North Texas City Using Unique Concept to Support Local Restaurants

Stephenville is sending gift cards in the mail to residents to use exclusively at local eateries as the wait continues for federal relief

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Another attempt at passing a COVID-19 relief bill in Washington failed during a Senate vote Tuesday.

It's a sign that the hard hit businesses like restaurants will have to wait longer for critical funds.

But some cities are taking matters into their own hands to provide a little bit of relief.

In Stephenville, city leaders have been trying to spark business by dropping $25 gift cards in the mail for all residents to use exclusively in local restaurants.

“Everybody tends to come together when there's a crisis here and it's really amazing,” said Allen Barnes, Stephenville City Manager.

Back in June, Barnes said they came up with the idea to send the restaurant vouchers in the mail to water utility customers.

The goal at first was to tap into the city’s own coffers and use retained earnings from utility funds but then CARES Act money came in and the city council decided to set aside $135,000 of it for the gift card program.

In the first wave of the program over the summer, the $25 gift cards went out to about 5,400 water utility accounts. Over 3,200 vouchers were cashed in, injection $8000 into the local restaurant economy.

“It went over much better than we expected,” said Barnes. "In talking to some of the restaurant owners, what we saw is that folks didn't just go in and spent $25. They went in and spent $50 or $40. So they saw a larger economic boom when people took the cards in then they would've seen otherwise."

With money still left over in the program and restaurants still struggling seven months into the pandemic, city council approved at the last council meeting another round of vouchers to go out in the mail in the next few weeks.

“These are the types of initiatives that we are starting to see these cities pull together because restaurants are so important,” said Emily Knight, president and CEO of the Texas Restaurant Association.

The TRA is hoping other cities take note of what Stephenville is doing. The city recently caught attention in a national online publication for restaurants.

The trend is also playing out in the United Kingdom. Over the summer, the government adopted a similar voucher system that pumped millions into restaurants there.

“If you think about it, we've received eight weeks of congressional support. So eight weeks of relief in the paycheck protection program for something that's going on for seven months and we don't see an end in sight,” Knight said.

Of the 50,000 restaurants in the TRA network, about 15% have closed permanently since March. If there's no stimulus relief, data projects a total of 30% of Texas restaurants could potentially close by the end of the year.

"Unless we get behind restaurants and order out or dine in, your favorite restaurant won't be here in the next 6 months," said Knight.

The state of Texas and TRA worked with Coca Cola and several other states to supply information and data for a comprehensive study on the restaurant landscape.

The results of that study were released this week. Click here to see the data.

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