Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, April 4, 1993 TAG: 9304020043
SECTION: BUSINESS PAGE: F-1 EDITION: METRO
SOURCE: KATHLEEN WILSON STAFF WRITER
DATELINE: LENGTH: Long
DOING A TAXING LUNCH
IMAGE COUNTS for plenty when dining on the job, so well-fed Roanokers are ready to swallow any change in the business lunch tax deduction.
WHEN Lin Chaff moved to town a few years ago, she got some business advice: "In Roanoke, in order to be successful, you must look successful."
Hence Chaff's membership at the Jefferson Club, a private drinking and dining spot atop the Dominion Bank Building.
She admits she gulps every month when the downtown club's invoice arrives. But it doesn't matter to Chaff whether the Internal Revenue Service allows her to deduct 100 percent, 80 percent or just 50 percent of the expense from her business's taxes.
The Clinton administration has proposed an overhaul of the nation's tax laws that would limit to 50 percent of the value of business entertainment expenses as tax deductible.
"There's never been a month I didn't think it wasn't worth the investment," she said.
Chaff estimated the cost of lunch for two there at about $25. And considering she does that two or three times a week, Chaff's annual bill for business lunches at the Jefferson Club is easily $3,500 or more.
It doesn't make much sense to business people that only 50 percent will be deductible. "When I take a client to the Jefferson Club, it's because I want to give them 100 percent of my attention," she said. But even if the tax deduction on business entertainment is cut, Chaff doesn't expect to change her lunch habits.
Chaff is in public relations - a field where making a good impression is especially important. But the club's other business and professional members probably share similar beliefs about the ability to wine and dine clients in the proper setting.
"It has become an extension of the work day," explained John Jessee, a medical malpractice lawyer with Woods, Rogers & Hazlegrove, a downtown Roanoke law firm.
To Jessee, the business lunch is as much a tool of his trade as his telephone and briefcase. He describes President Clinton's proposal to reduce the percentage deductible as unfortunate.
"But I don't think the tax change will have any effect on the way we do our business," he said.
Jessee said he is certain he still will take his clients to lunches at the Roanoke Country Club, where he is a member.
Though Kathryn Pruitt, assistant general manager for Valley Metro, is not in the business of entertaining others - "We're government funded, so that's a no-no." - she has been on the receiving end of many a business lunch.
Bankers, insurance agents, and advertising professionals have taken her to such upscale haunts as the Jefferson and the Shenandoah Club, another private downtown Roanoke dining facility. Others take her public to restaurants, chiefly Corned Beef & Co. and Billy's Ritz on the Market.
Conversation at these lunches generally does revolve around business. But it's not from those trying to pitch and woo Valley Metro. Usually Pruitt is taken out by the firms that already serve the bus company.
"I wouldn't want anyone to think we'd choose one company's service over another just because they bought us a better meal," Pruitt said.
And while she is not a member of either of the downtown clubs, she recognizes why others find membership there crucial.
"Belonging to the Jefferson Club is a status thing," said Pruitt. "It's upscale and has a very good image. Those who belong, I imagine, hope some of that will rub off on them."
She said that in many circles it is important to feel comfortable and be recognized by other important people as an important person.
Joseph Stephenson, president and chief executive of Roanoke-based Shenandoah Life Insurance Co. shares Jessee's view of the business lunch - and the increasingly popular power breakfast - as a vital extension of the work day. But Stephenson thinks the change tax law could cripple even a good restaurant.
"It's just not a smart way to make money for the government," he said.
Stephenson says his firm will remain vigilant of its entertainment expenses. Thanks to Clinton's proposal, Stephenson said he may start picking up lunch at Shenandoah's employee cafeteria and eating at this desk so he can do his business lunches over the phone.
"And maybe from now on I'll only take Republicans out to lunch," he joked.
Like many local companies, Shenandoah Life has paid for and will continue to pay for corporate memberships in the Jefferson Club.
That's just part of the reason Linda Fisher, membership and catering director for the Jefferson Club, doesn't think a tax change would drastically affect the club's lunch business.
But Linda Williams of Billy's Ritz expects thats her restaurant will feel the crunch.
"We've never made up the business we lost when the Hotel Roanoke closed," said Williams. "The hotel used to send us a lot of business."
She says Billy's felt another blow when when First Union Corp. took over Dominion Bank. "I think a lot of people are already anticipating losing their jobs" there, she said.
Another downtown restaurant, Alexander's, opened for lunch just about every day of the week for most of its 14 years. Gradually they curtailed their lunch hours and today serve lunch only on Wednesdays.
Bridget Meagher of Alexander's says the Wednesday lunch is not intentionally geared to attract business people.
"But we do offer good service and good food at a good price," she said of what her business lunch clientele wants.
One of the things she finds charming about Roanoke is "that people here seem to be as comfortable doing business over a hot dog at the weiner stand as they are in the Jefferson Club or in our restaurant."
Indeed, not every business lunch happens downtown.
Chaff said her favorite place is Wildflour Cafe & Catering at Towers Shopping Center, where she's seen community leaders and power brokers. "And the place only seats about 30 people."
Stephenson said he lunches at Steak and Ale and Red Lobster.
And Bill Thomason, partner and executive vice president with The Packett Group, recently took one of his advertising agency's clients to El Rodeo for a power lunch.
He thinks it's important to make the distinction that business lunches are not synonymous with entertainment.
"We operate leanly, maximizing our time and our clients are the same way," Thomason said.
"But we still consider business lunches a line item - a regular cost associated with doing business."
Memo: ***CORRECTION***