After serving both the local food and entertainment communities for seven years, The Federal Bar, a massive restaurant and music venue space in Downtown Long Beach, will permanently shutter.

The news marks the second large space to close its doors in the Downtown area following the closure of Rock Bottom at the northwest corner of Ocean Boulevard and Pine Avenue.

Shutting down his Long Beach location had not been considered a possibility by owner Morgan Margolis. In fact, the last quarter before COVID slammed the hospitality industry, The Fed Bar in Long Beach, for the first time ever, had surpassed the pull of its other, more popular location in North Hollywood.

“I was so damn excited—for the first time, we were churning out business in Long Beach,” Margolis said. “For the first time since we opened [in 2013], we were going to outpace my money center that is North Hollywood. And now, I am sitting with an empty space in Downtown Long Beach and my entire staff laid off there. Everyone, including the general manager.”

Margolis admitted that Long Beach’s Fed Bar “hadn’t been consistent” in the restaurant and bar category, excelling more as a music venue with its underground vault space while its street-level restaurant space struggled. However, a recent investment in a kitchen had put the restaurant at a place where “it should have been all along,” Margolis said.

Rock Bottom Brewery in Downtown Long Beach to close permanently

Consistent food with consistent venue bookings led to Fed Bar breaking even, with the possibility of profiting. Tack onto this the seemingly endless discussion of converting the massive building into a hotel and Margolis felt there was something worth holding out for.

“‘A hotel would be great,’ is what I was thinking—so I held out, I really did,” Margolis said. “But when you’re consistently on the edge, especially when you finally got to the point of breaking even with a light at the end of the tunnel, something like this… It crushes you. At this point, we’re just trying to survive as a company.”

Margolis’ company, the Knitting Factory, is largely involved in live music, with dips here and there into hospitality with spaces like the Fed Bars, and a music label, Partisan Records. But the venue portion is his largest part of his business and he has had to lay off nearly 500 employees nationwide, from talent bookers to accountants. With no music shows and no revenue, the possibility of paying staff is impossible—even with support from the federal government’s PPP endeavor.

“It’s insanity,” Margolis said. “Absolute insanity: You’re given money, expected to pay your staff for maybe eight weeks, pay your landlord, and then hope for the best. We need grants. We need 15-year loans at 1%. We need the government to step in on insurance companies and enact loss of revenue claims.”

Though Margolis’ hope for such intervention remains low, his optimism on the local front remains high, noting that “there’s still 5% of me” holding out that his landlord will “come in, tell us, ‘Hey, let’s figure something out for the next few months,’ and we can try again. I’m still holding out for that. 

“I honestly just don’t want to get into a lawsuit with my landlord. I’m hoping that’s not the case because if it is, business owners across the country are gonna say in unison, ‘Get in line.’ Nobody has a crystal ball here—but I’d love to give this whole thing with Long Beach a try again if I can.”