Kitty Bernardo, second from the right, is a bartender at New York City's only worker-owned cooperative cocktail bar.

Nicholas Ruiz

New York Finally Gets Its First Worker-Owned Cooperative Cocktail Bar

Despite the exploitative labor environment in bars and restaurants, this may be the first worker-owned cooperative in New York City’s hospitality sector.

Story by Oscar Perry Abello

Published on

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Kitty Bernardo’s first job as a bartender was at Corner Tavern, in New Brunswick, New Jersey. All the other bars on the block were usually filled with other Rutgers students like her, but this one? This was a dive bar. The townie bar. The firefighter bar. And it was where she first learned that a bar could be more than just a place to party or hook up — it could also be a place for community building.

“Learning how to make drinks strangely made me learn more about U.S. history and global history and taverns, inns, saloons,” Bernardo says. “Those were the places where people first started talking and connecting about things, figuring out big ideas, figuring out how to start a revolution.”

As bar manager today at Donna in New York’s West Village, Bernardo recently joined a new kind of revolution. Donna was a popular bar and restaurant in Brooklyn before the pandemic. After closing in 2020, it reopened in its new location on Cornelia Street this May.

The reopening also marked the culmination of Donna’s two-plus year journey of converting the bar into a worker-owned cooperative — making it one of the first worker-owned cooperatives in New York’s super-competitive hospitality industry.

As a worker-owned cooperative, all of Donna’s employees now have a path to becoming worker-owners of the cocktail bar, earning a share of the profits and a vote on major decisions involving financial or workplace policies like wages or paid leave and other benefits. Bernardo is on a fast-track to becoming the fifth worker-owner at Donna, out of more than a dozen employees.

“There’s a lot of beautiful things about being in the hospitality industry, and a lot of pitfalls,” Bernardo says from behind the bar on Donna’s May 17 grand re-opening. “And I think part of solving those pitfalls is taking care of the people who take care of you. We always talk in the hospitality industry about how do we take care of the people sitting in front of us, but very few times do we see that same hospitality extended to the person next to you.”

New York City is currently home to at least 40 worker-owned cooperatives, according to the NYC Network of Worker Cooperatives. They’ve typically emerged in sectors that are notorious for exploiting cheap labor from immigrants or people of color who have limited other options because of structural racism. Among the largest are The Drivers Cooperative, a 9,000-member driver-owned ridesharing platform, and the 2,500-member Cooperative Home Care Associates. Most worker-owned cooperatives in New York are much smaller, including household or commercial cleaning services, childcare centers, accounting firms, construction firms — and also Defector Media, the website launched as a worker-owned cooperative by former Deadspin staff.

Despite the notoriously exploitative labor environment in bars and restaurants, the sector has not produced any worker-owned cooperatives in New York until now. Other cities like Baltimore have a burgeoning concentration of worker-owned cooperative restaurants and bars.

The bar at Donna. (Photo by Nicholas Ruiz)

At the Democracy at Work Institute, a national nonprofit that supports the growth of worker-owned cooperatives nationwide, Strategic Partnerships Director Anh-Thu Nguyen cites a few reasons for New York City’s lack of worker-owned cooperative bars and restaurants. First there’s the high fixed-costs of starting up a bar or restaurant in New York: rent, build-out costs, equipment costs, insurance costs. On top of that, there’s the novelty of the business ownership structure to other stakeholders including lenders, landlords and even contractors. Restaurants and bars are a risky business for everyone involved — being a worker-owned cooperative adds a twist that feels like even more risk to outsiders.

“If you’re looking at a start-up business, worker-owned cooperatives already have a hard time finding financing because most lenders and investors aren’t familiar with it,” says Nguyen, who lives in Brooklyn. “On top of that, if you Google investing in food and beverage in New York City, the first thing that comes up is how to light your money on fire. The rate of failure in this sector is so high.”

It helps that Donna was a conversion, not a startup. The business had a track record, and the four worker-owners who went through the conversion process already had experience working together.

Plus, Donna already had a reputation as a community-first and worker-friendly environment, offering free meals and drinks for laid-off hospitality workers in the early days of the pandemic.

“It was a really magical place to work at at Donna,” says Lauren Ruiz, who became one of Donna’s initial four worker-owners and now serves as general manager. “We had a sense of community and a sense of ownership before we actually did have ownership.”

Ruiz had seen the cooperative model before; back in college, a roommate worked at a local grocery co-op. But she had never heard of it in the restaurant industry.

“I found that very interesting, because I definitely noted during the pandemic that a lot of good workers had pivoted out of the hospitality industry, because it was untenable,” Ruiz recalls. Especially in the days before the vaccine, she says, “you were kind of risking your life to wait for people who were being nasty to you.”

Leif Huckman, Donna’s previous owner and still connected as an advisor, first approached Donna’s employees in March 2021 about acquiring the business from him and converting it into a worker-owned cooperative. He’d moved to upstate New York and had been looking for a way to keep the business alive and not leave his employees hanging out to dry. Joining that meeting was The Working World, a New York City-based nonprofit that assists worker-owned cooperatives and provides financing for startups or conversions of existing businesses into worker-owned cooperatives.

In the summer of 2021, a group of six Donna employees began meeting once a week with The Working World’s senior project officer, Alice Maggio.“If you’re starting a co-op from scratch, that can be very hard to do, so it was a big advantage that this was a conversion,” says Maggio. “There were past financials we could refer to, so much information to start off with that could feed into all the assumptions.”

The first big task was to make some decisions about decisions — in other words, talk through what kinds of decisions would require a full group discussion and vote, and what actions could be delegated and taken on a day-to-day basis without requiring a vote. Only big decisions like compensation and benefits or who gets offered full worker-ownership status require a vote.

“Everything else works exactly as a restaurant,” Ruiz says. “The general manager makes the schedule, the kitchen manager orders the food, the bar manager orders for the bar, we don’t need everyone to vote on those decisions. It’s democratic but not bureaucratic.”

Donna's umami old fashioned. (Photo by Nicholas Ruiz)

One of the first big decisions the group had to vote on was the bar’s location. Originally they wanted to stay in Brooklyn; it’s where people knew them and where many of them lived. But after 15 different locations didn’t work out, they voted to expand their search to Manhattan.

“It was a big decision to leave Brooklyn, but we got priced out in a way,” Ruiz says. Sometimes the rent might be affordable, but then they would run into a “key fee,” a one-time upfront charge that isn’t a deposit they would get back — and the key fee would be prohibitively expensive, upwards of $250,000. Commercial leasing is a Wild West compared to much more highly regulated residential leasing.

Being a worker-owned cooperative also emerged as an issue for finding a location.

“The landlords were always spooked when [they asked] who’s the owner? And we’re like, we’re all the owners,” Ruiz says. “Which I find kind of ironic, because a lot of these places, there’s not just a single landlord. They’re like holding companies, and you don’t have a person of contact, there’s a management company. But they don’t understand worker-owned cooperatives, so that was kind of leveraged against us a lot of the times.”

Ruiz says they eventually had to work around the misunderstanding by working with their broker to just refer to them as a partnership.

“We set the brokers down and told them let’s try a different approach,” Ruiz says. “If you understand us, perhaps you could communicate better, and they did. But we took the ‘worker-owned’ out of it. It’s just semantics at the end of the day.”

They had originally planned to re-open in June 2022, but the real estate saga waylaid that. It took so long, two of the initial six former Donna employees dropped off to seek other opportunities.

The spot Donna ended up in was much smaller than before — just 48 seats including the bar, compared to more than 100 seats at their former location in Brooklyn’s Williamsburg neighborhood. And it took a lot of sweat equity from the worker-owners themselves to do the build-out, even with a friendly contractor that also took longer than expected to find. The Working World provided a loan of $300,000 to finance the acquisition from Huckman, the build-out and some working capital to get the newly-converted Donna off the ground.

“Every kind of investment has a risk,” Maggio says. “They’ve persevered already for two years together. We lend to a project or a plan, and we’ve worked on this plan with this team for so long that we really see there’s commitment and it has integrity.”

To those inside Donna, the worker cooperative ownership structure is the opposite of risk — it makes them feel safer and more confident in their future together.

“Everything I learned from hospitality, for the most part, we’re doing the opposite of,” says Ruiz, who has 20 years of experience in bars and restaurants. “By design, you get chewed up and spat out in hospitality. We don’t want that. We want people to know that they could have a meaningful, fulfilling, financially stable life in New York City. It’s a lofty goal, but I think we could achieve it if we have the right structures in place.”

Since being hired as Donna’s bar manager in February, Bernardo has appreciated the trust her fellow workers have in her to craft the bar’s evolving mix of cocktails – finding ways to provide their customers with “escapism, but provide it more ethically,” as Bernando says. They don’t need a vote to approve changes to the cocktail menu. It’s on her, and the better she does, the better it is for everyone, including her. She’s been looking forward to unveiling some special cocktails for Pride Month.

“In my head the way that I’ve been making cocktails recently in the last couple of years has been with that postcolonial gaze,” says Bernardo, who is Filipina. “The past few months everyone has been using ube but nobody knew it was a Filipino ingredient. That’s been heartbreaking for me… If there’s something on this menu that’s sourced from somewhere, we’re telling those stories first before we talk about anything else.”

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Oscar is Next City's senior economic justice correspondent. He previously served as Next City’s editor from 2018-2019, and was a Next City Equitable Cities Fellow from 2015-2016. Since 2011, Oscar has covered community development finance, community banking, impact investing, economic development, housing and more for media outlets such as Shelterforce, B Magazine, Impact Alpha and Fast Company.

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