Downtown San Mateo restaurants hang on through takeout orders

Manuela and her husband Francesco Zaccaro have owned Vespucci Ristorante Italiano in downtown San Mateo for the past five years. Getting to know customers is part of their business.

“I really enjoyed doing that,” she said. 

Now, she only gets a quick conversation with her customers over the phone when they call in an order to go, or in person, briefly, when they come in to pick up their food.

“It’s frustrating,” she said. “But it’s better than nothing.”

That’s not all that’s changed about running her restaurant since the shelter-in-place ordinance took effect in San Mateo last month. In the weeks after closing their dining rooms and general front of house, businesses like Vespucci — restaurants, coffee shops and fast-casual establishments — are struggling to remain viable without any of their usual customer foot traffic. 

For some, that means having to dramatically change operations just to make as little as 10% of their previous, average daily revenue.

“People are trying to keep their doors open, but it’s hard when you have so many restrictions,” said Cheryl Angeles, the president and CEO of the San Mateo Area Chamber of Commerce. “Restaurants usually make their money by people dining in, of course, and being able to have a cocktail or drink, and with takeout, they are losing all of that revenue.”

“They’re just hanging on by a prayer and a song,” said Angeles. “It’s hurting our local economy.”

Vespucci pivoted to take out orders, but pickup only, not delivery. Their food, such as pasta, sides of vegetables and desserts are made fresh every day, Fumasi said, and don’t travel well. She feels some delivery services are unreliable and take longer than expected.

Vespucci is lucky, she acknowledges, because of its good base of loyal customers. But some days are better than others for takeout, she said. There is no reliable rate of orders coming in. She was relieved that, using their own personal funds, they were able to pay their six employees during the last pay period. But she isn’t sure how long she and her husband can keep that up.

Coffee places

Val Sarabashyan, the owner of Kaffeehaus just a block over from Vespucci, has been facing a similar dilemma with his workers. Originally from Russia and having previously worked in IT, Sarabashyan opened Kaffeehaus a decade ago and currently employs three people.

“I’m putting in my own personal money to support my employees,” he said, who are already working limited hours. “I cannot continue doing this.”

Sarabashyan said he modeled his establishment to be like a Viennese coffee shop. Along with tea, coffee and pastries, he sells sandwiches, pasta, pizza, salad, wine and beer. He can no longer sell the wine and beer, which made up a huge chunk of his revenue. To compensate, he’s set up accounts with DoorDash, Uber Eats, Postmates and other similar delivery services.

“I’m banking that the only way out of this mess for restaurants is to deliver meals,” he said. “That’s the only path for survival we have.”

Another coffee business in downtown, 3 Bees Coffee on Third Avenue, has also signed up with food delivery services. But loyal customers still come by in person, so sometimes extra safety precautions are taken.

“Since we are a local business, sometimes the person waves from the outside and we know their drink, so we make it right away and give it to them,” said 3 Bees’ owner, Rafat Haddad. “In a way, we’re trying to make things sanitized, clean, eliminate the risks of spreading a virus.”

Haddad has owned his coffee shop for the last 18 years and considers himself very lucky because of his customers’ loyalty. During the first week that the shelter-in-place ordinance went into effect, regulars came in to check on him and see how he was doing. 

“That’s what makes a community,” he said. “Really, I was touched.”

Haddad’s sales have still diminished by about 40% to 60%, but he explained that his overhead is not as high as a restaurant’s. His big concern, he said, is having to potentially let his three employees go. His other location in the San Mateo Library is now closed, leaving an additional fourth employee without working hours. But his downtown location will stay open, he said. “As long as I am able to pay the employees, or pay the operating costs, or pay the vendors,” he said, adding whatever he makes, “it’s not profit. I’m trying to keep it even, you know, where it’s just paying for itself.”

Looking for loans

At Mordisko Banh Mi, formerly a pastry shop and now a sandwich shop just one street over from 3 Bees, owner Michael Tran is worried most about making his rent next month. His sales have gone down an average of 50%, similar to Haddad’s, but he has just one employee to worry about. 

“He can eat here seven days a week,” said Tran, adding he is also making sure he gets enough money to pay for his housing.

For Mordisko’s rent, and to maintain operations, Tran has applied for a $10,000 loan. 

“If I don’t get this loan from the government, I definitely will be in trouble,” said Tran, adding that like many small businesses, he doesn’t really have cash reserves. He said his application was filed last week, but he hasn’t heard any updates since.

Sarabashyan has been worried about rent as well, for this month and next month. He said he applied online this week for a $10,000 advance loan, along with another larger loan application related to disaster-relief via snail mail, and is waiting for more information from his bank before applying for a loan with the federal stimulus package’s Paycheck Protection Program.

“This will be a tremendous help, at least to re-evaluate, buy you time, to regroup and come up with a new strategy that will help your business survive,” he said.

Despite federal and local relief options in the works for these types of small businesses, rules and restrictions for various packages and loans have yet to be ironed out, and may not come out soon enough. Fumasi and her husband have been working to get a loan from the federal stimulus package for the past couple of weeks.

They decided to go with a federal loan, part of the Paycheck Protection Program, after talking to many people at the bank and even some of their regular customers with backgrounds in finance. They went to a private lender last week and completed an application online. Unfortunately, the process took some time. 

“They cannot file any application until they completely have a green light from Washington,” Fumasi said.

Their application was officially accepted this week and, despite the delay, Fumasi is hopeful that funds will come through within the next two weeks. But before that might happen, they are digging into their personal funds again to pay their employees.

Local help

Angeles hopes restaurant owners like Fumasi and her husband will take advantage of opportunities through the San Mateo County Strong fund, which is, “probably going to be faster than the federal loans,” she said. “It’s going to take a while for them [the federal government] to get organized and to get that money out.”

“There’s a lot of paperwork and a lot of red tape,” she said.

For county options, she advises small business owners to keep checking the Chamber of Commerce website for updates. There is also a grant program being spearheaded by Facebook and an upcoming town hall meeting for small business owners on April 29. She hopes that something will come at any time now, that at this point, it’s about trying to figure out how to organize everything, “rather than just saying, ‘Call this number,’ and then you’ve got 20,000 different people calling,” said Angeles.

“Stay tuned for that one,” she said. “I think that will happen rather soon.”

In the meantime, she said, “I think that all of us, that live on the Peninsula, need to support our small retailers.”

“I think if all of us really tried to concentrate on using those businesses within a three-mile radius,” she said, “that can help out a lot.”

Visit downtownsanmateo.org for a list of restaurants open and available for takeout or delivery.