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Small leisure companies are combating for Covid aid grants

Like many neighborhood playhouses across the nation, the Studio Theatre shuttered its doorways in March 2020 for coronavirus pandemic and didn’t absolutely reopen for greater than a yr.

The gross sales the Little Rock, Arkansas, theater collected from streaming occasions on-line or holding out of doors performances did little to cowl the money owed that started to pile as much as pay its hire, utilities and insurance coverage. Then, its treasurer, Amanda Kennedy, heard a few potential lifeline: the Small Enterprise Administration’s Shuttered Venue Operators Grant program. The $16 billion fund was created to help sustain the live entertainment industry. After reviewing the small print of this system, Kennedy anticipated the Studio Theatre would have the ability to search $135,000 in grants.

Kennedy, an authorized public account, stated she considered this system as “a godsend that we desperately wanted.”

“We now have loans that I don’t know how lengthy it’ll take for us to retire … with out the grant cash,” she stated. “It pains me to consider that sort of burden being placed on this theater.”

Amanda Kennedy (heart) is the treasurer of the Studio Theatre in Little Rock, AR.

Jennifer Schlesinger | CNBC

However Studio Theatre’s request for assist was denied. It now finds itself amongst a bunch of small operators asserting that they’re certainly eligible to entry the help. Some are taking authorized motion, as they noticed comparable companies given totally different responses. Some say the reasons about why they have been denied grants have been missing, and that uneven distribution has left them at a aggressive drawback throughout the trade. Past that, dwell occasions advocates say the broader trade was omitted of this system altogether, and now the race is on to get a brand new assist bundle to the thousands and thousands who stated they have been left in the dead of night.

‘I did not see that coming in any respect’

“I did not see that coming in any respect,” Kennedy stated, recalling her expertise. “We virtually had the funds expended in our minds — in our budgets — as a result of it was just about a certain factor that it was coming.”

Final April, Kennedy had logged on to the portal on its first day to submit the theater’s software. Like many others, she was unable to get by as glitches plagued the rollout. The portal itself closed down on its first day. Weeks later, upon the portal’s relaunch, the applying was submitted.

Kennedy felt assured. However an e-mail got here in July asking Kennedy to examine this system’s portal. As soon as logged in, she stated she discovered the theater had been denied however not why. Kennedy appealed the choice and acquired an e-mail in August. As soon as once more, the theater was denied with out an evidence.

She held out hope that the denial was a mistake. The theater had run right into a separate problem making use of for assist by the Financial Damage Catastrophe Mortgage program. There was a case of mistaken id that held up funding, however that had been resolved. This time round, it wasn’t.

The Studio Theatre in Little Rock, AR

Jennifer Schlesinger | CNBC

To make certain, the SVOG program has helped many venues and operators since its launch this spring. Greater than 12,000 preliminary and supplemental grants have been funded, price greater than $13.6 billion. However greater than 4,500 candidates have been declined, in keeping with SBA information.

Reviewing the instances

Matthew Mokwa, a associate at The Maher Regulation Agency in Winter Park, Florida, is reviewing potential claims in opposition to the SBA with a staff drawn from two different corporations in Missouri and Washington, D.C. Of the almost 200 inquiries the group has acquired, the authorized staff has formally reviewed greater than 100 particular person instances, Mokwa stated. A big quantity seem to fulfill the SVOG statutory standards, suggesting there may be advantage to take motion in opposition to the SBA, he stated. So far, about 25 instances have been filed, Mokwa stated, along with his agency representing six.

The reasons these shoppers and potential shoppers acquired about their denials have been “inadequate,” Mokwa stated. He added that getting extra info from the SBA has not been an choice for many.

For instance, one shopper known as the company a number of occasions a day for a lot of days in an try to get extra details about a rejected software, however was unable to succeed in anybody, Mokwa stated. What’s extra, many rejected candidates can identify between 5 and 10 of their closest rivals who’ve been funded, creating an uneven taking part in discipline for operators attempting to make a comeback, he stated.

“That is an unintentional consequence of this program, however by not rolling it out evenly, what the federal government has inadvertently completed is picked winners and losers inside sure industries,” Mokwa stated. “It is actually heartbreaking.”

The SBA declined to touch upon pending litigation.

The Studio Theatre is consulting with an lawyer to see if it has grounds for a lawsuit. As a part of its enchantment, its software underwent a complete overview, Kennedy stated.

The e-mail Amanda Kennedy acquired saying the Studio Theatre’s enchantment was denied.

Supply: Amanda Kennedy

Based on emails considered by CNBC, the SBA advised Kennedy the Studio Theatre’s software was denied as a result of, as a nonprofit, it would not pay its performers. However the SBA’s eligibility guidelines seem to exempt nonprofits from having to pay performers.

“Offered the occasions a nonprofit dwell performing arts group levels are produced and managed primarily by paid staff, using volunteers within the manufacturing casts wouldn’t disqualify it,” the SBA said in its list of frequently asked questions about the program.

Grants have been funded for neighboring nonprofit neighborhood theaters together with the Argenta Group Theater in North Little Rock and the Royal Gamers in Benton, Arkansas, in keeping with each organizations and the SBA’s program information. Each theaters are almost equivalent to the Studio Theatre in materials features, together with not paying performers, Kennedy stated.

“It has been virtually a yr of actual monetary hardship, but additionally emotional hardship, being advised ‘Here is one thing that may provide help to, this is a lifeline for you,'” Kennedy stated. “After which that being suspended, and that hope being denied again and again and over.”

‘It is not constant’

Mike Savas has discovered himself in the identical place as Kennedy, having additionally had a grant denied, and having the rejection stand after enchantment. Savas runs Superfan Dwell, a live performance and occasions promotion enterprise based mostly in Clearwater, Florida. He sells VIP experiences to followers as an occasions promoter and has lately labored on excursions with Genesis and the Massive Apple Circus.

Mike Savas runs SuperFan Dwell, a live performance and occasions promotion enterprise.


Savas sought greater than half 1,000,000 {dollars} in assist and stated his enterprise has come near chapter ready for assist. As well as, he stated his personal associates and rivals that run comparable companies have been accepted. He feels the explanation behind his denial was unclear and is contemplating suing, however is anxious about taking up extra debt.

“It has been sloppy, and it isn’t constant. … If everybody in the identical bucket did not get accepted, high-quality,” he stated. “However to have one entity getting accepted, one other one not getting accepted in the very same enterprise. That does not make sense.”

An individual acquainted with the federal grant course of, who wasn’t licensed to talk with the press, stated that whereas grant purposes are reviewed by people adhering to standardized standards, particular person software reviewers could use numerous thresholds or differing information interpretations all through software screening, programmatic or monetary overview processes. Every may influence the grant awarding section which, in flip, may result in mistaken denials.

The SBA declined to touch upon the small print of the screening course of. However stated it has been each “artistic and devoted” in offering candidates with each alternative to obtain funding.

The company has invited greater than 5,000 candidates to enchantment SVOG decline selections, and about 3,000 companies accepted, stated Diedra Henry-Spires, a senior advisor on the SBA’s Covid packages, in a press release. The SBA additionally invited round 2,000 grant recipients to have the quantity of their funding awards reconsidered and about 800 grantees have accepted that supply, she stated.

The SBA did not specify what number of candidates had a previous choice upheld or what number of have been awarded extra funding.

In an interview for this story, SBA Administrator Isabel Guzman stated the appeals course of and overview was to make sure that all candidates may have “their honest shot” at accessing funding, and to make certain purposes have been pretty thought of. With out commenting on particular person purposes, Guzman stated that the eligibility standards are complicated and that whereas candidates could seem comparable, they could not turn into. The administrator added if candidates have been formally denied, extra detailed info can be supplied as to why they weren’t eligible, if that was the case.

The Small Enterprise Administration Administrator Isabel Guzman (second from proper) discuss concerning the Shuttered Venue Operator Grant program on the Blue Notice Jazz Membership in New York Metropolis.

Jennifer Schlesinger | CNBC

“It might be issues like, for instance, a museum. One has precise mounted seating, which is a requirement, and the opposite one would not,” Guzman stated. “Perhaps it is an auditorium, however with detachable chairs. And in order that’s one thing that might not be clear to the general public eye, nevertheless it’s a nuance. Their construction organizationally, their possession may issue into their eligibility. There are particular points that the person software may reveal that, after all, we can not make public.”

Increasing assist eligibility

In the meantime, advocates for broader assist past the SVOG program are nonetheless hopeful Congress will come by.

The Dwell Occasions Coalition was shaped in April 2020, when the coronavirus pandemic began, and the group stated it represents greater than 1 million small companies that make use of 12 million folks and are price $872 billion in financial influence. The group stated 92% of its small enterprise members — who symbolize commerce reveals, company occasions, weddings, native county gala’s and extra — didn’t qualify for aid below this system or the Restaurant Revitalization Fund.

Whereas SVOG helped shuttered venues, it’s clear this system did not “go far sufficient” to help the behind-the-scenes employees who make dwell occasions occur, stated Wendy Porter, the group’s vice chair of presidency affairs.  

Wendy Porter is an occasion planner and the vice chair of Authorities Affairs for the Dwell Occasions Coalition.


“You are solely saving the levels,” stated Porter, who owns an occasions enterprise that has been shuttered. “You are lacking the remainder of our trade, which is all the service firms — the planners, the lighting and AV folks. All people that makes an occasion come to life was omitted of that language. They needed to save lots of the venues, however frankly, in case you do not save the remainder of us, all you have got is an empty room.”

The group contacted lawmakers to push for broader assist, nevertheless it was clear a bigger assist bundle would have been more difficult to cross on the time. There’s lively laws being labored on in each the Home and Senate to get a lifeline to entrepreneurs working behind the scenes, in keeping with the coalition. However Porter stated some members have misplaced their companies over the past 15 months.

Whereas SBA packages just like the Paycheck Safety Program and EIDL supplied a shorter lifeline, the dwell occasions trade has but to totally reopen. The coalition’s fall survey confirmed almost half of respondents stated between 60% and 100% of their fall and winter bookings have been canceled because of the delta variant. And omicron is wreaking comparable havoc, with Broadway reveals canceling performances, journey being disrupted and client confidence taking one other hit.

“It is actually onerous to look at all of my colleagues undergo this. These are folks’s livelihoods that they’ve labored on for many years. And nobody is listening,” Porter stated.

In the meantime Savas is on the street once more, discovering artistic methods to remain afloat along with his enterprise. He is hopeful he can proceed touring and providing fan experiences, regardless of the burden of debt and uncertainty looming over the grant course of.

“It has been like getting on the world’s worst curler coaster. There’s been ups. There’s been downs. There’s been 360 spins,” he stated. “Not realizing if the trade is coming again, not realizing if the reveals are going to occur. Not realizing if we’re going to have the ability to pay our payments, whether or not we’re going be accepted or denied. And it is simply been terrifying — and thrilling — and disappointing. Tears and cheers all alongside the best way.”

“I simply need to get off this journey, get my cash, and return to work,” he stated.

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