The conclusion of the University of Georgia football season is usually the most lucrative time period for Athens businesses. However, the economic hardships from the COVID-19 pandemic resulted in an inevitable decrease in sales and continued worries for the future.
From January through October, Athens bars and restaurants made about 60% of what they made on average in 2018 and 2019 in gross liquor sales during the same time period. This resulted in establishments losing about $7.8 million in liquor sales and fixed expenses.
“I know lots of places that are running are hand to mouth and trying to just cover the rent, and mortgages are falling to the managers and owners who just work basically for free or extremely long hours for not very much,” said Norman Scholz, one of the owners of the Globe. “I think we're going to see lots of restaurateurs and managers getting really burnt out.”
Establishments report their gross liquor sales to Athens-Clarke county, who then charge establishments a 3% excise tax. These numbers reflect a baseline amount of how much businesses have made or lost in the past year, not including sales on food, non-liquor drinks such as beer or cover charges. These estimates are based on excise tax records obtained through an open records request on Dec. 16.
“A lot of the money that you make is on alcohol sales, at least for us,” Scholz said.
The estimated amounts are subject to change throughout the year as establishments work to report their monthly gross liquor sales to the county. The county manager has waived interest and penalties for late excise tax payments, so some establishments may be waiting to report their sales for the year. It is difficult to know which places have not reported their sales yet as some may be closed temporarily or have closed permanently during the year.
Risk vs. Reward
Bars and restaurants have been hit with multiple financial hardships caused by the pandemic. Back in March, when the University of Georgia went online while the state and ACC issued stay-at-home orders, businesses closed up for what they assumed would be a short period of time.
Canceling St. Patrick’s Day celebrations seemed like the biggest hurdle. As the months went on, cancellations continued — first the Athens Orthopedic Twilight Criterium, then AthFest Music and Arts Festival, coupled with conflicting regulations from the state and city. In the summer, already a slow time in Athens, some bars stayed closed and others operated at drastically reduced capacity.
Bars reopened on June 1 at 35% capacity after more than two months of mandatory closures due to the pandemic. For the summer, gross liquor sales were at least $1.9 million for bars and restaurants in June and July. For 2019, establishments made a little over $3 million during the same time.
“So any kind of reduced capacity and reduced business we're gonna end up having a lot of trouble trying to make money and then not lose money,” Scholz said. The Globe has been closed since the beginning of the initial shut down.
This fall, the return of students has meant not only an increase in customers and sales, but also days of sustained business for some establishments due to Georgia football.
“Well, it's definitely different because obviously, we can't pack our bars, but still people are coming, they're coming [for] longer hours,”Jarrod Miller said the day after the Oct. 3 Auburn game. Miller is the chief operating officer for 1785 Bar & Grill, Moonshine and On the Rocks.
Nevertheless, business continues to vary due to numerous factors, and establishments must still operate at a limited capacity or face citations from Athens police. They must also comply with the 11:30 p.m. last call time established in July. Previously, the last call time was 2:00 a.m.
Restaurant and bar owners face particular challenges in the COVID-19 pandemic. With limited local, state and federal aid, bars and restaurants in Athens have had to balance complying with safety standards and trying to stay in business, an increasingly tough task.
Studies show that eating indoors and going to bars carries a high risk factor for virus transmission. In some countries, such as Germany, the governments have offered assistance to small businesses such as bars in exchange for mandated lockdowns this past fall due to a resurgence in virus cases.
“If I could wave a magic wand and make all things true across layers of government, you know, I would. I would have bars closed through the pandemic, but have substantial federal aid coming their way to keep them afloat until the end of this,” ACC Mayor Kelly Girtz said.
Local aid has also been limited as local governments are unable to directly provide money to businesses due to the Gratuities clause in the Georgia State Constitution. The clause limits how local and state governments use public funds. This has left the ACC government attempting to find creative ways to provide support and aid to local businesses.
“Any of those businesses have been challenged, and I think they deserve to be supported,” Girtz said. “When we come out of this … we want those businesses to land on their feet.”
Fall, Football and Fluctuations
Bars and restaurants saw an increase of over $300,000 in gross liquor sales from July to August as of Dec. 16 records. In 2019 and 2018 the increase was over $500,000 during the same time period.
This demonstrates that even though there was a substantial increase in business for establishments from this summer to fall, the current environment is continuing to negatively impact these businesses.
Despite this, Athens residents and public officials have noticed the increase in business. While there were a few lines outside downtown bars this summer, they were nothing compared to the lines of students and patrons in August.
“It’s been perplexing to some to see students in close proximity to each other downtown, but it’s certainly not the picture we’ve seen in previous falls or previous springs.”
-David Lyn, the director of planning and outreach for the Athens Downtown Development Authority
In the beginning of September, UGA received national attention for its spike in positive cases, totalling to over 1,000 new cases from the week of Aug. 31-Sept. 4.
For the college bars in particular, the lines continued into the football season. Miller has pointed out he has seen numerous lines around his establishments depending on the day. On the Friday before the Oct. 3 Auburn game in Athens, Miller said Moonshine staff saw 30 people in line before the bar opened.
“The lights are off, it's dark, there's 30 people lined up. That gives you any idea of [how] people made up their mind that they're going to be inside the bar,” Miller said.
As the football season began, Miller’s bars began charging covers on game day. Miller said it’s a common practice, but this year the cover charge has particularly been important as his bars must operate at a 35% capacity.
“If I'm only operating at 35% of my capacity, there's little, there's a ceiling of what I can make as a business,” Miller said. “So for me, those 35% of people that are coming in need to be paying for cover. I mean, that that's just a smart business decision in the middle of COVID.”
Bars in general rely on a number of factors in determining how much business they receive during a night, pandemic aside. During the football season these factors include: weather on a game day, away versus home games and wins versus losses. Miller said in his experience, people spend less money after a loss. With limited seating in the stadium this season, there were also fewer prospective patrons in Athens than on normal game days.
During the Oct. 10 home game against Tennessee, Miller said his bars practically became Tennessee bars as Tennessee fans crowded his establishments. Due to capacity restrictions, Miller said Georgia fans weren’t able to get in. This was also noted in pictures taken of Silver Dollar Bar. However, when asked about the weekend of the away game against Alabama, which ended in a loss, Miller said business had not been as good.
“It [game days] allows a little bit of breathing room because you get a longer day … having a day in which...I'd say an extra six hours of people in the bar drinking and eating? That’s huge,” Miller said. “It's like getting more weekend nights rolled in one day.”
From August to October, establishments made at least $4.7 million in gross liquor sales which is about 64% of what was made during those same months in 2019, as of Dec. 16 excise tax records.
Miller said that his bars were receiving less than 40% of business than what they would normally receive.
“It's not really a situation where you're saving and profiting, you're doing enough to get by.”
Bars that do not necessarily rely on game day crowds may have faced a different reality with the return of students since many of their patrons are Athens residents.
Kim Naugle, one of the owners of Flicker Theatre and Bar, noted how many of their patrons were worried about the return of students and the effect it would have on case numbers.
“August was pretty terrible,” Naugle said. “We had like two days of good and then once all the schools reopened everybody panicked and stayed home.”
Naugle said September was better than August and while she said October was “awesome,” December has been as slow as it was in July.
In order to attract more business, Flicker has a variety of events such as vintage pop-sales, renting out their theatre space for date nights, livestreams of bands and movie screenings. They have also teamed up with Iron Factory to use its stage to host music events and dance parties.
With sales significantly lower than what they would normally be, along with the continued pandemic, some businesses like the Globe have chosen to remain closed.
“The possibility is that [if] we were to open and increase our overhead, we'd be losing just as much money and possibly more money,” Scholz said. The owners only wanted to re-open one time and not have to close due to high overhead costs and limited business, Scholz said. These costs can include, but are not limited to, food stock, bills and insurance.
For the Globe, Scholz said in order to make money, the business has to fill out its 65-seat capacity in its dining room for three nights a week for six hours. With the current reduced capacity, low sales and health risks, he said reopening is just not beneficial for their business, especially if they would have to re-close and give away supplies such as food.
The Globe, like other businesses downtown, has a series of fixed expenses it has had to maintain even during its closure such as insurance, utilities and rent, which Scholz said is probably one of the reasons other businesses reopened in the first place.
However, because the Globe has rented its space for 31 years, Scholz said the landlord has allowed the business to pay half of what it normally would each month.
“Believe me, we're in this business because we love serving people,” Scholz said. “And there's a reason we've been doing this for 30 years, but we really don't think that we can make ends meet right now.”
Rent has been a concern for Naugle as it has been for many other businesses.
“The landlord has given us some help, I just told him that paying full rent in August and September pretty much devastated our bank account so … he's given us some wiggle room which is great,” Naugle said.
In terms of financial assistance, Naugle was able to receive a grant from the Athens-Clarke County Government’s joint development authority with the city of Winterville. Naugle said the assistance helped pay for about two months of rent.
The authority was created to help local businesses which are otherwise limited by the gratuities clause in the state constitution. Girtz said that the association has provided about 400 grants from CARES Act funding and 53 loans.
While some businesses, such as Flicker, have benefited from these programs, Miller said that his businesses were unable to qualify for aid from the joint association with Winterville due to the number of his employees.
ADDA is hoping to follow up on its grant program from spring, but its pool of funds operates on parking fees downtown, Lynn said. With a limited number of people going to businesses downtown and the establishment of parklets, the ADDA’s funds are also limited in comparison to what they would normally be.
“It's not as bad as we thought it was gonna be, but we're still being cautious on how we expand the next round of grants till we get a better grasp of our revenue stream,” Lynn said.
There is also the parklet program, which was adopted in the spring for businesses to be able to use the parking spots in front of their business as seating areas. This would emphasize safer outdoor seating and potentially provide more business opportunities.
While multiple establishments have taken advantage of the parklet pilot program, the program has its limitations.
“Right now it's only available to restaurants and not exclusively to bars. I would prefer...to allow bars to use them, so long as they would then reduce their indoor capacity,” Girtz said. With some bars attracting lines during parts of the fall, Girtz said that some commissioners are concerned parklets would draw more crowds around those establishments.
Scholz said that with the limited number of spaces outside of the Globe and the incline on Clayton Street right outside their business, the parklets would not be an effective money maker. That also does not include the investment in furniture and outdoor supplies for the potentially temporary pilot program.
Since Flicker is a bar, it does not qualify for the parklet program, though Naugle says it would really help her business. However, the county government has shut down parts of Washington Street to allow outdoor seating which extends to bars. Naugle said this was very beneficial to Flicker.
Though the programs and financial assistance help these businesses keep afloat, they are still facing the continued 60% fraction of gross liquor sales due to the pandemic.
Though fall has brought an increase since summer, the day to day sales themselves fluctuate. With the pandemic continuing through the indeterminate future, these establishments are facing extremely thin margins.
For Naugle, there is concern over the continued Judicial Emergency, which marks when the current last call time of 11:30 p.m. will end, especially with New Years Eve right around the corner.
“The bad part about that is, let's say you have a bad month, you have a major repair, or something catastrophic happens, now you're back behind the eight ball, financially,” Miller said. “That's kind of why people [bar owners] are so on edge.”