Bars, restaurants, and cafés in Kaunas Old Town started closing one after another. Entrepreneurs cite increased taxes, lack of customers, and poor decisions by the city government as the reasons why their businesses can no longer survive.
The restaurant Juoda Druska, which had been operating on Vilniaus Street in Kaunas Old Town for almost six years, closed its doors in the summer. After the restaurant's bankruptcy, its owner Italian Simone Rotoli took a job in a pizzeria in Vilnius.
According to him, the business faced many challenges while operating in Kaunas Old Town. First, there was the coronavirus, followed by the reconstruction of Vilniaus Street, which started before the restaurant could recover from the pandemic.
“Instead of closing the street in an orderly manner and compensating for the damage – which would have been the sensible thing to do – the city authorities closed half the street. They demolished one side and allowed people to walk on the other side. But obviously, nobody would come to a street that was being repaired and dirty,” Rotoli told LRT.lt.
According to the former restaurant owner, the rental prices for premises in Kaunas Old Town are too high, which also leads to businesses closing down.
“Kaunas is not worth these rents. In fact, it’s practically empty on weekdays and during the cold season. Restaurants invest hundreds of thousands, and on a Tuesday night three tables are occupied,” he said.
According to Rotoli, the reintroduction of the standard VAT rate of 21 percent for the hospitality sector after the coronavirus pandemic was another painful blow. Even with the lower 9 percent VAT rate, it was difficult to survive, he said.
“The situation is shameful because there is a handful of people who control everything, and independent small restaurants cannot survive. We don’t have any spare money, we cannot move the missing money from another restaurant,” the Italian man explained.
Rotoli now works in a pizzeria in Vilnius and says that the situation in the Lithuanian capital is different.
“There are a lot more people on the streets of Vilnius, the summer was incredibly good, customers waited in queues for a table. There were foreigners, Lithuanians, young people, older people. [...] More people live in Vilnius, and many more of them go to restaurants on weekdays,” he said.
Customers never returned
Eglė Simuntienė was the owner of the restaurant Galerija Urbana and the bar Shamrock in Kaunas Old Town. Both businesses also had to close.
“Galerija Urbana had to close during the reconstruction of Vilniaus Street because the owners of the premises did not agree to stop the lease,” Simuntienė said.
According to her, the Kaunas city authorities did not pay any attention to the entrepreneurs’ plea for help.
“We were warned two weeks in advance that all businesses would have to close in July. [...] We couldn’t get into our premises and had to stop our activities. Then we appealed to Kaunas Municipality for compensation, for some support, but they said that we were doing business in the Old Town and we had to be prepared for such cases,” Simuntienė explained.
“And then the electricity prices went up a lot, which also hurt financially. We tried to get out of debt, but after the renovation, Kaunas Old Town never recovered,” she added.
According to Simuntienė, customers did not return to the bars and restaurants after the reconstruction of Vilnius Street was completed, but the municipality did not care about it.
“Then there was the VAT change, and the final straw was the car pollution tax. It has made the flow stop, you get absolutely no revenue, and you see that you cannot survive like that anymore. We just decided to close our bar after 14 years in operation,” she said.
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Hindering businesses
In October, the Genys Taproom bar on Vilniaus Street also closed its doors, and its manager Laurynas Lisauskas explained the reasons for it on Facebook.
“Businesses don’t need subsidies, discounts, incentives. It is enough not to hinder them, ie to provide conditions to work quietly, not to interfere, and to allow to do business in the way the law allows,” he wrote.
According to him, the situation in Kaunas Old Town was different. The first hard blow was the pandemic, followed by the prolonged reconstruction of Vilniaus Street.
“When the repairs were finished, the first red flags started to appear. Vilniaus Street was open, but the flow of people had not returned. [...] And then the city gave the Old Town a hastily introduced Low Emission Zone, which completely switched off that tiny light at the end of the tunnel,” Lisauskas wrote.
“The moral is very simple. When you prevent business from doing business and you turn off the light at the end of the tunnel, the business goes away. And so, in a matter of months, Juoda Druska, Republic 3, Shamrock, Pas Stanley, Pale Ale, Jurgis ir Drakonas, several small shops, ice cream shops, and now Genys Taproom, disappeared,” he added.
Odeta Bložienė, the manager of Jurgis ir Drakonas, which announced the closure of the restaurant in Kaunas Old Town in September, named the same reasons for the closure – the decrease in the number of customers, the prolonged street repairs, and the increase in taxes.
“We can no longer maintain the restaurant because people are concentrating in other places in Kaunas. Laisvės Avenue attracts more people, and the Old Town has become unattractive to residents,” Bložienė said.
Have solutions
In October, another reconstruction started in Kaunas Old Town, this time on the Town Hall Square.
“We understand that the reconstruction of Vilnius Street was not the easiest period for business in the Old Town, but today Vilnius Street has turned into an attractive space. For the Christmas period, despite the reconstruction of the Town Hall Square, many activities and events are planned to increase the attractiveness of the Old Town,” Paulius Keras, deputy director of Kaunas Municipality Administration, told LRT.lt.
Tadas Metelionis, the director of Kaunas Municipality Administration, was quoted in a press release issued earlier and assured that the city authorities are in contact with the Old Town entrepreneurs.
“We hear the business community; we know their current situation. We already have the first decisions on how to make this part of the city more attractive, so that Kaunas citizens and visitors don’t bypass it,” he said.
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