When the pandemic forced Crowbar, a music club in Tampa, Fla., To close last year, Tom DeGeorge, the primary owner, raised more than $ 200,000 in personal loans to keep the business going, including one that used his liquor license as collateral . .
More than a year later, the club has reopened with a few reduced capacity events, but the company is still operating in the red, Mr DeGeorge said in an interview. So on Thursday, Crowbar was one of thousands of music venues, independent movie theaters, and other arts and entertainment institutions attempting to apply for a share of $ 16 billion in federal aid.
“We lost an entire year of concerts in the blink of an eye, which amounted to nearly $ 1 million in revenue,” said Mr. DeGeorge. "That's why we need this scholarship so badly."
The help comes from the Shuttered Venue Operators Grant, which was approved by Congress late last year after months of lobbying by an ad hoc coalition of music venues and other groups warning of the loss of an entire sector of the art economy.
Like many others, Mr. DeGeorge spent hours on Thursday trying to submit his application through the online portal set up by the Small Business Administration, which administers the program. But problems with the site led to confusion and frustration throughout the day, as applicants reported that they could not register or uploads had been blocked – an annoying result for companies who have waited so long for help. The administration said on Twitter Thursday afternoon that it was aware of a "technical problem" and was in the process of fixing it.
For music venues in particular, the past year has been a struggle to survive, with the owners of local clubs running crowdfunding campaigns, selling T-shirts and racking their brains for a creative way to raise money. For the holidays, for example, the Subterranean club in Chicago agreed to put the names of patrons on its marquee for donations of $ 250 or more.
"It has been the busiest year," said Robert Gomez, Subterranean's primary owner, in an interview. "But it was all about," Where am I going to get money? "
As the scholarships are awarded on a & # 39; first-in, first-out & # 39; basis, those seeking money are too in a race for the money: once the $ 16 billion is used up, those in line are sent away empty-handed.
As has happened with other utilities operated by the agency – most notably the Paycheck Protection Program, a $ 746 billion relief effort – the opening of the closed sites program was riddled with complexity and confusion.
The agency posted a 58-page guide for applicants late Wednesday night and then quickly took it offline. A revised version of the guide was posted minutes before the portal opened on Thursday. (An agency spokeswoman said the guide needed to be updated to reflect "some last-minute system changes.")
And less than two hours before the agency started accepting applications, the Inspector General sent a warning warning of "serious concerns" about the program's waste and fraud controls. The Small Business Administration's current audit plan "exposes billions of dollars to potential misuse of funds," said the inspector general wrote in a reportBack then, many anxious site operators struggled to get their applications in.
Successful applicants will receive a grant equal to 45 percent of their 2019 gross earned income, up to a maximum of $ 10 million. Those who lost 90 percent of their earnings (compared to the previous year) after the coronavirus pandemic broke out have a priority window of 14 days to receive the money, followed by another 14 days for those who lost 70 percent or more. If any money remains after that, it will go to applicants who suffered a 25 percent revenue loss in at least one quarter of 2020. Locations owned by major corporations, such as Live Nation or AEG, are not eligible.
The application process is comprehensive, with detailed questions about site budgets, staff and equipment.
"They want to make sure you don't just put a piano in the corner of an Italian restaurant and call yourself a music venue," said Blayne Tucker, an attorney for several Texas music venues.
Music venues can even be confronted with the subsidies many dry months before touring and live events return to something like a prepandemic level. Despite encouraging progress in vaccinations, the varying reopening plans by state and local governments, and preparation plans by itinerant artists, will likely mean the calendar of events will remain bright in the summer or fall, promoters and talent agents said.
The grant program also provides assistance to Broadway theaters, performing arts centers, and even zoos, which share many of the same economic struggles.
For example, the Pablo Center at the Confluence, in Eau Claire, Wisconsin, was able to raise about $ 1 million from donations and grants during the pandemic, but is still $ 1.2 million short of annual fixed operating costs, Jason Jon Anderson said. executive director.
“By the time we reopen, October 2021 at the earliest, we will have been closed longer than we were open,” he added. (The center opened in 2018 at a cost of $ 60 million.)
The thousands of small clubs on the national concert card have no access to major donors and in many cases have been living on smoke for months.
Stephen Chilton, owner of the 300-seat Rebel Lounge in Phoenix, said he took out "a few hundred thousand" in loans to keep the club afloat. It reopened in October with a pop-up coffee shop inside, and the club hosts some events, such as trivia competitions and open mic shows.
"We lose a lot less than we lost when we were completely closed," said Mr. Chilton, "but it doesn't make up for lost revenue from organizing events."
The Rebel Lounge hopes a grant will help it survive until it can bring back a full number of concerts. And if its application is not accepted?
& # 39; There is no plan B, & # 39; said Mr. Chilton.