Tyrus Joseforsky had resigned himself to never seeing any federal aid set aside to help his business. "I just made peace with the fact that it wasn't coming," he said.
Joseforsky is the owner of Flight Levelz Entertainment, a concert and music festival promotions company based in Indiana. He has spent the past six months waiting for the Shuttered Venue Operators Grant (SVOG) program to get up and running. That's the $16 billion program run by the Small Business Administration that's meant to help small independent venues, promoters, movie theaters and other entertainment spaces hit hard by the coronavirus pandemic. It was passed into law by former President Donald Trump in December, and only now are venue operators starting to see the promise of aid materialize.
Joseforsky is one of the lucky ones. He got a notice from the SBA last week saying that his application for the grant had been approved and that his disbursement was scheduled. But he says, "That money hasn't hit my bank account yet. I have no idea how long that's going to take."
Steve Schoaps is in a similar position. He's the owner of Strother Cinema, a two-screen movie theater in Seminole, Okla. He got his approval notice on Friday and said the SBA told him he'd see the money after Memorial Day. Memorial Day came and went, and he still hasn't received the money.
Yesterday, the SBA reported that only 31 grants have been awarded as of midday June 1st. That's out of more than 13,000 applications its received.
"Our process has been stuck in pending final review for a couple weeks now, with no updates beyond that," says Lauren Wayne. She's the general manager of the State Theatre in Portland, Maine. Last summer, Wayne and her team had to close their smaller sister venue, Port City Music Hall. The only thing keeping the State Theatre afloat is the ability to sell tickets to upcoming shows.
It has been a long and frustrating process for venue owners, particularly as similar SBA-run programs like the Restaurant Revitalization Fund have gone off smoothly. But the SVOG program has been plagued with delays and missteps. Most notably, when the application portal was first set to go live in April, the website crashed. And even now that it's back up, users are reporting technical and clerical issues. Esther Baruh is the director of government relations at the National Association of Theatre Owners. She says members of her organization have reported being erroneously placed on "do not pay" lists or have paperwork errors and no way to fix them. That's why she's pushing the SBA to institute an appeals process for venue owners running into such issues. "I think a human reviewer could understand that and fix it and move the application through the process," Baruh said.
"In the Small Business Administration's defense, this was a task that was thrown at them at the last second," said Schoaps, of Strother Cinema. "And this was a monumental task, because everyone was trying to get access to this."
It is true that the SBA had never done anything like the SVOG program before. The program is supposed to cover a wide array of venue types, all with different needs and expenses. There are also robust roadblocks in place meant to prevent fraud. SBA Administrator Isabella Guzman told a House committee hearing last week that part of the holdup was that the program had "lots of controls for eligibility requirements."
Which is to say that it takes time to make sure money isn't going to a large corporation, and to weed out the bars that occasionally host bands from the music venues that have bars. But that's time that many of the applicants are running short of, particularly as the SVOG disbursements are tiered such that business that lost 90% or more of their revenue will get first priority; then come the businesses that lost 70% or more.
Tobi Parks is the owner and artistic director of xBk in Des Moines, Iowa. She's in that second tier. As the U.S. begins to relax coronavirus restrictions and artists start to announce tours, venue owners say it's crucial for them to be able to start booking shows. But for Parks, without knowing when she's going to receive any money, it makes moving forward difficult. She can't offer any advances or guarantees to touring acts until she knows when the SVOG program can get her cash. "Because we have none," she said.
MARY LOUISE KELLY, HOST:
We have been keeping a close eye on the Shuttered Venue Operators Grant. That is the 16 billion in federal aid money for independent clubs, theaters and other entertainment spaces that shut down during the pandemic. It was passed into law by former President Trump back in December, and only now are venue owners slowly starting to see that money. But as NPR's Andrew Limbong reports, emphasis on slowly.
ANDREW LIMBONG, BYLINE: Let's meet a couple of the lucky people first. Tyrus Joseforsky is a concert and music festival promoter in Indiana who owns Flight Levelz Entertainment. After six months of waiting for the Small Business Administration to get the program up and running, accept applications and start sending money out...
TYRUS JOSEFORSKY: I just made peace with the fact that it wasn't coming.
LIMBONG: Then, last week he got a notice from the SBA that his application had been approved. He filled out and signed some paperwork.
JOSEFORSKY: And then the next day, I received notice that my disbursement was scheduled. Now, that money hasn't hit my bank account yet. I have no idea how long that's going to take. I actually called...
LIMBONG: He called the SBA, who told them that it could take days or weeks. Steve Schoaps is in a similar boat. He's the owner of Strother Cinema, a two-screen movie theater in Seminole, Okla. He said the SBA told him he'd see the money the day after Memorial Day yesterday.
STEVE SCHOAPS: Yesterday came and went, still haven't seen it.
LIMBONG: But Schoaps and Joseforsky are the fortunate ones here. A spokesperson for the SBA said disbursements have gone out to people and will continue to go out as fast as possible. But most of the more than 13,000 applicants are like Lauren Wayne, the general manager of the State Theatre in Portland, Maine.
LAUREN WAYNE: Our process has been stuck in pending final review for a couple weeks now with no updates beyond that.
LIMBONG: Last summer, Wayne and her team decided to close their smaller sister venue, Port City Music Hall. And keeping the State Theatre afloat has been a struggle.
WAYNE: All that's keeping us in the business is advance ticket sales, and that's money needs to be in the bank.
LIMBONG: It's been a long, frustrating process for venue owners, especially as similar SBA programs, like the Restaurant Revitalization Fund, have worked smoothly. But Strother Cinema owner Steve Schoaps does cut the SBA some slack.
SCHOAPS: In the Small Business Administration's defense, this was a task that was thrown on them at the last second, and this was a monumental task because everybody was trying to get access to this.
LIMBONG: To back up a bit, the Shuttered Venue Operators Grant was a never-been-done-before type project for the SBA, and there have been a couple of goofs. The day the application portal was first set to open, the site crashed. Once it did come back, users reported technical issues and confusing instructions, which is why Esther Baruh, the director of government relations for the National Association of Theatre Owners, is hoping for an appeals process for people who run into clerical issues.
ESTHER BARUH: I think a human reviewer could understand that and fix it and move the application through the process.
LIMBONG: No one at the SBA was available for an interview. But SBA Administrator Isabella Guzman did explain at a House committee hearing last week that some of the complexities behind the program were baked into the law.
(SOUNDBITE OF ARCHIVED RECORDING)
ISABELLA GUZMAN: The program design dictated by statutes, you know, obviously had lots of controls for eligibility requirements.
LIMBONG: How do you make sure a giant corporation isn't getting the money? How do you tell the difference between a venue with a bar and a bar that sometimes has shows? One of the other rules of the program is that it's tiered. So businesses that lost 90% of their revenue get first priority, then come people who lost 70%, which sounds great. But for Tobi Parks, owner and artistic director of xBk in Des Moines, Iowa, being in Tier 2 means time and cash is running out, even as the country begins to open up and artists begin to tour.
TOBI PARKS: We don't have the ability to offer advances or put down guarantees or do anything like that until we know what kind of cash that we're dealing with because we have none.
LIMBONG: But artists need places like xBk to stick around. Otherwise, where else are they going to play?
Andrew Limbong, NPR News.
(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.