Open Streets, Open Restaurants
How courageous city leadership could aid some of the hardest hit businesses and our most prized community assets during the pandemic.
The COVID-19 pandemic has already had a profound impact on small restaurants, permanently shuttering 3% by the end of March alone. Estimates indicate that as many as 30% of all restaurants may be forced to close. Going out to eat has always been a significant feature of America’s urban and social experience—if restaurants fail in large numbers, our communities will have to grapple with a harsh new economic and social reality. While cities are not exempt from hardship, they are the most well-equipped at this crucial time to step in and implement innovative solutions that aren’t prohibitively expensive or time-consuming to execute.
Capacity is the most significant factor in restaurant revenue models.
One aspect of a restaurant’s future viability is bottom-line dependent and hinges on how quickly the business can become fully operational at pre-pandemic revenue levels. The challenge for most is that the capacity of their space is the most significant factor in their business plan. The economics are complex but can be simplified per the golden rule of restaurants. Ideally, rent should take up no more than 25 percent of your revenue; another 25 percent should go toward payroll, and 35 percent should go toward the product. The remaining 15 percent is what the owner takes home. Even before the pandemic, 15 percent profitability is an optimistic margin.
Essentially, a restaurant is designed to maximize the number of seats that fit into the allotted space and the number of meals served in that space throughout the time the restaurant is open. It’s apparent the latter is significantly dependent on the former. If restauranteurs are paying rent at pre-COVID-19 rates, but need to accommodate safe distancing by increasing the space between dining parties, they might be losing half to two-thirds of their seating capacity, upending the fragile calculus and making many restaurants financially non-viable. It is not difficult to see the long-term economic challenges restaurants are facing.
What can cities do to help some of their most valued assets?
So what can cities do to help some of their most valued assets without adding to their own financial woes? One possible opportunity may be as simple and economical as closing city streets strategically to allow restaurants, and therefore people, to spread out. It’s already happening in our communities—but it can be done for more than just making safe space for pedestrians. the same strategy could be employed to create gracious urban food courts where restaurants might be able to approximate their past revenues by utilizing the public way. Social distance could be easily maintained. It could be done simply and with public safety in mind. In cities like Minneapolis it’s a seasonal solution, but any improved revenue would be better than no revenue at all.
To demonstrate how this strategy might be implemented, we studied Robbinsdale, Minnesota. Robbinsdale is a small first ring suburban community northwest of Minneapolis with a historic downtown district that in the last 10 years has become known as much as anything for its amazing density and diversity of great restaurants. The following diagrams show how Broadway might be used if it were closed to utilize the public way to create safe and socially distanced space for these business to successfully operate.
Downtown Robbinsdale—Street Closures
Now…
Next.
The difficulties of a plan such as this are easy to imagine, but people and the urban spaces they inhabit are a city’s most important asset. Coronavirus has made us aware that our communities are fragile, and we need to do everything we can to support the businesses that provide the unique character attracting people to the urban experience. Our proposal is a zeitgeist idea that a year from now will look familiar. This is an effort that could be put in place immediately. The concept should be broadly implemented to make sure these vital businesses have a fighting chance to survive. Minnesota’s Architects are here to facilitate the conversations.
—Story by Chris Schmitt, AIA and Michael Parotti, Associate AIA