Short-Staffed: Growing Pains for Loudoun’s Booming Restaurant Industry

Melia Wilder begins her drive from her Fairfax County home to her restaurant at the Village at Leesburg every day wondering if the locks will be changed when she gets there.

She slips the key into the door. Click. The Ten Spot Kitchen & Tap lives to see another day.

The Ten Spot quietly opened at the end of May 2016. It was a quieter opening than Wilder may have wanted because she had only three kitchen employees.

“We literally couldn’t open to the full operating hours we had negotiated in the lease until July 11 [2016] because I had to be able to give the three employees days off,” she said.

A year later, the staffing situation has not changed much for the better. She has to pay her kitchen employees more than the average hourly wage to keep them from leaving for a higher paying job. Her restaurant’s reviews are very good, yet weekdays are slow and the busy weekend nights may not be enough to sustain the restaurant much longer. Wilder has been paying all her bills, including the payroll, but is not able to afford a portion of the Ten Spot’s rent. She fears any day that she may be asked to leave.

Wilder is not one to shy away from competition from other restaurants, but said she believes the reason for her and others’ struggles in the restaurant industry is a case of too much too soon.

“We’ve got a real epidemic occurring here. We’ve crossed the line of competition into market saturation,” she said.

The growth of the tourism and hospitality sector, of which the county’s restaurants, wineries and breweries play a big part, has established itself as one of Loudoun’s success stories. Visit Loudoun CEO Beth Erickson notes there are 16,840 hospitality and tourism-related jobs in the county, more than those employed by Loudoun County Public Schools and the Loudoun County government combined. The sector is expected to grow an additional 86 percent in the next few years.

But with growth comes growing pains, and the owners and managers behind Loudoun’s restaurant scene have reported problems with hiring and retaining good employees from the same small pool of applicants.

Restaurant employees often work multiple jobs to afford the high cost of living in the area, or save money by living with family or friends. Many restaurant owners report that their employees are often poached from other restaurants offering a higher wage.

In downtown Leesburg in particular, the growth of the restaurant industry in recent months has been staggering. Two of the downtown’s newest establishments, Delirium Café and Captain Catoctin’s Crabs & Concoctions, have together created 100 new positions just since May.

Stephanie Sutton pours a cold draft beer at Delirium Café in downtown Leesburg. Between just two restaurants in three months—Delirium Café and Captain Catoctin’s Crabs & Concoctions—100 positions have been created. [Douglas Graham/Loudoun Now]
            Nils Schnibbe, co-owner of Captain Catoctin’s, reports that some of his employees have looked into moving to the Winchester or Frederick, MD, areas for cheaper housing. Half of his employees still live at home.

“Most of the other half have more than one job to keep up with the cost to live around here,” Schnibbe said.

Timo and Nicole Winkel have operated their Döner Bistro restaurant in downtown Leesburg for almost 10 years. They learned quickly that to attract and keep quality employees “you have to pay a higher price for them,” Nicole Winkel said. The couple has chosen over the years to keep a smaller staff and pay them a higher wage, with overtime, rather than add more employees. When they opened in the spring of 2008 they would offer employees minimum wage but, with rising housing and other costs, they know that wouldn’t fly now.

“We’ve always had the philosophy that if you have a small staff that does a great job it’s a lot more effective and better for customer service and food quality than having a lot of part-time people running around and doing a mediocre job. It’s easier to manage that,” Winkel said. “We do pay the higher price but we know what we have.”

Santosh Tiptur recently opened The Conche, a chocolate-themed boutique restaurant, at the Village at Leesburg. Staffing his restaurant was, he simply put, “a nightmare.”

Having previously worked in Washington, DC, Tiptur did not think that finding quality employees would be a problem. But internet postings yielded employees with minimal to no restaurant experience, and many were high school-aged. The long hours and, at times, grueling nature of the job soon weeded them out. Fortunately, many of Tiptur’s experienced staff brought recommendations of other peers looking for jobs and now his staffing is up to 22 employees. Although they are in a better position, the staffing is still not enough to offer more than dinner six days a week and Sunday brunch. And Tiptur expects there to be growing pains in finding staff with the commitment to work lunchtime and Saturday brunch hours.

In nearby Lansdowne Town Center, Ford’s Fish Shack owner Tony Stafford also had to make sacrifices at his second restaurant’s opening. He initially was not able to offer lunch service and still is missing staff to service four final tables at the restaurant, resulting in a weekly revenue loss of $3,000 to $5,000.

“We opened with about 30 staff members; we need about 60,” he said, adding that he is fortunate he can borrow from the employees at his already established flagship location in Ashburn.

Opening his third restaurant in Lansdowne three months ago has been a much different experience than when he opened his first Ford’s Fish Shack in 2010, and he points to the rapid rise of other nearby shopping centers and restaurant competitors as a main reason.

“There’s not enough of a [labor] pool that we all pull from. There’s a hole at the bottom of the bucket,” he said. “As some of the restaurant people get out of the industry we need to keep refilling those positions but we don’t have that because people are not moving into Loudoun County to fill those positions.”

Stafford notes that, unlike neighboring Fairfax County, there is not a large four-year university program to pull employees from. The small labor pool and the need for affordable housing are big parts of the problem, he said.

“This is probably a five-, 10-, 15-year solution,” he said. “We have to make a decision on [if] we want the restaurants that are already open and being great partners to our neighbors to survive than we’ve got to think about do we need to keep opening new restaurants. I like competition, I want more of it but we have to be smart about it.”

Loudoun is, “an affluent community but unfortunately the population isn’t there to support the complete influx that has occurred,” Wilder said. “Only the strong will survive—and I’m talking about the deepest pockets—to get through this unorganized chaos of growth.”

These are fears well known to the higher-ups in local government and other business leaders. Leesburg Economic Development Manager Marantha Edwards said the need for workforce housing plays a big role in this.

“It’s something we talk about continually. It is a challenge,” she said, noting the irony of Loudoun, once again, being recognized as the county pulling in the nation’s highest median household income. “It’s about a sustainable work staff and it’s about that sustainable level of quality of life. … How far are you going to drive to get a wait staff job? Without access to public transportation that’s a challenge as well.”

And the challenges are ones that could pose a threat to economic development throughout the county.

“All the visitors and residents are having a great experience, but wait staff is having to work three jobs and commute an hour each way,” Edwards said. “It all is pointing to the same thing—how are you going to create some housing options for the workforce? As an employer, I want to bring my business there and hire people but if the people aren’t there, then I’m not going to bring my business there.”

Recent real estate data shows that median home value in Loudoun County is $472,500.

The issue of workforce housing is “pervasive” and extends to industries beyond the tourism and hospitality sector, Loudoun Chamber of Commerce President Tony Howard says. And it’s a “wallet issue” for every single Loudoun County resident, whether they are in that employment sector or not.

“If you pay property tax, if you pay sales tax or any other tax that the county derives revenue from you then this issue matters to you,” Howard said.

One of the first questions a company asks him before relocating or expanding in Loudoun is where will their employees live. If there’s not enough employees or adequate housing for a range of incomes, a business may choose a different county.

“You can have the best wineries, the best schools, etc., but if the business owner can’t find a workforce they’re not going to come,” he said. “Providing sufficient [workforce] housing is going to rebalance the tax base so residents don’t need to pay any more than they need to fund schools and police.”

krodriguez@loudounnow.com

2 thoughts on “Short-Staffed: Growing Pains for Loudoun’s Booming Restaurant Industry

  • 2017-07-27 at 7:58 pm
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    People in Loudoun should rent out a room to these workers and the restaurants should give a discount to the homeowners. This would help build business and help all three parties involved. Excited for Loudoun!

  • 2017-07-28 at 7:42 am
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    This is an interesting dilemma. Businesses are having difficulty attracting employees to low wage jobs so the solution is to build low cost housing so businesses can continue to pay low wages. Businesses turn to the government to request the county build more low cost housing. The county approves higher density communities in an attempt to provide more low cost housing. This higher density housing requires more county services, requires more county staff, and more county revenue. The county has to build more schools, roads, water, and sewer to accommodate more residents. To build this infrastructure, the county has to incur more long-term debt and possibly raise taxes.

    Loudoun County is one of the richest and fastest growing counties in the country. Loudoun County also has one of the lowest unemployment rates in the region at 3.0%, 1.6% lower than the national average (4.6%). It is not surprising to find that builders and developers are building some of the most expensive new homes in the region: single-family homes starting at $775,000, 3 bedroom town homes starting at $600,000, and 2 bedroom condos starting at $350,000. These homes are in demand and it makes good business sense to supply a robust market.

    Somehow these two topics are connected. We must build more to continue to grow (huh?). The county must find a way to grow more to meet demand. Isn’t part of our problem that we have grown so much that we can’t meet the demand?

    Ultimately, I think the question is do we pay more for our services or do we pay more in taxes and long-term debt. Somehow, I think it will be both.

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