“We are past the breaking point.”
That’s the message the National Independent Venue Association sent to Congress on Wednesday in a fiery memo calling for the expedited release of $16 billion in promised emergency relief that was signed into law back on Dec. 27.
“We can’t hang on any longer,” the group said in its collective message. “We want to participate in America’s economic recovery, but our venues can’t afford to re-open our businesses. We have no funds left.”
The Shuttered Venue Operator Grant (previously known as the Save Our Stages Act) was intended to rescue thousands of concert halls, museums and theaters that were forced to close during the pandemic. But NIVA claims that of 17,000 applications, fewer than 100 have been approved to date.
Among the dozens of locally owned businesses on the waiting list include the Hi-Dive, Dazzle, Nocturne, Roxy Broadway, Levitt Pavilion, Swallow Hill Music Hall, Club Vinyl, Comedy Works, Red Rocks, The Boulder Theater, The Fox Theater, Larimer Lounge and Globe Hall.
Qualifying applicants have been promised grants of up to 45% of their gross earned revenue from 2019. Alex Weimer, Executive Director of the Bug Theatre, said his iconic space in northwest Denver will qualify for a $51,000 grant if approved, but he has heard nothing since applying. “If we get it, that means The Bug will be around for another couple of years, for sure,” Weimer said.
And if not?
“Back to the struggle.”
The administration of the fund has been bungled by the Small Business Administration from the start, said Chris Zacher, head of the Colorado Independent Venue Association and founder of the recently reopened Levitt Pavilion.
The holdup, Zacher said, is the SBA is understaffed and ill-equipped to administer the fund. The online application website crashed upon launch on April 8 and remained down for 16 days. Its algorithm then confused many companies’ employer identification numbers with the Social Security numbers of dead individuals. Still, the SBA announced in late May it expected that all Priority 1 applicants (those businesses that reported at least 90% revenue loss) would receive their aid disbursements by the end of May.
“That has not happened,” Zacher said. Instead, according to NIVA, only 50% of those applications have even been processed. Zacher said he believes the SBA’s lack of urgency “is actually driving more of our small businesses under – all while the $16 billion in emergency funding waits to be administered.”
Zacher, whose Levitt Pavilion is awaiting about $500,000 in relief funds, said the SBA’s comparatively effective administration of the $28.6 billion Restaurant Revitalization Fund, which wasn’t even signed into law until three months after the venues legislation, has actually worked against those music venues waiting for their relief.
“We are losing longtime waitstaff because we can’t compete with the wages offered by bars and restaurants who quickly received support through the Restaurant Revitalization Fund,” Zacher said. “And we are also losing professional staff to well-capitalized, larger corporate competitors.”
SBA Administrator Isabel Casillas Guzman, who was sworn in on March 17, was called before the U.S. Senate Committee on Small Business and Entrepreneurship on May 26 to explain the delay. She said the SBA had hired an additional 500 employees to review applications and that her staff was working around the clock to clear the backlog.
“We hope these funds will help our nation’s venues hold on until they can bring back the performances and experiences that are the lifeblood of our American culture,'' she said. “In my first 100 days as SBA Administrator, I can tell you that the constant drive to step up for our entrepreneurs has only intensified.”
Shortly after the COVID pandemic began in March 2020, NIVA predicted that up to 90% of small independent music venues would close without federal relief. That dire prediction has not yet come to pass, Zacher said, only because of assistance from city and state relief programs, and a record-breaking year for individual donations.
“I no longer think 90% of venues will close when all is said and done,” Zacher said, “But 40-60% is not out of the realm of possibility if this doesn’t turn around quickly.
“Many of us have exhausted our loans and whatever other assistance we’ve been able to garner at the state and local levels. I know people who have mortgaged their homes to keep their businesses up and running. And if they can’t get back up and running with normal capacity, they aren’t going to last.”
The landscape has radically shifted for the better in recent days, with a relaxing of state and local distancing orders that has allowed some indoor venues the opportunity to join their outdoor counterparts in reopening at near normal capacity. But that, Zacher said, is just the beginning of their economic recoveries.
“You can’t just change the rules and all of a sudden everyone is open and back to normal,” he said. “It’s not just like flipping a light switch. It will take these venues nine to 12 months to reach normal revenue levels, in part because they have not been able to plan lineups or even extend definitive offers to acts without knowing what restrictions might be in place.”
Not having their promised relief money in hand now, Zacher said, “is like being a pizza restaurant that doesn't have any dough – literally.
“There’s not a person out there in this industry who doesn't need this money to survive.”