San Mateo County restaurants make do with restrictions

So naturally, when asked if they’re open for indoor dining, Hinamatsu pauses for just a beat before saying “No.”

On Feb. 24, San Mateo County entered the red tier for reopening and permitted restaurants to reopen indoor dining at 25% capacity. On March 17, it entered the orange tier that allowed for 50% capacity indoor dining. But for some restaurateurs in the area, the announcements came with a mixed bag of increased risks and financial complications.

Safety has been a top priority for Hinamatsu ever since the pandemic began last March — and not just because she operates the restaurant with her elderly mother, Yoko Kondo.

“It’s like drunk driving. It’s reckless and unpredictable,” Hinamatsu said. “You might maybe hit a lamp pole, or you might hit a bunch of cars. It’s not just about you.”

She’s referring to the fact that COVID-19 affects people in vastly different ways, including the potential for long-term neurological damage. So cash, coins and credit cards are sanitized before they’re handed back to the customer. Numerous “no mask, no service” signs are placed throughout the restaurant.

And because the restaurant is located in a residential neighborhood and families often stroll past, Hinamatsu chose not to introduce outdoor dining — even though they’re losing money by operating as a takeout-only establishment.

“Anything that is going to potentially endanger other people and the neighborhood, I’m not going to participate or encourage other people to do that,” she said. “We have never done outdoor dining, and we’re certainly not doing indoor dining for a long time.”

That isn’t changing for the foreseeable future, even though she and her mother have both been vaccinated. Hinamatsu points out that it’s impossible to know who is or isn’t vaccinated, meaning that allowing customers to mingle could put others at risk.

“I have to go to sleep at night knowing that I did everything that I possibly could,” Hinamatsu said. “If anyone got sick, I have to know that I didn’t let that happen. That’s too much guilt for me.”

“And that’s very bad karma,” she added.

For some restaurants, reopening indoor dining at reduced capacity is hurting more than it’s helping.

Broadway Masala in Redwood City has experienced its fair share of challenges, including a devastating fire in 2015 that forced a two-year recovery period. But nothing could’ve prepared owner Anupam Bhatia for a public health crisis that led to a year of slashed sales and staff layoffs.

“At one point in time, it was [deciding] whether to pay salaries on time or pay the rent on time,” he said.

Adjusting to outdoor dining was difficult as a restaurant popular with families, Bhatia said, because children and the elderly are more sensitive to cold weather. Sales dropped by as much as 50% in the beginning of the pandemic before stabilizing this summer due to increased support from the community.

Just as the restaurant was beginning to break even, San Mateo County announced that restaurants could reopen for limited indoor dining. While Bhatia was happy to be able to rehire staff and give them earning opportunities, he says he lost money on the increased labor costs.

“At 25% capacity, you don’t get very many people dining in. But then to live up to their expectations to give good service, you got to add on three, four more staff members,” he said. “Your payroll goes up, but your revenue remains the same.”

Bhatia sees the expenses as a necessary evil. He’s worried about the potential of losing visibility within the competitive restaurant industry and losing his loyal customer base, many of whom dined in at the restaurant as often as twice a week in normal times.

“In the end, it’s only the business that has to bear all the costs,” he said. “But it’s what we have to do.”

With the recent expansion of indoor dining to 50% capacity, Bhatia estimates that Broadway Masala can finally start breaking even again. For the moment, he remains cautiously optimistic because the restaurant won’t be able to profit until it can reopen at 75% capacity.

But Bhatia acknowledges that he’s one of the lucky ones — he’s managed to get through the worst of the pandemic without accruing rent or bill debt.

For other restaurants, the past year’s numerous reopenings and shutdowns have forged an uncertain path forward.

Before the pandemic, San Mateo’s Espetus Churrascaria regularly drew crowds of more than 2,000 every week for its all-you-can-eat Brazilian barbecue feasts. The restaurant’s appeal is as much about the food as it is about the experience: Waiters bring endless portions of steaming meat impaled on iron rods to each table and slice generous morsels directly onto patrons’ plates. The concept was never designed for takeout or delivery.

“We decided against [takeout or delivery] because that would affect the quality of our food significantly,” said general manager Thays Klein. “And that really put a lot of pressure on us because there is no income. We were literally shut down.”

Indoor dining became a lifeline for Espetus — one that proved to be tenuous and unpredictable.

The restaurant shut down last March and reopened for indoor dining in June for just three weeks before the second shelter-in-place order was issued. It then reopened in late October, only to be shut down again just before Christmas.

In early February, Espetus was finally able to open for outdoor dining after spending over $10,000 on heating equipment, fencing and permits from the city to build a parklet. But the damage was done: The restaurant was months behind on rent and nearly $100,000 in debt for vendor expenses.

“With the [all-you-can-eat] concept we have, we have to spend the same amount of food or labor if we have 50 people or if we have one person coming in,” Klein said. “We have to be prepared no matter what.”

She adds that Espetus prides itself on serving the freshest and highest quality produce and meat, meaning that every abrupt shutdown led to tens of thousands of dollars in inventory losses.

“My job for the first couple of weeks we were open was basically to call all our vendors and ask them to put us on payment plans,” Klein said. “We’re pretty much on payment plans for every single vendor that could extend that to us.”

The restaurant’s normal capacity of 255 was reduced to just 30 for outdoor seating. By February, Espetus was hemorrhaging money just to keep the doors open.

At the time, customers were calling every day to inquire if the restaurant was permanently closed. So despite operating at a loss with just outdoor dining, Klein and management made the difficult decision to stay open to avoid losing loyal customers and visibility in the restaurant scene.

When Espetus was permitted to reopen indoor dining at 25% capacity, increasing its capacity from 30 to 130, the restaurant broke even for the first time in nearly a year. With the recent expansion to 50% capacity, they’ll be able to start making a dent on a year’s worth of debt valued at over $300,000 — and finally start moving forward.

Despite the past year’s endless challenges, Klein is unequivocal when I ask if she thinks Espetus will survive.

“I believe in my product, I believe people enjoy it, so we’re going to keep doing what we’ve always done and serving the customers the best we can,” she said. “And hopefully, it’s going to pay off.”