Photograph by Matthew Suárez
The Merrow seems to be luckier (at the moment) than either the Music Box or Aztec Brewing since they can take advantage of their large parking lot for outdoor operations when conditions allow it.
“Here’s a little history,” said Paul Smith. “We started up in 2008. It was the Ruby Room up until about 2013, and then switched over to the Merrow. Not necessarily starting over, but building up a little.”
The Music Box's Joe Rinaldi says, “We were so, so busy, and then it just stopped on a dime. We were in sort of a seven-night-a-week operating mode at that point, and it just stopped into nothingness right on the 12th. It just stopped and it never came back.
Photograph by Matthew Suárez
Smith, The Merrow’s owner, continued, “In the last two years prior to 2020, we had finally found our niche with regards to the mix between the daytime crowd, the club nights, and the live music. Things were working. It’s like, ‘Hey, Paul’s paying himself a little. This is kind of cool.’ Everybody was happy. Everybody was almost too content with the way it was. We finally made it — and then we fell off a cliff. We started off 2020 with January being a record month for us. It was, ‘Wow. January? What the hell?’ February we were like, ‘Damn, this is one of the best Februaries we’ve had too.’ So, we’re getting ready for March and what we had in the books for March in regard to performances…I could probably put a dollar amount on each day. ‘March is gonna be huge!’ We’re starting off the year and I’m thinking, ‘2020 is gonna be my best year ever.’ Well, I was wrong. It ends up being the single worst year ever. A big part of what I miss is that we felt like we were being successful. We felt like we had achieved something, and then it was taken away.”
The Music Box was basking in a prime era of their own during the first couple months of 2020. Then Dan Deacon, unexpectedly, became the final artist to play the venue on March 11.
“The next night was supposed to be Digable Planets. They were in the van driving down from Los Angeles and we told them to turn around,” said Joe Rinaldi, managing partner of the Music Box.
He continued, “We were so, so busy, and then it just stopped on a dime. We were in sort of a seven-night-a-week operating mode at that point, and it just stopped into nothingness right on the 12th. It just stopped and it never came back.”
Paul Smith, The Merrow’s owner, says, “We’re starting off the year and I’m thinking, ‘2020 is gonna be my best year ever.’ Well, I was wrong. It ends up being the single worst year ever. A big part of what I miss is that we felt like we were being successful. We felt like we had achieved something, and then it was taken away.”
Photograph by Matthew Suárez
Perhaps most amazing is the fact that on that same day, March 12, Rinaldi was one of the many nationwide venue owners present on a conference call with the National Independent Venue Association. In late December 2020, the organization would be credited with spearheading the passage of the Save Our Stages Act — a $15 billion funding package that was part of a $900 billion stimulus bill related to Covid-19. The grants stemming from the package are specifically designated to help small-stage venues survive the pandemic shutdown.
According to an official statement from the association, “The legislation provides critical help to shuttered businesses by providing a grant equal to 45% of gross revenue from 2019, with a cap of $10 million per entity. This grant funding will ensure recipients can stay afloat until reopening by helping with expenses like payroll and benefits, rent and mortgage, utilities, insurance, PPE, and other ordinary and necessary business expenses.”
“What they did in March was just revolutionary,” Rinaldi said. “The best evidence is that we were doing a lot of the stuff nine months later successfully with the bill that had gone through Congress. They were that on the ball with what they wanted to do with the basic architecture when it started.”
The association organized small venues nationwide into a single voice that motivated Congress to pass a bipartisan act which will serve as a gigantic safety net for independent venues across the United States. Many of these same venues are now setting their sights on reform at the local and state levels. Our local chapter of National Independent Venues Association, SDIVA (pronounced ess-DEE-va) is part of this movement.
Joe Rinaldi, managing partner of the Music Box, was one of the many nationwide venue owners present on the March 12, 2020 conference call with the National Independent Venue Association. In late December 2020, the organization would be credited with spearheading the passage of the Save Our Stages Act — a $15 billion funding package that was part of a $900 billion stimulus bill related to COVID-19.
Photograph by Matthew Suárez
“San Diego’s pretty sleepy on this stuff,” Rinaldi explained. “We were basically just holding tight trying to get our house in order and paying attention to the national organization. But the guys up in San Francisco had gotten together, as they sort of always do, and got their coalition going. Then they started counting the number of clubs in the whole state, so they got a hold of us. They said, ‘Can you guys get your organizations in line? Can you set up the one in Los Angeles and the one in San Diego and get this mapping together, because we’re bigger and better in the statewide stuff.”
In the early days of SDIVA, Rinaldi says, it was just he and Pete McDevitt, the booker at Belly Up, who took on the task of organizing the local venues. They “shepherded all of the clubs and got them to show up for the calls and organize and submit their logos and do the grassroots work,” he said.
The aforementioned “statewide stuff” includes things like EDD unemployment compensation and state grants. The thinking is the same as the national organization. The larger the unified voice, the greater the chance for positive industry results. SDIVA member Tristan Faulk-Webster has prior experience with this on the hyper-local level. He is the former president of the Vista Brewers Guild, and a co-owner of the Aztec Brewing Company, the only brewery in the San Diego region recognized by the national association as a venue.
SDIVA member, Tristan Faulk-Webster, is the former president of the Vista Brewers Guild, and a co-owner of the Aztec Brewing Company — the only brewery in the San Diego region recognized by the national association as a venue.
Photograph by Matthew Suárez
Faulk-Webster views the Vista Brewers Guild as being the “beer equivalent” of the organizational work that he is doing with SDIVA.
“In the case of the Vista Brewers Guild, we got to talk to the city as a unit rather than one by one asking for a bunch of different things,” he explained. “This way, we had one voice. So, saying ‘We need help’ is stronger than saying ‘I need help.’ With that we were able to slowly get music going in Vista. Originally, the city was of the belief that live music caused crime. So, little by little, we had to convince them that ‘No, we can actually do this without any problems.’ At first, they only gave us an acoustic-only license. Then a three-person max license and then, finally, full bands.”
Whereas the Brewers Guild was pushing for increasing the amount and types of entertainment licenses available for the tasting rooms and breweries, SDIVA’s current local action is focused on exempting music venues from having to pay fees for these types of licenses during the pandemic. “If we’re not able to have entertainment, there’s no real point in having to pay an extra couple of thousand dollars,” Faulk-Webster said. “So, we’ve gotten some relief in small things like that.”
Smith offered further details on the license situation. He said that liquor licenses had no late-fees, and that businesses were given an extra month to pay their renewal fees. “Normally, if you miss it by a day, you’re paying some heinous fee,” he added. Whereas liquor licenses are controlled by the State, entertainment licenses are handled by the city.
“Your entertainment permit, depending on capacity, is a couple thousand dollars or more,” he explained. “Everyone’s been talking about some sort of negotiation. It sounds like they’re either going to refund it or pro-rate it and apply it to your next bill. So, when we finally get through all this and entertainment comes back, we will be able to take the period of time that we were down and apply it to the new license. I have no confirmation on that. It did come up as a discussion, I believe with Todd Gloria’s office. They’re doing something with it, but I’m not sure I’ve heard a final resolution as to what they’re going to do.”
One crucial role that SDIVA currently can’t serve is that of local fundraiser. People can still donate to the national organization, but there is no way to donate directly to SDIVA such that your contributions land directly in the laps of local venues. “We’re working on getting a 501c3 non-profit so that we can have that ability, but for the time being, we’re assembling contact info for everybody so that you can donate to venues directly,” Faulk-Webster said.
Whereas eliminating short-term licensing fees and helping venues to obtain state grants are crucial components of SDIVA’s efforts, Rinaldi’s focus is on a bigger picture issue.
“I don’t want to lose another venue,” he said. “When you see things on the news like Winston’s [struggles], those are stories we don’t want to have. We don’t want to have another Martinis Above 4th. We don’t want to have another Bar Pink. Those are very bad for us. So, number one with a bullet, I want to use whatever it is — state, local, national — to prevent that from occurring.”
For now, the good news is that help is on the way via the $15 billion that will be distributed from the Save Our Stages act — which is now referred to as the Shuttered Venue Operators Grant program. The bad news is that applications to apply for the grants haven’t even been sent out yet. That also means that all the venues that are scraping to make ends meet now can expect to remain doing so for another month or longer.
“My best guess is that we’ll get those things out and distributed by May,” Rinaldi explained. “I’m trying to beat that, but I’ve told people conservative-guidance-style that it took all of 90 days for the [Economic Injury Disaster Loan] and [Paycheck Protection Program] to get all the way out there. It was March as an onset, and the EIDL got out in April and May and the PPP started coming out in May, and most of them were out by June 30th. For both of those programs, that were really complex and messy, most things still got funded in 90 days. There’s obviously outliers and people who got left out, but the majority of them got out in three months or so.”
A tricky wrinkle that arrives with the current stimulus package is that venues can’t receive both a Paycheck Protection loan and a Shuttered Venue grant. You can currently apply for a Paycheck Protection loan, but if you wait a little longer and apply and are found eligible for a Shuttered Venue grant, it will likely translate to more funds for your business.
“The Shuttered Venue one is much more lucrative,” Smith explained. “It’s a larger grant. The PPP, sure it’ll help you, but that Shuttered Venue one, in my opinion, I know it would guarantee my survival. I know most of us are in the same size-relationship. If, for example, the Casbah got it, Soda Bar got it, I get it — I think we’re golden.”
Until that money arrives, venues will continue to take advantage of whatever methods they can pursue to generate some income and stay alive. The Merrow seems to be luckier (at the moment) than either the Music Box or Aztec Brewing, since they can take advantage of their large parking lot for outdoor operations when conditions allow it.
“I’m in a little better position than some of my peers,” Smith explained. “We do the shows, live-music and night club stuff…all that. But we also have a regular bar crowd during the day. We’re basically running an outdoor restaurant. We don’t offer food normally, but I partnered up with three of the little restaurants that are right next to me here on the street and they provide the food for my guests. So, you can order off one of the three menus that we offer. You come in and sit outside just like everybody else. Have a sandwich, hot-dog, or whatever and order your drinks. That’s the extent of our operations since we reopened in August. We made it through December 7th and then they shut us all down again. I think we had a couple of weeks in June where we had reopened, and that’s been it. Otherwise, we’ve been shuttered or closed for the entire period as well.”
Smith was able to utilize money he received from city and county grants to pay for the outdoor furniture and canopies that serve as his outdoor dining space. “It’s lightweight stuff — if it gets damaged or destroyed within a year, it’s a ‘Who cares?’ type of thing. My guests like it. They feel it’s one of the safer places they can go. We’re 10 or 15 feet apart sometimes — that’s how much space is out there. Nothing is inside, so my staff stays inside and goes out and does the service. It creates quite a separation between the staff and the guests,” Smith said.
All that being said, Smith estimates that live music events account for 70 percent of the club’s business in normal times. The outdoor dining helps, but in no way equates to the volume of business pre-pandemic.
At Aztec Brewing, Faulk-Webster said they are still selling beer to-go, but that profits have definitely dropped as well.
“I’d say a lot of our revenue was based more on live events,” he explained. “So, once that option shut down, we had to switch gears, and luckily we did have the ability to still make money and pay rent. We’ve had to furlough a lot of our employees in the meantime, but we’re still able to keep a sort of skeleton version running. I think that’s one of the better things with being a little bit of a smaller operation. We weren’t over-extended to the point of it hurting.”
Faulk-Webster said that Aztec had live music events six or seven nights a week before the pandemic started. On weekends, they would have local bands and the occasional national touring act. They also had open-mic and other jam nights focused on genres such as the blues and reggae.
“It’s always surprised me that more breweries aren’t having live music,” he said. “It’s picked up a lot, but when we first started doing it and holding shows, everybody kind of looked at us like we were the Addams Family.”
So, Aztec continues to sell beer, albeit exclusively to-go, and The Merrow opens when they can for outdoor drinking and dining — sort of expected pandemic pivots for both operations. The Music Box’s transformation into a boxed lunch factory — less expected. The venue’s food division is making pre-packaged meals for subsidized school lunch programs. The only catch is that the lunches are delivered to homes instead of schools, due to remote learning.
“It’s not philanthropic. We do it for money,” Rinaldi explained. “It provides ten jobs and allows us to use some PPP money that otherwise would have to be returned. But it does eventually go to a good cause and we are happy to be a cog in that factory. We have a 3000-square-foot kitchen and it’s employed. This box-lunch program is a mid-week Monday through Friday function, so we do have a work week, and that work week has been continuous since August... but it’s not 10 percent of our original business.”
One would assume that at some point, the pandemic restrictions on live music will come to an end. When that day comes, how does live music awaken from its coma and reset? In terms of a venue such as the Music Box that books national acts, a Sunday night announcement giving them the greenlight to start hosting concerts the next day doesn’t mean much.
“If I’m gonna have risk on a show that costs $25 to go to,” Rinaldi explains, “I’m gonna need eight weeks to sell that show. That doesn’t work for the first eight weeks after a pandemic reopening. So, a lot of the stuff we do early on is not going to have those kinds of economics. Those are going to be five-, eight-, or twelve-dollar shows where a lot of bands that haven’t played out in a bit from the community come back and do some shows for us. Normally, we would spread that stuff out and mix it in, but there will be a good concentration of that stuff, because that is what is the most viable in the earliest term.”
He continued, “I think Los Angeles and San Francisco have the ability to fill a bit of a supply pipeline with available acts. I don’t think that Vegas, Phoenix, the Central Valley, Bakersfield, San Diego have those types of markets. But we are very blessed to be so near Los Angeles and, to a lesser degree, San Francisco, to have those regional bands be part of that early calendar.”
For both The Merrow and The Aztec Brewing Company, a return to normalcy should arrive faster. Both venues primarily feature local talent. As long as local bands and artists are ready to gig, they should be off and running within days or weeks as opposed to months.
“I think on a local level, it will definitely be very active,” Faulk-Webster explained. “I know that at the very local part of the scene, there are a lot of people that are just itching to get out, and once the doors open up, I think a lot of places will be pretty packed again.”
Regardless of how it happens, Smith thinks they still have a long wait ahead of them.
“We think that live entertainment or being able to utilize the inside for something close to what was normal, we’re still thinking that’s no earlier than September or October,” he said. “I don’t know how everybody else feels. We’ve lost pretty much last year. We’re gonna lose this year. So, being out of business for almost two years, that’s hard.”
As for SDIVA, what will this new organization focus on once the pandemic ends?
“I think there’s a lot of different things,” Faulk-Webster explained. “Using the Brewers Guild as an example, there is a basic promotion that we can all do together. For example, the Brewers Guild has a map of every brewery, I would like to see a map of every music venue, just so the public interest in live music builds. There are also artists that we can help build up between each other. Aztec is a smaller venue, so we’ve given a lot of artists their first start into the music scene. Kind of farming back and forth between venues, some people have been able to build up their presence. I think having a lot of solid artists in our geographic region builds up our reputation outside our city. I would love for San Diego to have the same reputation that Nashville does. I think that the only way we’re going to be able to get there is to coordinate between each other on simple little things like this.”