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How the Reopening Loophole to Save Texas Bars Became Another Stumbling Block

Rule changes from Texas’s alcohol governing body to let bars reopen as “restaurants” were supposed to be a lifeline. Instead, they stumped bar owners. 

Jara stands outside his bar, the Marquis II
| Brittanie Shey/Eater

In August, Al Jara was in the process of figuring out how to lease and operate a food truck. The idea was that the truck would allow him to apply for a new permit so that his bar, the Marquis II, could reopen as a restaurant following a new waiver issued by the Texas Alcoholic Beverage Commission (TABC). The bar had been closed for months due to Texas’s efforts to mitigate the spread of the coronavirus, even as restaurants were allowed to reopen, increase their capacity, and fill patios with patrons. After more than 60 years as a bar, the Marquis was going to become a restaurant too.

Then, the rules changed again.

On August 25, two months after bars were forced to shutter, the TABC passed an emergency resolution to waive a rule that allowed only bars with permanent kitchens to reopen. Jara could open his business by partnering with a food truck instead of leasing his own, an opportunity that seemed, to him, both faster and more affordable. But the process was decidedly more complicated than just teaming up with a great food truck. Now, Jara had to spend nights calculating what portion of food sales to include in his reporting to TABC and fielding complaints from the bar’s neighbors that he was operating illegally.

Texas’s convoluted and archaic liquor laws have always presented barriers for bars, breweries, and restaurant owners. In the wake of the coronavirus pandemic, waivers like those that Jara hoped to take advantage of just created more headaches and confusion. And as Texas Gov. Greg Abbott continues to blame bars for the spread of the virus — and not, for example, state government inaction on masking regulations or Texas’s premature reopening — struggling bar owners are deeply frustrated. They’re also having to make difficult choices on how to stay open, keep employees safe, and alter the way they do business as the pandemic stretches into its eighth month.

The complexity and constant churn of these rule changes have left drinkers and bar owners without the answers to some really important questions: What is the practical difference between a restaurant and a bar? And if bars can reopen as “restaurants,” what was the point of closing them in the first place?

“The rules have changed almost daily, and what’s even worse for us is that the community doesn’t actually know what the rules are,” Jara says. “It’s become arbitrary.”

Jara enlisted local trucks like Muishii, pictured above, for service over the past few months
Marquis II/Facebook

The shutdown began for bars on March 19, when Abbott issued an executive order closing dine-in service at all eating and drinking establishments across the state. Just six weeks later, on May 1, even as cases in Texas continued to rise, restaurants were allowed to reopen at 25 percent capacity. From there, it was a steady trickle of reopenings, with bars resuming service at 25 percent just before Memorial Day weekend, and increasing to 50 percent on June 5.

After one short month, everything came to a screeching halt. Abbott ordered bars to close for a second time on June 25, while restaurants were required to decrease capacity to 50 percent.

“At this time, it is clear that the rise in cases is largely driven by certain types of activities, including Texans congregating in bars,” Abbott said in a statement announcing the second shutdown. It’s a sentiment he’s repeated often, including as recently as late September, and one that has riled bar owners throughout the state. A statewide bar alliance sued Abbott over the closures in June, and, in July, a group of Dallas-area bar owners also filed a suit against Abbott.

Throughout the first closure, Texas officials created a series of concessions for bars to operate on a limited, takeout basis, first allowing cocktail kits to be sold with food, then permitting premixed drink sales. At first these concessions were seen as a progressive step, especially in a state where so-called “blue laws” have made it so confusing for drinkers and bar owners for decades. But as more waivers were enacted, more confusion ensued. The new rules required that drinks be sold with food, but did that mean prepared food? Would a 50-cent bag of chips suffice? And what, exactly, constitutes a “permanent kitchen?”

In late July, the Texas Alcoholic Beverage Commission issued yet another change in the rules. The organization announced that it would allow bars to apply for reclassification — and thus reopen as restaurants — if they met certain conditions. At the most basic level, liquor permits in Texas can be divided into two categories — bars, which make more than 51 percent of their revenue on alcohol sold for on-premises consumption, and restaurants, which make less than 51 percent of their revenue on alcohol. Here, on-premises consumption refers to drinks consumed on the spot as opposed to taken home, like the to-go drinks some bars have been serving while closed.

In order to reopen as restaurants, bars had a couple of options: prove either that less than half of their sales since April 1 had been alcohol for on-site consumption, or provide a projection of the next 120 days of sales showing that alcohol sales would account for less than 51 percent of revenue.

That’s when Jara decided to go with his original plan and just open his own food truck, which would be parked permanently on-site. His bar, the Marquis II, is in an old building and a neighborhood with strict rules governing new construction. Building a kitchen or addition to the building would have been impossible, he says.

“I applied for the food and beverage permit with an agreement in place to have a food truck here, which I would have to staff,” he says. “It would be more labor for me, and more cost for me after five months of being closed. But it would allow me to get the doors open.”

But while Jara was negotiating his truck lease, the state of Texas revised its guidelines again, clarifying that bars could partner with temporary food trucks instead of having permanent kitchens. After solidifying a couple of partnerships with trucks like Eaty Mo Chicken and Waffles and Muiishi Makirritos, a Japanese-Mexican fusion truck, Jara finally reopened the Marquis in late August. But that presented another new problem: how to report combined revenue from two separate businesses. Jara called TABC for guidance.

“The food trucks give me their sales report at the end of each night, and I attach it to my reports. And that’s the extension of my kitchen — their sales become my sales.” Jara says he does not take a cut of the food sales from trucks.

At La Carafe, the Downtown bar that sits in what is often referred to as Houston’s oldest commercial property, the hunt is still on for a food truck that will allow the bar to open. Manager Ted Brown posted on Facebook several weeks ago looking for a truck or trucks to help La Carafe reopen, but it still sits closed. In the bar’s lengthy history, the past few months are the only time that the old-school, cash-only bar has been closed since it opened in the 1960s. He got a lot of recommendations from long-time regulars of the bar, but is still trying to find the right partnership.

“We wanted the truck to have a point-of-sale system and take credit cards, because we don’t really want to compete with them for the cash,” Brown says. He believes that now that food trucks are in such high demand, they hold all the cards. Many have asked for agreements that the bars can’t or aren’t willing to make, like guaranteeing a certain amount of food sales each night.

“One wanted to be there seven days a week,” he says. “We would like to have some variety, you know, maybe three trucks? So it’s not the same exact thing every darn day. Restaurants work that way, you know, but they can have a much broader menu.”

Still, Brown thinks a partnership with a food truck might benefit La Carafe even after the pandemic is over. The bar is in an area that gets a lot of late-night foot traffic, nestled between Minute Maid Park, several popular restaurants, and Houston’s theater district — all walking distance from each other. In normal times, La Carafe’s tiny patio and balcony make for great people-watching on weekend nights.

“It is my wish for the future that we continue to work with some food trucks,” he said. “At least on the weekend, if nothing else. Because we don’t have food, if you want to come down and spend an evening or a few hours there, you’ve got to go eat before you get there.”

Pedro O. Perez’s Delicias Maya truck has been working overtime during the shutdown
Delicias Maya

Before the pandemic, Pedro O. Perez’s food truck, Delicias Maya, would park outside of Montrose bourbon bar Poison Girl, where he’d open briefly for lunch, then reopen again around 5 p.m. for the happy-hour crowd. In the Before Times, he’d serve his Mayan-inspired street tacos to patrons of the handful of bars on lower Westheimer Avenue, then head home around 10 p.m. to be with his family, which includes a teenage daughter.

Now, Perez works until 2 or 3 a.m. He admits the later hours are harder on him but sees the work as an important collaboration. “The main thing right now is helping each other out as small-business owners,” he said. “I appreciate the bars and the other small businesses trying to make ends meet.”

Poison Girl only reopened in the middle of September, and was getting by on to-go cocktails before then. Thanks to Delicias Maya and other food trucks, they can now serve shots of Woodford Reserve to patrons inside. At the end of each night, Perez gives his sales reports to the bar’s owners, part of the new accounting process that has allowed the bar to reopen.

Perez doesn’t know what will happen after the pandemic is over, but he hopes that partnering with the bar will bring some new fans to his food truck. He said he’s heard rumors of other food trucks making untenable demands of bars, but on Westheimer, the vibe is much more collaborative. “I’m just another entrepreneur trying to live the American dream,” he says. “If we want to survive, we’ve gotta be a team. It’s a cool thing.”

Meanwhile, at Double Trouble, an all-day coffee shop and bar in an area of Houston known as MidMain, owners Robin Berwick and Robin Whalen decided not to open at all. The business has remained closed since the original shutdown in March. Theoretically, the Robins, as they’re affectionately known, could pair up with one of the restaurants at MidMain — the businesses there are a tight-knit group of neighbors. But there were just too many variables to make it worth it, Berwick says, including expenses like single-use containers, PPE, and utility bills. (Berwick says she turned the electricity off several months ago.)

Berwick questions how these TABC regulations will work when the pandemic is over, and expressed frustration with a lack of clarity from the agency as bars struggled to stay financially viable.

“For example, how long does the permit last?” she asks. “If I applied for a food permit, and then in December or January the vaccine starts coming out and then all of a sudden bars can be opened at 50 percent capacity — can you just make a call to someone real quick and drop your requirements? And then how many food trucks are going to be left out in the cold?”

Jara, meanwhile, wonders what the fundamental difference is between a bar that is closed and a bar that has opened as a “restaurant” under these new regulations. “Three weeks ago, all of us were bars. Today, we can open at 75 percent because we’re quote-unquote restaurants,” he says. “Nothing has happened in three weeks that has changed who we are. Our makeup has not changed, who we are fundamentally.”

Chris Porter, the public information officer for TABC, said that bars that do get reclassified have to meet more requirements than just percentage of alcohol sales. Reopening requires they follow the other social-distancing guidelines the state has already laid out for restaurants. “That means any food that is ordered is ordered from the table, with a customer sitting, and then brought to that table,” he says. “So there’s no situation where you would be able to, for example, crowd around a dance floor, around the bar top, or crowd around a concert stage.” In addition, the rules state that when customers are not seated at their tables, they must wear masks, including when waiting for a table or walking to the restroom.

“I will say, we receive myriad complaints every week, and we’ll go investigate those immediately. I think the public is taking a very strong stance on how closely they value safety, and how willing they are to report any potential problems,” Porter says.

Abbott announces the reopening of more Texas businesses
Gov. Greg Abbott has faced criticism over his handling of bar closings and reopening
Photo by Lynda M. Gonzalez-Pool/Getty Images

Jara says he found TABC helpful when it came to answering questions about the waiver process, but he still believes bars are being unduly punished, especially when Abbott continues to cite the industry as contributing to the spread of coronavirus. Jara considers himself a keeper of Houston’s bar history — rattling off a list of longtime Houston bars that have recently closed, like Alice’s Tall Texan, before wondering how many more will fall.

But all the changes may soon be moot. On October 7, Abbott announced that bars in Texas could reopen at 50 percent capacity if they were located in a county where a judge signed off on reopening. That won’t be happening in Harris County, where Judge Lina Hidalgo has announced that she won’t file to reopen bars right now.

In other counties, bars that went through the repermitting process will be able to revert back to their original status, Porter says. “TABC will put processes in place for eligible restaurants who wish to revert back to their former bar status. The decision will be up to those businesses as to whether or not they wish to remain a restaurant, or operate as a bar,” he says. “More information on this process will be made available on the TABC website prior to the October 14 reopening date.”

For Jara, Abbott’s announcement may be too late for many Houston establishments. He cites Alice’s Tall Texan, the longtime beloved dive bar that closed in July due to the pandemic, as an example.

“Historically, we’re looked at as industries of ill repute,” he says. “Everything else is open — we’re even trying to figure out how to get fans in the stands at football games. But bars are a museum of memories — that’s what we do, and we have to keep these establishments open. [The bars of] this city have a story to tell, and Gov. Abbott is ripping off the pages.”

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