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Restaurant operators felt blindsided by Gov. Tim Walz's announcement Wednesday that restaurants could open only for outdoor dining on June 1, with the head of a hospitality trade group calling it a "disastrous setback."

While some restaurant owners are still weighing whether employees would be safe from COVID-19 if they open — and if customers would come — they had been expecting a green light to operate their dining rooms, possibly with tight restrictions.

"Our patio has eight tables. With social distancing, what is that? Two tables? We're almost better off staying closed and waiting this out," said David Fhima, owner/chef of Fhima's Minneapolis.

Liz Rammer, chief executive of Hospitality Minnesota, said although the state's latest order gives restaurants with outdoor capacity a break, many more have little or no outdoor seating and no room to create it.

The postponement of when restaurants can open their dining rooms makes it only more likely that the Paycheck Protection Program small-business relief many operators took will not be converted to a grant because they won't be able to meet the payroll obligations.

Hospitality Minnesota is calling on the state to draft a targeted relief package for restaurants.

Restaurants pose a threat because patrons are in close quarters for extended periods, creating conditions conducive to viral spread.

The latest order allows restaurants to serve a total of 50 patrons outside and encourages municipalities to work with businesses to find creative options for spaces along sidewalks, rights of way and parking lots.

The next phase in the state's reopening — which does not have a timeline — would allow inside dining with restrictions.

"I can't tell you how disappointed I am," said Donna Fahs, of Parasole Restaurant Holdings, which owns such restaurants as Manny's Steakhouse, Pittsburgh Blue, Salut Bar Americain and the Good Earth.

"The governor was giving every indication that bars and restaurants would open June 1," she said. "I'm just dumbfounded that good people surrounding him could not convince him that that's not going to be sustainable for restaurants."

Parasole had been planning for a lot of scenarios, but no one was making plans to become an outdoor-only operation.

"There's just no way," she said. "What happens when you have your patio open and a storm comes from nowhere? You can't go inside."

Fahs said restaurant managers will hold a conference call Thursday to regroup.

After the announcement Wednesday, Tom Hanson sat stunned inside the Duluth Grill, a popular Duluth restaurant he opened 19 years ago. "This outdoor dining bit," he said with a shake of his head, "that might be great anywhere but next to Lake Superior."

Even under brilliant sunny skies Wednesday, he noted, temperatures were in the mid-50s.

Preparing for a June 1 opening, he was having social distancing signs made and plexiglass cut to put up between booths of the diner-like restaurant, but then he wasn't sure about continuing the work.

A few wooden picnic tables dotted a former parking lot next to the building, and Hanson, who also owns OMC Smokehouse, ordered another $3,800 worth of picnic tables and $1,200 worth of garbage containers. He hopes it will be worth it.

"This is just a numbing lesson in patience," he said.

Fhima had been hoping that his restaurant could reopen with a capacity of 25 to 50% and planning accordingly.

He'd installed touch-free sinks, paper towel dispensers and doors and had planned to offer patrons disposable plateware, if desired.

Fhima noted that the cap on 50 diners will create an economic strain even for restaurants that already have large patios.

"You don't even begin to break even," he said. "But how do you balance it? You have to trust the officials, you have to trust science. If they are right, and this is the right thing to do, then I applaud them. But this is tough. We're going to hear about a lot more restaurants closing."

The Twin Cities has already seen several closures, one of the latest being the 29-year-old Moose & Sadie's in the North Loop, which joins the 21-year-old Pazzaluna in St. Paul and the 40-year-old Egg & I and nine-year-old Bachelor Farmer in Minneapolis.

In the suburbs, closures include the 20-year-old Bonfire Wood Fire Cooking's locations in Woodbury, Blaine, Eagan and Savage, and Vivo Kitchen in Apple Valley.

The upscale Pub 500 in Mankato can seat about 70 customers outdoors with a little help from the city to give permission to open a sidewalk, parking lot or even the street for additional seating.

But proprietor Tom Frederick Jr. said that patio-only seating is still a "real gut shot."

"Minnesota has about 39 nice days a year — I've studied it — and what if it's raining? Then what do we do with the staff members who are working?" he said.

Stephanie Laitala-Rupp, owner of W.A. Frost, which has one of the largest patios in the Twin Cities, said she's not sure the patio will open June 1.

"It's not about the weather — we've always dealt with that — it's about the health and safety of our staff and customers," she said. "We're still grappling with tough issues. I don't want to put people at risk."

Market Bar-B-Que moved in early 2019 to a northeast Minneapolis location with a small patio. Co-owner Anthony Polski is still trying to figure out whether he should open it.

"My first reaction is that the guy who sells patio stuff is probably the happiest guy on planet Earth right now," he said. "Like a lot of other restaurant owners, I want to see a light at the end of the tunnel, but it doesn't seem like anyone knows where that light is."

Staff writers Jackie Crosby and Pam Louwagie contributed to this report.

Correction: Previous versions of this article misstated the age of Moose & Sadie's. It opened in 1991.