AVL Watchdog: Katie Button is ‘scared of losing everything’

‘THE WORLD LOOKS VERY DIFFERENT’: Asheville chef Katie Button at work before COVID-19 changed everything. Courtesy photo

Asheville’s celebrity chef Katie Button describes the challenges and stark realities facing her industry and business since closing her renowned restaurants Cúrate and Button & Co. Bagels on March 16.

By Katie Button as told to Sally Kestin, AVL Watchdog

It’s really surreal, and I think that on a day-to-day basis I feel differently about it, whether that’s sadness or anger or hope. We have spent the past nine years working really hard to create a restaurant and hospitality group that functioned, that was able to support a team of 140 employees, was able to offer that team unprecedented benefits like novel ideas around health insurance and direct primary care and paid time off and sick days, and wages that were a living wage to everybody. It felt so good to be able to have a business that was operating, that was generating enough revenue that allowed us to explore other new businesses like the bagel shop and an events space.

The scary thing now is that all of that is in jeopardy, everything that we have built and created is basically all thrown out, and we have to start all over again.

We had to lay everybody off, every single person from the top to the bottom. This is something that the public can be a little bit confused about because it can seem, it’s like, well, why can’t they float and pay their payroll until they’re able to reopen? Restaurants are not meant to operate — they cannot operate — with zero revenue coming in. There’s a small profit margin. A lot of dollars might come and flow into our spaces, but 90 percent of those flow right back out to vendors, farmers, staff. We’re not sitting on dollars or money that floats us. Nobody is.

If we were going through a normal recession, we would see a decline and decrease in sales and people coming in, and we would adjust that by reducing our food costs and labor. When it comes to a stop, what’s happened is you’re left with all the bills from all the costs of goods … that you’ve already purchased, that are sitting in your walk-in, that you cannot sell, and an entire payroll. Most restaurants had to then work very quickly to stop all outflow of money. We were doing things like canceling our company credit cards to avoid recurring software fees. You’re calling your subscription services.

You pay for something called business interruption insurance, and that’s because you know that running a restaurant that there’s no way you can survive a day without revenue coming in. So, if a hurricane or other major natural disaster came in and ended business that abruptly, you would be covered. The insurance does not cover pandemics. It’s an exception in their clause.

The SBA (Small Business Administration) has deferred some of our loans that we’ve had with them for six months, which is great. Our bank is working with us. It’s a little bit challenging. While we can get our mortgage deferred, there’s some loans and things that they’re willing to defer interest, but not principal. If we defer these things, how long will we have to pay them back?

Everybody’s saying to enroll in Paycheck Protection Program, which is through the CARES (Coronavirus Aid, Relief and Economic Security) Act. You get an eight-week loan forgiveness, so if you use those expenses on payroll, utilities and rent, you don’t have to pay back those portions of those loans, which is great. But if I apply today and I get funding next Monday, for example, and then I get this, which requires me to bring back my employees and pay them over this eight-week period, there’s a large section of this time where they will not be able to work. And if it lasts until July, we need forgiveness on all expenses through that time period, and then we really need this Paycheck Protection Program, these eight weeks to help us ramp back up to start working again, to happen in the timeframe that we would be able to reopen.

So when the government goes out and says that they feel comfortable for the public to go eat out in restaurants and bars, that’s when this Paycheck Protection Program should be applicable for restaurants. Because before that, it doesn’t make any sense, and it doesn’t help. It’s like, I can hire all my teams back but then what, in eight weeks I have to lay them all off again and close?

Worst-case scenario is that we end up saddled with so much debt and monthly debt payments that are due without enough revenue coming in to be able to afford the debt service and the cost of labor and goods to make the whole equation happen, that we would have to shut it all down and file for bankruptcy. I mean that is worst-case scenario.

To be honest, if we don’t get the right help on our loans from our banks and lenders, we won’t be able to pay our bills and we will be in default of our loans, and that’s when it all crumbles. That is the fear. And even though we’re thinking of creative ways when we come back up to create alternative lines of revenue, whether that’s delivery or takeout or online ordering of products, or getting to grocery stores certain products, the reality is that the equation has been entirely messed up.

On a scale of 1 to 10, like extremely worried is a 10, and 1’s not worried at all, I’m a very optimistic person, but I’m probably feeling in the 7 or 8 range of amount of worry. I don’t think there is a single restaurant owner out there in the world that is not scared of losing everything.

If you let your mind spend too much time in the worst-case scenario, then you’re kind of crippled in action, and all that we can do is do our best to react and adjust, but we’re all going to be facing those conversations and questions and realities at a variety of different points along this journey. It’s frustrating to have created something that worked and the whole cycle it supported — the businesses, the community, the employees — and then to have it all just erased is really scary and frustrating.

I don’t know how many restaurants in Asheville are going to make it or not make it. The grim truth is that I don’t know. Everybody’s going to be talking very seriously about what changes do we have to make to survive, and then we can set at rebuilding back to where we were before this happened. But it’s going to be a longer-term plan.

It is about making it a year, which is a long time. But I’m feeling like tourism and people traveling and really feeling comfortable eating out again is going to take until there’s a vaccine. I think until then, hopefully healthy people are eating out and supporting our local economy and businesses so that we can be there to see the next day. As business owners, what we have to do is look at: How do we survive until next year, through whatever waves are coming our way?

The world looks very different, and I think that it will for a while. It’s not going to be an instant comeback, and everybody’s out and about and celebrating. I think it’s going to take us time, and I don’t know what that means for the restaurant industry.

Independent restaurants — we are separate, we are diverse. Yes, we employ 11 million people in this country, but we don’t have a unified voice. We have nobody in Washington looking out for our success or best interests. There is a group called the Independent Restaurant Coalition, which has a website saverestaurants.com, and I encourage anybody to follow them and support and sign the letters that they’re creating, but we don’t have as loud of a voice as the airline industry, the cruise industry. We feel very much like we are left alone to figure this thing out and that it could cripple a very large percentage of independent restaurants.

I think that we need to not be quiet about our potential failure. This is nobody’s fault. It’s nothing to be embarrassed about, and in the months to come, there may be a day where I have to sit and face some very dark realities.

I’m a person who likes to act and move, so I’m thinking: What are the possible revenue streams? If, when we reopen, people aren’t dining out, what can we do? How much revenue are we doing, and do we need to decide to channel our efforts, and, I don’t know, go different routes of business or eliminate some lines of business? We were working on opening an events space. That kind of doesn’t feel like a good thing to be focusing on right now. How many events are we going to be booking this year?

When we first made the decision to close our restaurants, it was devastating, and we felt like the future was unclear. Then I went through a period of time where I was feeling pretty good about the aid that was coming our way through the CARES Act, and we were starting to feel more positive and we were planning and talking — and now that the reality of applying for the CARES Act is here, we’re seeing all the holes and how it doesn’t fit our business and how it’s not really supporting independent restaurants, and so you’re back in that place where you don’t know and you’re scared and confused, and it’s kind of this crazy rollercoaster. I’m trying to think: What do I know today, and am I doing everything I can today? Tomorrow is going to be a different day.

AVL Watchdog is a nonprofit news team producing stories that matter to Asheville and Buncombe County. Sally Kestin is a Pulitzer Prize-winning investigative reporter.

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21 thoughts on “AVL Watchdog: Katie Button is ‘scared of losing everything’

  1. John Tripp

    I don’t live in Asheville anymore, having made the move to Savannah last year. You can only imagine how devastated this town is, quite literally a ghost town now. It pains me to read Katie’s words, because I literally remember seeing Curate’s space go up. I sawKatie outside the space many days as I was walking down Biltmore Ave. to work and she was eagerly working on the space with various people. I saw the letters going up in the window, and I thought, this is a new Asheville I’m witnessing here. As someone who lived in Asheville off and on since the ’90s, I can attest that people like Katie took the city to a whole new level. I remember Asheville when there was a mere smattering of restaurants downtown, there was one brewery, Highland. Downtown was pretty much dead but for a few venues. I am not writing this to say “I remember when…”, I’m writing to give credit to the hard work so many put into making Asheville one of the best small cities in the Southeast. Granted, there are those that will say tourism change Asheville for the worse, but what may I ask would’ve made it as dynamic as it is without it? Asheville went from a sleepy little hippy town to an national destination. And this didn’t magically happen, it came with great effort and risk from every small business person that made the city pulse. A lot came and went, sadly. But nobody came into Asheville without passion and a desire to be a part of something special. I am truly sorry, and mainly infuriated, that this has sudden downturn has happened. Our leaders in federal government let us down by not addressing the threat this coronavirus was. We are all suffering because of poor leadership at all levels of government. It will take years to get beyond this, if that’s even possible. I think the only thing we can do right now is try to build new ways of living, by letting a lot go that will never come back, by really looking at politics and who is going to lead us out of this travesty. If there’s any hope, it’s with a new administration that will take an active leadership role in putting people back to work and building a future that is sustainable. For now, we’re all in shock, many don’t even know how they’ll eat or pay rent. I’m close to that point myself. I hope Asheville can pull through this, but I know it will never be the same. At the same time, we’ve been through far greater catastrophies and somehow here we are. Humans didn’t make it this far by being afraid of facing loss and change.

    • Lulz

      Problem with your thinking is you assume downtown became something that benefitted all of Asheville. Maybe in your clique it did but ask the locals if they even feel welcomed there. If they don’t survive can it be because their business model relied too much on tourism instead of those that live here? Kinda hard for someone who lives here to eat at her restaurant. They can’t afford it. Say where in downtown can I buy a fridge, get parts to fix my car, or even get a cheap hot dog anymore? I can’t. Because those types of places were pushed out for overpriced food, beer, art, and some guy in a motorized recliner going up and down the streets. So for me and I’m sure many others it’s hard to empathize with outsiders who came here, opened up shop to make money off of other outsiders and then wag their finger at locals telling us all how much better downtown is now compared to whenever, It’s not.

      • John Tripp

        I feel what you’re saying but don’t blame these entrepreneurs that took an essentially abandoned downtown and made it vibrant. If you want to blame anyone, blame WalMart, Amazon, Trader Joe’s and all of the companies that gutted local economies. Don’t blame small businesses, they keep their money local. The Walton family alone has transferred $50 billion out of local economies into their bank accounts. I can say with confidence that Katie Button and any other local business owner is probably paying most of their money locally. They are on your side.

      • luther blissett

        “Say where in downtown can I buy a fridge, get parts to fix my car, or even get a cheap hot dog anymore?”

        1982.

      • indy499

        In 1992, the downtown association took on a project to encourage ONE restaurant to be open for dinner in downtown Asheville. Never obvious to me if/when the good old days you long for actually happened. Was it one day in 2002 or so that was just right for you? World doesn’t work that way.

  2. Mark Lieberman

    I interviewed Katie a couple of weeks ago for WPVM 103.7 fm and she expressed many of the same concerns. (Please go to WPVM Facebook posts or Mark Lieberman’s Facebook posts to view the Katie Button video interview). However, I totally understand her more pessimistic tone. She is an Asheville original, and if any small business can survive the pandemic, she’s the one. Unfortunately, the calamity we are seeing is not just the virus itself, but the incompetence and partisanship of our Federal government’s too little, too late response. Its frustrating inability to the deliver the aid that our restauranteurs and other small businesses need to survive. Let’s be ready to do everything we can to make the government more accountable and to be there support these important businesses as we move though the gradual recovery.

  3. C-Law

    We now know by an unbroken string of serological surveys that anywhere from 10 to nearly 100 times as many people have had this virus as the so-called “results of testing” show. This instantly proves two things — mitigations are worthless as the virus is both too widespread to be stopped and wasn’t stopped by the mitigations and, arguably at least as bad, the death rate of anywhere from 1/10th to 1/100th that being promoted.

    The latter makes this nothing more than a bad flu. Yes, it’s a bad one, but it’s a flu. It’s not a catastrophe, it’s not the end of the world and it certainly is not worth shutting down the economy over and never was.

    I’ve said it before and I’ll say it again—Asheville and Buncombe and by extension the entire country has gotten exactly the government they deserve!

    You will live under the tyranny you tolerate…

    RIP AVL…died from health scare virtue signaling.

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    • bsummers

      “Health scare”? Covid-19 is not the flu.

      And the fatality rate is almost certainly way higher than what they’re reporting. Most Covid deaths are only reported as such if they had a positive Covid test. A study released today looks at “excess deaths” – the deaths outside the predictable number of deaths per day. Mid-March, there was a huge spike in deaths that weren’t counted as Covid-related.

      “New York City, which has been hit hard by the virus, recorded 6,300 excess deaths in the five-week period, while the city publicly reported 2,543 coronavirus deaths. Its neighbor New Jersey found there to be at least 2,100 excess deaths, while reporting 846 COVID-19 deaths.”
      https://thehill.com/policy/healthcare/public-global-health/494834-us-total-death-rate-spiked-above-coronavirus-death

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      • John Tripp

        this same guy has been posting dribble for god only know how many years.
        drink some bleach why doncha?

        • bsummers

          Dribble = Opinions you don’t agree with?

          Thanks. I needed that. As always, I accept invitations from people like you to kill myself as a sign I’m onto something. Are you the John Tripp who’s a local designer who does a lot of work for tourism-centric businesses? If so, I don’t fault you for that. But it used to be common that if you had a financial stake in an issue you were commenting on, you’d disclose that.

          • C-Law

            Not so fast B-Summ, I’m pretty certain Tripp was referring to me. I too, wear the jabs and jibes as a badge of merit! ha! :)

      • indy499

        You keep asserting this drivel that the fatality rate is higher than is being reported. Complete nonsense as all studies completed thus far indicate the denominator in that calculation is many TIMES the number of cases being reported.

        And I’m not your research assistant. Maybe try google. Search some notable righty media like the NYT and the Washington Post.

  4. Bright

    “Problem with your thinking is you assume downtown became something that benefitted all of Asheville. Maybe in your clique it did but ask the locals if they even feel welcomed there. If they don’t survive can it be because their business model relied too much on tourism instead of those that live here? Kinda hard for someone who lives here to eat at her restaurant. They can’t afford it.” -Lulz She should relocate to where residents can afford her.

    • Johnny to the A

      “She should relocate to where residents can afford her.”

      The dining price point for a large percentage of locals is 12 Baskets Cafe. There is no industry and there are no jobs. You’ve made your choice – to stay and complain. You could relocate and enjoy a higher standard of living with more employment opportunities and lower taxes elsewhere. You are to blame for your predicament.

      Without the collateral benefit of the tourism economy, most locals would only increasingly continue to be crushed – and simply forgotten – below the boot of those with more resources.

      Take three part time jobs bussing tables and call me in the morning.

      I wish Netflix would create a series based on Asheville. The cast would be eerily similar to Tiger King.

  5. j

    My feelings about this are very conflicted; I really really appreciate living in a tourist town. Yes there are pros and cons, but I love the fact that we have amazing venues, restaurants, shops, And amenities relative to the size of the city. I feel people like button are both blessed and cursed. She’s blessed to have the passion to do what she’s done, but cursed because things like this are par for course with restaurants. Razor shred profit margin‘s, incredibly difficult to manage, ever changing economic landscape, and enormous competition… it’s just a horrible business to be in Regardless of a pandemic. It’s always an uphill battle.

  6. Johnny to the A

    Maybe if Button didn’t expand Curate’s footprint her financial resources would be more extensive. Additionally, the bagel storefront in a terrible location was simply an ego based decision. Not a prudent business move.

    A rising tide lifts all boats, even those that are unseaworthy. Prosperous times make many appear successful until challenging times arise. COVID19 may (or may not) be a once in a lifetime pandemic but black swan events are not. Economic crises occur with great predictability. The initial catalyst is the variable.

    The suffering has only begun.

  7. Curious

    Is yet another story about Katie Button and the restaurant businesses in Asheville the best that AVL Watchdog can do? The perhaps impending implosion of Mission Hospital as Asheville’s trusted health system seems more pressing. Asheville is ready for serious investigative, analytical, probing journalism, but will AVL Watchdog fill that slot?
    Is it time for Cecil Bothwell to return to journalism?

    • Enlightened Enigma

      She is the reigning queen of AVL restauranteurism…she is amazingly successful and I LOVE her Curate’ store…but this is a plannedemic so we must never let a good crisis go to waste when the controllers are taking over the country, right?

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