Business & Tech

Jon Chesto|Chesto Means Business

Legislature’s $2M gift prompts some soul-searching in restaurant industry

Bob Luz says more should be done to promote this state’s status as a “great culinary destination.”
Bob Luz says more should be done to promote this state’s status as a “great culinary destination.”

House Speaker Bob DeLeo gave the restaurant industry a sweet gift this summer. But that present is going to take some time to unwrap.

At DeLeo’s insistence, the Legislature included $2 million in its budget for the current fiscal year to promote the restaurant industry. This was an unusual allocation, sparked in part by some high-profile closures — Durgin-Park, L’Espalier, to name just two.

The purpose was clearly spelled out in state law. How that money gets spent? That’s not quite so clear — at least not yet. A newly created industry task force, established by related legislation, will decide.

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Recommending the best ways to divvy up this windfall (coming from newfound casino tax revenue) was apparently not the most pressing agenda item for the commission, which includes a number of prominent restaurateurs, when it met for the first time at the State House on Tuesday.

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Instead, they talked about how they hoped to address some challenges that make it difficult for independent restaurants to open and survive around here, particularly in Greater Boston. A tougher job than deciding how to spend $2 million. But it’s another task required by the legislation.

Christopher Jamison, a partner in restaurants such as Lolita and Yvonne’s, pointed to the high barrier to entry: licensing costs, construction, real estate. Big chains have an edge here. Chef Tiffani Faison echoed those comments, saying it breaks her heart when tourists forgo local joints in favor of the national chains.

For Gallows Group president Rebecca Roth Gullo, a big issue is the cost of housing: She has employees who make six figures but can’t afford to live on their own in Boston, and she is struggling to fill job openings as a result of steep home prices here. And Kathi Turner of Turner’s Seafood pointed to the recent increases in the minimum hourly wage and tipped wage, and a new payroll fee for paid family and medical leave. All those new costs add up quickly, putting the squeeze on businesses with low profit margins. This “perfect storm,” to use her words, particularly hurts restaurants that aren’t in Greater Boston, and can’t ask diners to fork over $75 a head for dinner.

The commission is clearly headed on two tracks, to solve two different problems: figuring out how best to sustain the industry, and how best to promote it. The group is required to report back to lawmakers by the end of January after holding several meetings throughout the state, though it may seek an extension.

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This $2 million represents big money for any sort of tourism effort, at least around here, especially lately. Consider this: That’s more than the Massachusetts Office of Travel and Tourism spent to market the entire state for all of the last fiscal year. In fiscal 2019, the agency spent nearly $1.6 million from hotel taxes on tourism marketing for the state, mostly on marketing and public relations in 11 international markets. The 16 regional tourism councils also received $6 million, for more localized efforts.

Bob Luz, the chief executive of the Massachusetts Restaurant Association, imagines an initiative that highlights “the artists” in the business, telling the story of how food gets from the farm to the table in Massachusetts. More should be done, he says, to promote this state’s status as a “great culinary destination.”

That would help the top line. What about the bottom line? The concerns raised by restaurateurs in the meeting on Tuesday highlight issues Luz has been hearing for several years. He points to Bureau of Labor Statistics figures that show Massachusetts was one of only five states in which the number of dining establishments actually dropped in 2018 from 2017.

The decline here was small – the statewide number fell by 80 locations last year, to about 15,700, after several years of steady growth. But it is just one more data point Luz can keep in his back pocket as he argues that conditions are getting tougher for his members.

You might say the $2 million comes with some strings attached. The Legislature has prompted the industry to do some soul-searching of its own — an effort that may end up being more valuable than the monetary gift.

Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @jonchesto.