Hurt by Lockdowns, California’s Small Businesses Push to Recall Newsom

Hurt by Lockdowns, California’s Small Businesses Push to
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Hurt by Lockdowns, California’s Small Businesses Push to Recall Governor

The pain for such enterprises been particularly acute in the state, leading some to back an effort to replace Gov. Gavin Newsom.

Credit…Rozette Rago for The New York Times

  • Feb. 19, 2021Updated 6:26 p.m. ET

LOS ANGELES — Alexandra and Daniela Del Gaudio had never been to a political rally before, let alone one to protest a coronavirus lockdown and recall Gov. Gavin Newsom. But things had changed in the sisters’ lives since they opened the Wild Plum, a yoga and wellness space, in 2018.

The Wild Plum, in California’s San Fernando Valley, closed in March when Mr. Newsom issued pandemic stay-at-home orders for the state. By the time the Wild Plum reopened last month, when Mr. Newsom relaxed the latest lockdown restrictions, the sisters had amassed $70,000 in debt. So there they were at a recent anti-Newsom rally in a restaurant parking lot in the Sherman Oaks neighborhood of Los Angeles, along with dozens of other business owners.

“Everyone says to walk away, but we put everything we have into this,” Daniela Del Gaudio, 33, said. “We’re banging our heads trying to figure out what to do.”

California was one of the earliest states to go into lockdown last spring, and it is now emerging from a second lockdown, which started in December. That stop-start-stop has created a groundswell of anger toward Mr. Newsom, a Democrat in the third year of his first term, that is increasingly fueling a movement to recall him from office in one of the bluest of blue states.

Demonstrators rally for a recall of Gov. Gavin Newsom in Huntington Beach, Calif., in November.
Credit…Marcio Jose Sanchez/Associated Press

The recall threat to Mr. Newsom has considerable momentum. Since March, 1.5 million Californians have signed a petition to oust Mr. Newsom, enough to trigger an election for a new governor. If enough of the signatures are verified, it will be the fourth recall election of a governor in American history.

After they are verified and costs are estimated, the state has 60 to 80 days to schedule an election. Voters will be asked two questions on the ballot. The first is whether Mr. Newsom should be recalled. The second: Who should replace him? If the first question on the recall comes up short, the second becomes moot.

The recall campaign has been funded by the Republican National Committee, which committed $250,000, as well as Silicon Valley tech investors such as Chamath Palihapitiya, who donated $100,000. Small-business owners have also been an engine behind the effort, said Randy Economy, the spokesman for the Recall Gavin Newsom campaign.

“He’s broken the back of small-business owners and put many of them out of business for the rest of their lives,” Mr. Economy said. He said many were incensed when Mr. Newsom was photographed in November having dinner at the French Laundry, a temple to haute cuisine in Napa Valley, in violation of state guidelines. (When photos of the dinner were leaked, Mr. Newsom apologized for his behavior.)

Small businesses across the country have suffered from shutdowns that sometimes seem to flare up as suddenly as surges in the coronavirus itself. Restaurants, gyms, corner stores and spas have closed, some after trying to hang in there for months.

The pain in California has been acute. Nearly 40,000 small businesses had closed in the state by September — more than in any other state since the pandemic began, according to a report compiled by Yelp. Half had shut permanently, according to the report, far more than the 6,400 that had closed permanently in New York.

Few of the pandemic choices that Mr. Newsom has faced have been easy. California has suffered enormously from Covid-19, with more than 3.5 million cases and 47,000 deaths. Los Angeles County, one of the hardest-hit places in the recent virus surge, has more than 1.2 million cases and 19,000 deaths.

Dan Newman, a political strategist for Mr. Newsom, said the governor was focused on coronavirus vaccinations and reopening the state. Mr. Newman blamed “state and national G.O.P. partisans” for supporting “this Republican recall scheme in hopes of creating an expensive, distracting and destructive circus.”

Acknowledging that the pandemic has “heavily impacted our small businesses,” the director of the Governor’s Office of Business and Economic Development, Dee Dee Myers, pointed to several state programs that offer them help. They include the California Small Business Covid-19 Relief Grant Program, the California Rebuilding Fund and the Main Street Hiring Tax Credit.

Ronna McDaniel, chairwoman of the Republican National Committee, said in a statement that Mr. Newsom had “proven that he is woefully unqualified to lead the state of California.”

In places such as Los Angeles County, where Mr. Newsom won 72 percent of the vote in 2018, and neighboring Orange County, a more conservative area, the small-business anger is particularly intense. One local business owner leading the movement to open California’s economy is Andrew Gruel, 40, a chef who owns Slapfish, a seafood restaurant chain.

Mr. Gruel argued in an interview last month that California’s lockdown rules were confusing and hurt small businesses disproportionately. “None of the rules make sense,” he said one afternoon from the Slapfish in Huntington Beach.

As evidence, Mr. Gruel pointed to the Walmart just up the road. While local restaurants could not have diners sit outside in the first lockdown, even six feet apart and with plexiglass between them, a Burger King inside the Walmart remained open, he said.

“And that was legal,” he said. “It’s like W.W.E. in there, people cross-body blocking each other for B.K. delight.”

Credit…David Walter Banks for The New York Times

Mr. Gruel said he had laid off 100 people, had closed one of his restaurants permanently and was worried about the rest of Slapfish’s two dozen locations. The company has lost around $100,000 and taken on a lot of debt, he added.

That afternoon, he let people sit outside anyway, even though it was against the lockdown restrictions at the time. “You could do a citizen’s arrest,” he suggested.

Local business associations said they were also furious. Nick Rimedio, who serves on the West Hollywood Chamber of Commerce, said the lockdowns had widened a class divide. While quarantine has been almost relaxing for what he called the wealthy “Zoom class,” it has been a nightmare for the poor and middle class who have storefronts or work service jobs in businesses in the area, he said.

“If you’re well-to-do, if you have a healthy stock portfolio, if you can work from home, you’ve saved on your commute. You’re doing great,” Mr. Rimedio said.

Angela Marsden, the owner of Pineapple Hill Saloon and Grill, a cozy bar in Sherman Oaks, has become another anti-lockdown leader. In December, she posted a video on Facebook in which she was masked and near tears. She pointed the camera at a movie set with outdoor tables, which was legal, and then contrasted that with her newly built outdoor dining setup, which had just been banned. The video went viral, and she started a GoFundMe page that has raised $220,000.

Last month, Ms. Marsden, 48, gathered dozens of local business owners, including the Del Gaudio sisters, to discuss how to survive and what to do to push for reopening. Many owned bars and restaurants; others owned gyms or spas. Almost all of their locations had been closed since March.

They sat at different tables, spaced a few feet apart. Most wore masks most of the time.

Credit…Rozette Rago for The New York Times

Belinda and Joe Lyons, who own the Celtic Raven Pub and co-own JJ Sullivan’s Irish Pub in the San Fernando Valley, said they had furloughed 12 people. One of their suppliers was demanding payments they could not make, they said. The Celtic Raven landlord has been pressuring them for 10 months of unpaid rent. By March 1, they will be personally liable for $49,000 in back rent.

“It’s going to kill us,” Mr. Lyons said. “Our retirement savings are gone.”

But the hardest part, Ms. Lyons said, was Mr. Newsom’s policies.

“When we were told we could open last June by Gavin Newson, I put full insurance back with the intention of reopening, only to be told that we could not,” she said. “That cost me over $8,000 that I’m still paying, as the insurance company would not cancel.”

Another attendee was Guido Murga, the owner of One Headlight, a hospitality supplies distributor. He said his business was down because restaurants, his main customers, were hurting.

“I sell napkins, straws, cherries, olives, to-go cups. When they close, I close,” he said. “I’m drowning week to week.”

Ms. Marsden had never led a rally before, but she got into the energy of it.

“Come April or May, how many of us will be here?” she asked, her voice rising.

“None!” some in the crowd shouted.

Credit…Rozette Rago for The New York Times

The event was disrupted midway through when a small group of virus skeptics who had joined the crowd grew boisterous and demanded that people stop wearing masks. The moment reflected the complexity at play. Those fighting to open businesses in a responsible way were tangling with more Trumpist factions, who saw new allies in some of the apolitical business owners.

Carey Ysais, owner of the bar Kahuna Tiki, stood up to call everyone back to order.

“Guys, where you’re at is a different place than where we’re at,” Mr. Ysais said, as the anti-mask crowd jeered. “Are you a bar owner? Excuse me, are you a bar owner?”

The Del Gaudio sisters did not leave optimistic.

“We were raised to work hard. We’re not even given that opportunity,” Alexandra Del Gaudio, 36, said. “We’re trying to pull our families out of poverty.”

Thomas Fuller contributed reporting.

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