matters and it changes people’s life.’”
