Grant interest shows ‘there was a clear need across the county’ for relief for local restaurants

By Kevin Haas
Rock River Current
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• Grants to cover skyrocketing unemployment insurance costs open until March 28
• Applications are HERE

ROCKFORD — Franchesco’s Ristorante saw its unemployment insurance costs increase by a multiple of 10 after the coronavirus pandemic.

The Italian restaurant, a staple in Rockford since 1986, is one of numerous local eateries looking for relief after taking a financial hit because of layoffs made during state-mandated restrictions on indoor dining during the pandemic.

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A little more than a week after grants were announced to provide relief to restaurants in Winnebago County, officials administering the grant say they’re getting a better sense of the scope of the issue.

“What we are seeing so far is that definitely there was clear need across the county in full-service and limited-service restaurants beyond those that were the vocal and visible face of this crisis,” said John Groh, president and CEO of the Rockford Area Convention & Visitors Bureau, which is in charge of the grant process.

The problem boils down to this: The state had frozen all increases in unemployment insurance rates during the pandemic so that business owners wouldn’t be punished for layoffs made because of state-mandated lockdowns and restrictions. However, that freeze ended before restaurants could fully reopen in this part of the state. That led to many restaurants seeing their rates spike.

For example, Frachesco’s, which employs about 125 people, watched its rate go from 0.625% to 7.85%. That means the annual bill jumped from roughly $8,000 to $9,000 per year to roughly $90,000 last year, according to Michelle LaMay, general manager of Franchesco’s.

It’s an expense that adds to the burden of higher food and employee costs that have put restaurants that already operate on slim margins in a bind.

“That’s huge. That’s an enormous part of your profit,” LaMay said. “This is just an additional expense that it’s hard to recover that kind of money.”

Franchesco’s is one of many who reported increases in their rate from below 1% to 7% and higher. The multitude of factors affecting restaurants bottom line have made unemployment costs a particularly tough hit.

“You come to a point where you want to make things affordable for your guests and you still want to maintain running your business,” LaMay said. “It’s become very challenging.”

The owners of restaurants including The Norwegian, The Olympic Tavern and Lucha Cantina started bending the ear of state officials on the issue roughly two years ago. It led to state Rep. Maurice West, a Democrat from Rockford, securing $1.5 million in the budget for restaurants here to apply for relief.

Groh didn’t have a total number of applications since the grant was announced Feb. 26. He said the bureau will release details of applicants and money awarded to each once the application process is complete. However, he said the first 10 days have shown the need went beyond the restaurants that raised the issue in 2022.

“While there’s a handful of restaurants that have been vocal in their advocacy on behalf of this issue, they were really speaking on behalf of a multitude of restaurateurs,” Groh said. “Seeing the applications that have come in, it has become even more apparent to me that this is an issue that was pervasive and impacted restaurants throughout the county.”

Applications are being accepted until March 28, and the first awards are expected by the end of April. The maximum amount a restaurant can receive is $100,000. Groh and his team are working to spread the word so that no restaurants miss the chance to apply.

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Groh is also also keeping West, who is in session with the state House in Springfield, aware of the developments. Gov. JB Pritzker presented his budget last month, and lawmakers are expected to vote on a budget before the end of May.

“I will be making sure that Representative West is aware of whether or not the current allocated funds are sufficient to meet the needs,” Groh said.

How to apply

To learn more about the restaurant relief grant program and access the online application portal, go to gorockford.com/restaurant-grant.

Questions about the program should be directed to RestaurantGrant@GoRockford.com.

Eligibility requirements

1. The restaurant’s principal place of business is located within the geographical boundaries of Winnebago County, Illinois.
2. The restaurant complied with the indoor dining closure mandates enacted by the state of Illinois during the first quarter of 2021 via executive orders 2021-01, 2021-02, 2021-03, 2021-04, and 2021-05.
3. In complying with indoor dining closure mandates in Q1 of 2021 the restaurant laid off staff and, as a result, has
experienced an increase in state unemployment insurance charges.
4. The restaurant incurred and/or will incur a higher rate of state unemployment taxes in 2022, 2023 and
2024, because of the higher unemployment benefit charges in Q1 of 2021.
5. The restaurant remains operational today.

This article is by Kevin Haas. Email him at khaas@rockrivercurrent.com or follow him on X at @KevinMHaas or Instagram @thekevinhaas and Threads @thekevinhaas