Some small businesses in the Twin Cities test the cost of ramping up

David Chall is about to test the costs of returning to work.

Chall, owner of UP Coffee Roasters in northeast Minneapolis, has seen revenue plunge 85% in the past month as his 1,000-plus clients of coffee shops, restaurants, hotels and universities shuttered due to coronavirus.

He furloughed 23 part-time and full-time employees when the lights-out order hit for all but "essential" Minnesota businesses.

Chall, two veteran coffee roasters and an employee who services client equipment, kept the business limping along until April 16. In addition to its wholesale business, the firm operates a small coffee shop and cafe.

Chall received a $163,000 no-interest SBA-guaranteed loan through Associated Bank. Last week, he recalled employees. The loan is forgivable if at least 75% of the funds are spent on wages and the rest on normal business expenses over eight weeks.

All but five returned, including two who are quarantined because of suspicion they might have COVID-19. They are expected back within a couple weeks.

Chall said he also realized that some furloughed employees can make more on unemployment for eight weeks than working.

UP Coffee employees, including college students who work the coffee bar and retail sales part-time, make a median wage of about $15 an hour. Wages can range to $30 an hour for the most experienced full-timers.

A $15-an-hour employee will receive about half that in Minnesota unemployment compensation, plus $600 a week from the federal government in a new program.

That worker, at least for several weeks, makes more on the couch than at work. Chall and other employers are submitting the names of recalled employees. If they apply for future unemployment benefits, they may be denied.

"The whole purpose of the Payroll Protection Plan SBA loan was to get them off unemployment and back to work," Chall added. "It's not like we don't have things for them to do. There are a ton of projects including our improved online ordering system for drinks and sandwiches. And an online-subscription service. And helping [wholesale] customers put their online-ordering websites together. And doing whatever we can to make it safe for our retail customers here.''

Barb Gardiner, an owner of Hen House restaurant in downtown Minneapolis, last week called back about a dozen of her 60 workers in order to open a takeout-and-delivery service in anticipation of some office workers returning this week.

"There were one or two [employees] I contacted who said, 'I'm doing OK on unemployment,' " Gardiner said. "And I'll still take them back eventually. They are doing what's right for them and their family."

Christine Ward, owner of Patina, the specialty retailer, employs up to 150 full- and part-time workers during busy seasons, most of whom make $15-plus an hour.

"Most of our team wants to come back to work," Ward said. "There were some who were nervous about safety.

"We do by law have to report to the state employment agency when we have offered jobs back. I would be legally obligated to share the information that a furloughed employee was offered and declined to come back. We're fortunate in that 80% to 90% we've offered willingly decided to come back."

Chall doesn't expect that workers and residents from surrounding buildings will soon congregate for coffee and a homemade scone in the spacious coffee cafe that fronts UP's roastery and warehouse.

However, he believes, between masks, plexiglass, electronic-purchase machines and a lot of employee education, he's created a safe space for retail customers; more of whom were showing up every day last week.

At UP one sunny afternoon last week, the coffee bar staff was quipping behind masks with each other and patrons.

That's encouraging for Chall. However, the coffee entrepreneur, who first opened a coffee shop while at the University of St. Thomas more than 20 years ago, can't sustain his business at less than 25% capacity forever. There's only so much that creativity can do.

"I have very good talent working here on websites and online-ordering and preparing our retail business and in the roasting area and warehouse" Chall said. "But how long will it be before people can sit in a cafe or restaurant? That really affects UP and the businesses of our wholesale customers."

Neal St. Anthony has been a Star Tribune business columnist and reporter since 1984. He can be contacted at nstanthony@startribune.com.