When restaurateur Ed Rudisell told us in May that half of the restaurants in Indy could close permanently within a year because of COVID, many people thought he was the boy who cried wolf. Less than four months later, two of his restaurants—Black Market and Rook—have joined a long list of local spots that couldn’t survive a shutdown and then reduced customer capacity, and shuttered their doors for good.
How are you doing?
I would say up and down, but there haven’t been too many ups lately. It’s crushing. I can’t sleep. I can’t think about anything else. How do I lay all these people off? How do I destroy their livelihoods? How do I clean all this up by myself? How do I liquidate everything? Who do I contact in the government? How can I get answers to my questions? It’s suffocating.
That’s a lot. How are you getting through the day?
I’m now the proud owner of antidepressants, Xanax, and all kinds of stuff. They’ve just loaded me up because I can’t get through the day anymore. It’s gotten to be too much. I’ve never felt like this in my life.
Is there any relief at all now that the closings are over?
No. We’ve been here for a decade and even though we’re closed, we still have invoices to pay. We still have utilities on because we still have to be in the building. I work 70 hours a week at Siam Square and don’t have time to liquidate a restaurant, much less two. Nor can we afford to pay someone to come in and do it. I’ve got to figure out how to close down 10 years of accumulated paperwork, chairs, tables, kitchen equipment, and tons of small wares and plates. It would take me weeks to do just a third of all of this. Where do we even start? We’re not just bleeding, we’re hemorrhaging badly. The only way to stop it was to lock the doors. At least then we can try to figure out how to make the bleeding stop.
What’s the situation with your landlords?
Honestly, the situation at Rook is that we are in default. We’re working out what happens to the equipment, but I suspect the landlord will end up owning it. At Black Market, we don’t owe the landlord money, but it’s the government we have to deal with on the debt. And then there’s all of our equipment. I don’t have anywhere to put two giant 14-foot communal tables, but I have no use for them. They were extremely expensive. I hate to chop them up, but if I don’t get an offer soon that’s exactly what’s going to happen to both of them.
You had four restaurants. How did you decide which ones to close?
We picked the ones where the money was draining the fastest. We had blown completely through our PPP loans. Then we had to get economic development loans and were burning that money at a rate that, if we didn’t close when we did, we would have doubled our debt load by December and still been closed by December 15. None of us really got a reprieve on rent. We didn’t get a reprieve on insurance premiums. We didn’t get a reprieve on anything. Every month, even when we’re closed, we’re still paying out $10 to $15,000 just on base-level utilities and overhead.
What are you hearing about potential help from the government?
Tax credits. Congress wants to keep talking about tax credits. That shit doesn’t help restaurants. Restaurants are the equivalent of living paycheck to paycheck. We are spending this week’s sales on last week’s inventory. We’re always gambling the future. When we get shut down, the bills still come for three or four weeks. And most of them are auto-drafted. Our alcohol invoices are auto-drafted. A lot of our food invoices are auto-drafted. The day after we closed this spring, everybody hit our accounts. All of our accounts were in the red the very next day. Usually we have two or three weeks to put some sales into the bank and get ready to pay those invoices. But when you cut us off completely from our revenue, everybody still has their hand out saying, We’re pulling $8,000 out of your account tomorrow, and I know there’s only $2,000 in it. Then guess what? The bank slams you with charges. They charge you every day your account is negative, plus all the overdraft fees. It just pours fuel on the fire. There’s a lot of talking points out there, and there’s a lot of politicians and agencies saying they’re here to help small businesses get through this so that we come out of it stronger than ever. But out of the other side of their mouth, they’re saying, By the way, don’t forget you owe me money.
How do you feel about how Mayor Hogsett and Governor Holcomb are dealing with small businesses during COVID?
Right now, I think the restaurant industry is being scapegoated. We have all these restrictions, but no one can explain to me where the data set’s coming from about big spreads in restaurants. The Inferno Room is open, but we’re at 50 percent capacity, and we have to close by midnight. Do they think people can only get COVID after midnight? We don’t really even get any business until 10 or 10:30 p.m. Then we have last call an hour later. At midnight we’re finally starting to put a little bit of sales up on the board and we have to tell everybody to get out or we could get fined and shut down. It makes no sense to me. You can still go to church. Kids are in school. We still have sports. We still have Colts games. We can still have all of this stuff, but the bar-and-restaurant industry has been blamed and taken the brunt of it, even though we’re the ones least financially prepared to handle that kind of situation.
What could Hogsett and Holcomb have done differently?
They could have stepped up and shown some real leadership in the beginning. Everybody floundered for months and months on masks while this virus spread like wildfire. It was a long time until anybody got any sort of a real threat of repercussions for not wearing one. We have to wear them. We have to sweat with this thing on our faces all day long, but if somebody comes into our business without a mask, Holcomb put it on us to tell them to please put their mask on. We have literally had customers say, “I don’t have to. The governor says you can’t enforce it.” So, yeah, we’re a private business and we can absolutely enforce it, but then that puts the onus on us. Now we have to be an asshole to somebody that’s a guest of ours. Why should it be our responsibility to govern? I’m not pleased with a lot of leadership on either side.
There’s a lot of fear about what the fall might look like with COVID. How are you feeling about that?
Well, numbers are shooting back up and patios are going away. Heated patios might help, but those things cost money and nobody is pulling money in. Our cash flow is nonexistent. Our limited capacities on the inside don’t help. We have an 8 percent profit margin when we’re at 100 percent capacity, so when the government limits us to 50 percent capacity, they’re literally telling us we’re not allowed to make money. But nobody wants to give us a hand. Everybody is playing politics because it’s an election year.
What were the last two weeks of business like at Rook and Black Market?
Turnout was absolutely insane every single night. Sold out. Sold out. Sold out. And the frustrating part is that if we could have had two days of that kind of business every week since COVID, the restaurants wouldn’t be closed. I’m not even saying we needed that much business every single day; just two days at that level every week for the last five or six months would have saved us. Once we announced we were closing, we couldn’t keep up. We had people waiting 45 minutes to get into Rook. Forty-five minutes! We haven’t been on a 45-minute wait since the first year we were open. And it’s like, Where have you been? If you could have come in two weeks ago, you wouldn’t have waited for a table and we would all be in a better position. Everybody talks big. Support local, eat local. We’re going to lose our restaurants. But at the end of the day, those people didn’t show up. We were doing $400 a day in sales. That doesn’t even pay for labor. So, it’s cool that people still love us. But it also pisses you off because if everybody had paid attention when I was screaming in May, things would be different now. I live on the south side and when I drive by a Chick-fil-A, I see that you can’t even get into their damned parking lot because there are so many cars. People line up to get a fried chicken sandwich from a chain, while we’re over here begging them to come out a couple of times.
Knowing what you know now, is there anything you would have done differently earlier in the pandemic?
Honestly, we probably would have wrapped things up sooner at Black Market. We got deeper into other loans after the PPP, and that is something I regret. But I really thought we were going to make it. I thought we were immune to it because we had a good concept. And even though we weren’t packed, people were still coming in. But then we started doing projections for the third quarter heading into fall and realized we were beyond sinking. We were already underwater. If you’re burning $300 or $400 a day at multiple locations, you’re burning $1,000 a day. We came to a point where in two and a half months, we burned through $100,000. Gone. Just gone. We didn’t buy anything. We have nothing to show for it but debt. And I hate debt. The reason we’ve stuck around so long is because we stayed small. We did things the right way. I don’t borrow. I could have a fancier dining room and do all these other things, but I just don’t like being in debt. In January, we had no debt. Now we’re drowning in it. And there’s no way to know when it will end. If somebody could say, This will all be over by February 1 and COVID won’t be an issue anymore, I would have begged, borrowed, or stolen whatever I needed to get through to February 1. But we have no guarantee that this thing is ever ending. It may be a seasonal thing we’ve all got to deal with from now on.
Do you have a Plan B if you have to close your other restaurants?
I’m 44 years old. Other than two years in another business, I’ve been working in hospitality since I was 16 years old. There is no Plan B. The plan is to try and keep Siam Square and The Inferno Room rolling as hard as we can for as long as we can. People keep asking if Siam Square and The Inferno Room are safe. I don’t think anybody could say they’re safe. Some restaurants are better off than others, but very few are making money. I have people pulling up to Siam Square and thinking we are still busy. Four cars don’t make us busy. It makes me busy because I don’t have any employees to help take the bags out to them, but it doesn’t make the restaurant busy because we have 28 empty tables on the inside.
What are you hearing from your colleagues in the restaurant business?
I have several very high-profile friends in hospitality around the world because of my podcast, Shift Drink. They’re known for having some of the best bars in the world, and I’ve been told in confidence that they aren’t going to reopen. They either avoid media interviews entirely, or they put on a happy face and say they’re going to come out of this as best they can. But behind closed doors most of them don’t know how the hell they’ll ever make it back open.
Why are the risks for closure so high now?
Because the loans are just now starting to run out. You and I talked about this exact thing in May. I said that in the fall, the money will run out. And it is. Even though things opened back up again, they’re starting to close because the money is gone, so unemployment numbers will go back up. We’re already seeing a second wave of unemployment. I’m not some genius economist, but it was easy for anybody to take a step back and see how bad this could get. Independent restaurants make up the bulk of restaurants in this country. If we all start closing and laying people off, we’re going to see something that we haven’t seen in our lifetimes. I would never have thought we’d be looking at a second Depression, but if there isn’t a solution soon, I don’t know any independents that will make it through the next nine months.
What can supporters of local food do today to help save the industry?
There are three things I’m telling people to do right now. One, just wear a mask when you go into a restaurant. Please don’t argue with people over it. We don’t want to wear them either, but let’s do what’s necessary to stop the spread of this virus. Two, go to the places you love because they may not be around much longer if you don’t. And I don’t mean go once every five months. Go in as often as you can because it’s what’s keeping us alive. And the third thing I’m really begging people to do is get involved with a grassroots organization called Thirst Group. It’s working to save the restaurant industry by pressuring insurance companies to make good on their promise to pay out for work stoppages. Not one single insurance company has paid out for business stoppage during the pandemic. Not one. And people don’t realize how much we pay a month for insurance. It’s not $600 a month. It’s thousands and thousands of dollars every month. And that’s to cover us if we are forced to close down by outside circumstances. So, if the city cuts through our sewer line and has to shut us down, the insurance pays out what our revenue would have been so we can pay our employees and the restaurant can pay its bills, and everybody stays open. But they added ambiguous verbiage and won’t pay out for pandemics. Thirst Group estimates that the commercial insurance industry is sitting on around $8.5 billion in cash reserves, and if they were to pay out the claims that have been denied to restaurants and hospitality businesses, that total payout would be in the neighborhood of $3.5 to $3.6 billion. Even if they paid these claims, the commercial insurers would still be left with $5 billion in reserves. That’s billions with a B. Yet nobody is getting paid. So I’m really encouraging everyone to go to the website to sign up and see how they can help. You don’t have to work in restaurants to volunteer for the cause. I would love to do more myself with them, but I’m working too many hours and trying to liquidate two restaurants. It’s one of the few things that could really save the industry.
Do you have any predictions about who might be next to close locally?
Honestly, there’s no way to know and that’s the problem. We’re all in the same boat and it could be anybody. It could be the place that you think is killing it. But you don’t know what their rent is. You don’t know what kind of relationship they have with their landlords, what their tax or debt situation is. You have no idea. It could be a little mom and pop. It could be 200 mom and pops. Or it could be Applebee’s. It’s going to be across the board. This isn’t going away. It’s just the beginning.