Small Business Administration Halts Opening Day Of Covid-19 Grant Applications For Distressed Theaters, Live Venues

The River Oaks Theatre in Houston closed last month. (Yi-Chin Lee/Houston Chronicle via AP)

A highly publicized opening day for distressed movie theaters and live venues to seek federal Covid-19 relief grants instead fizzled out, as technical difficulties forced the Small Business Administration to shut down its portal for taking applications.

“SBA is working closely with the portal vendors to reopen as soon as possible,” the agency said. “SBA will share advance notice of the time and date before the reopening so all applicants can be prepared and to ensure fair and equal access.”

It is unclear if the agency will be able to take applications on Friday.

Andrea Roebker, a spokesperson for the SBA, said in a statement, “Upon launching the Shuttered Venue Operators Grant (SVOG) application portal on April 8, technical issues arose despite multiple successful tests of the application process. After working with our vendors to address the issues as quickly as possible, the SBA determined at approximately 4:15 p.m. EDT to shut down the portal to ensure fair and equal access once reopened since this is first come first serve. This decision was not made lightly as we understand the need to get relief quickly to this hard-hit industry.”

The Save Our Stages Act, which provided $15 billion for live venues especially hard hit by the Covid-19 shutdowns and closures, was included in the Covid-19 relief package that passed late in December. But it has taken since then for the SBA to set up the application process, which included spelling out the criteria for applications and setting up the portal. The SBA also had issues last year when it opened applications for the Paycheck Protection Program, as a flood of demand crashed the system.

Since then, another $1 billion was added in additional funds via the American Rescue Plan.

On a Facebook forum applicants expressed frustration not just at the website glitch, but at confusion over the application process.

Those eligible for the SBA program — called Shuttered Venue Operators Grants — include live venue operators or promoters, theatrical producers, live performing arts organization operators, museum operators, movie theatre operators and talent representatives. Entities that applied and received PPP loans are eligible, but they no longer can receive those loans if they get the venue grants. Those that received loans after Dec. 27 will have the loan amounts deducted from the venue grants.

Larger entities, like theater chains with more than 500 employees and those that are publicly traded, do not qualify.

Those eligible can apply for grants equal to 45% of their gross earned revenue, with the maximum amount available for a single grant set at $10 million. The program set aside $2 billion for businesses with up to 50 full-time employees. The SBA also unveiled a checklist of documents that applicants must provide.

Meanwhile, on the eve of the opening date of the applications, the SBA’s Inspector General issued a report raising “serious concerns” with controls put in place to “address potential misuse of federal funds,” including the lack of sufficient staff for oversight. It also raised concerns about the lack of staffing for the office.

“Currently, the program office has one designated official and its staff are on temporary detail,” the inspector general, Hannibal “Mike” Ware, wrote in the report. “At this time, SBA has not formalized a plan for staffing this office relative to the volume of applications expected. The agency has also not defined the organizational structure for administering the program.”

One lawmaker, Rep. Blaine Luetkemeyer (R-MO), the top Republican on the House Small Business Committee, called on the SBA to “suspend the start of this program until serious and major changes are made to protect the integrity of both the program and taxpayer dollars.”

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