Local restaurants hoping for new injection of federal funds

FILE PHOTO: Proof of vaccination required upon entry to restaurants in Philadelphia
Customers drink and dine outdoors at the restaurant “Martha” in Philadelphia.
REUTERS/Hannah Beier

Clayre Cardi was stunned when she received an email alerting her that she would not be receiving federal grant money she had been promised to help keep her business afloat.

Cardi, the owner of Vue on 50, an event space in Center City, had begun re-hiring her small staff and was preparing to reopen. She was depending on federal dollars from the Restaurant Revitalization Fund

“I’m left worse now than I was had I not ever been approved for that grant,” she said. “Because I did things. I made decisions based on the fact that I was getting that money, that I was approved for that money.”

The U.S. Small Business Administration rescinded Vue on 50’s grant in June after a court ruled that the federal government acted in an unconstitutional and discriminatory manner in creating a priority window for establishments owned by women, minorities and veterans.

Now, industry organizations around the country are urging Congress to replenish the RRF to provide financial help to business owners like Cardi whose grants were pulled as well as those with pending applications.

Shutdowns early in the coronavirus pandemic devastated the hospitality field, and concerns over the rise of the Delta variant threaten to erase recent progress, those in the restaurant industry say.

In a recent survey, the National Restaurant Association found that six out of 10 Americans changed their eating-out behavior due to the variant. Nearly 20% said they stopped going to restaurants, and 9% reported having canceled reservations or plans, according to the organization.

“It’s still a very precarious time for restaurants,” said John Longstreet, head of the Pennsylvania Restaurant & Lodging Association. “People are getting more cautious.”

PRLA was one of 50 state groups, along with the National Restaurant Association, that signed onto a letter sent to Congressional leaders late last month advocating for a revival of the fund.

The RRF, which was created through the American Rescue Plan, was flooded with applications earlier this year and its $28.6 billion allotment was quickly drained.

Only one in three restaurants who applied received grants, leaving 177,000 business owners with pending applications, according to the National Restaurant Association. PRLA said more than 6,400 businesses in Pennsylvania seeking $1.5 billion were left unfunded.

Nearly 3,000 applicants nationwide had grants rescinded due to the court case, according to the New York Times.

Longstreet said PRLA is advocating for legislation that would dedicate an additional $60 billion to the RRF — which, he added, would allow all restaurant owners in the state who initially sought funding to get grants.

About $268 million was distributed to 727 food and drink establishments in Philadelphia through the fund, with an average grant of around $166,000, according to the Economy League of Philadelphia.

Just under 20% of all restaurants in the city received financial help through the program, the organization reported.

Cardi was left frustrated following her experience with the RRF; however, she is hopeful that Congress will replenish the fund and re-issue grant offers that were canceled.

Though Vue on 50 hosts weddings, 80% of its revenue is from corporate gatherings, and, over the past couple weeks, business clients have called off all bookings through December. Cardi doesn’t expect corporate events to return until the spring.

“So we’re not back at ground zero, but we’re not even close to being completely back to where we were beforehand,” she added.

Metro is one of more than 20 news organizations producing Broke in Phillya collaborative reporting project on economic mobility. Read more at brokeinphilly.org or follow on Twitter at @BrokeInPhilly

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