Not enough money to go around in the Restaurant Revitalization Fund prolongs struggles for local operators in the hard-hit industry

click to enlarge Not enough money to go around in the Restaurant Revitalization Fund prolongs struggles for local operators in the hard-hit industry
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Owners Lisa and Scott Poole qualified for $600,000 in federal aid, but got none.

When long-awaited federal aid for the nation's pandemic-stricken restaurant industry finally became available in May through the $28.6 billion Restaurant Revitalization Fund, restaurants across the Inland Northwest thought help was here at last.

For some, it was. According to data released by the U.S. Small Business Administration, which oversaw the application and distribution process, more than 230 restaurants in the Inlander's coverage area of Eastern Washington and North Idaho received roughly $53 million of that federal aid.

Individual grants, ranging from $3,400 awarded to a boba tea shop in Pullman to more than $3 million received by eateries under the umbrella of the Davenport Hotel, were determined by calculating a business's estimated gross revenue losses in 2020, minus any funding from the federal Paycheck Protection Program.

Money from the Restaurant Revitalization Fund, or RRF, can be spent by recipients through March 2023, and can be used to cover both past and future operational costs, including employee paychecks, rent, supplies, personal protective equipment and even construction of outdoor seating.

Unfortunately for more than half of the 370,000 restaurants across the U.S. who initially applied, that financial lifeline never came. Only about 105,000 RRF applicants were awarded funding before the $28.6 billion pool was exhausted. Total demand surpassed $75 billion. Calls for Congress to replenish the RRF for another round to aid businesses missed have been loud ever since.

In Spokane, one of those many unfunded requests came from Poole's Public House, a sports bar and restaurant with locations on the South Hill and the Northside.

Co-owner Lisa Poole says Poole's RRF application indicated that the business lost $1.1 million in gross revenue in 2020, and they qualified to receive $600,000.

"We are still trying to recover for that loss in revenue, through no fault of our own," Poole says. "We were forced to close down, and that loss, that is money we can't pay employees and rent, and you know, that is a lot of money for a restaurant."

While Poole's did receive a Paycheck Protection Program, or PPP, loan, the first round of the federal program required funds be used within eight weeks.

"We feel really fortunate that because we got PPP we could stay afloat, and we've had great support from our customers," Poole says. "But the RRF would help make up for the major losses we still took and help us keep running the business. We lost all our savings — we had to use everything to stay afloat."

Poole says she thinks the distribution of the RRF could have been handled better by the SBA, and should have prioritized all small and medium-sized companies.

Priority was, however, given to applicants from restaurants majority-owned by women, veterans and racial minorities. Once it became clear that demand from all applicants, including nonpriority groups, was far outpacing the RRF's allocations, a pair of white male business owners, represented by former Trump administration officials Stephen Miller and Mark Meadows, sued the SBA, arguing that moving women, veterans and minorities to the front of the line was discriminatory.

As a result, a judge in Texas ordered the SBA to stop distributing any outstanding funds to businesses in the priority demographic, which meant many such restaurant owners who'd previously been approved were notified that they'd no longer receive a grant. It's unclear how many, if any, local restaurants were affected, and Spokane's SBA office doesn't have information on those affected.

Kori Henderson and Paul Blacketer, owners of Whim Wine Bar inside River Park Square, had also been desperately hoping to receive an RRF grant. The couple's business didn't qualify for the Paycheck Protection Program because its opening date in late summer 2019 was after the eligibility cutoff. Just months later, Whim closed for more than a year, from March 2020 to late May 2021. The day after applying for the RRF, Henderson told the Inlander that if Whim was approved, "it would solve all our problems."

After waiting weeks for a response from the SBA, Whim never received anything.

"It's impossible for me to put into words the massive letdown of not receiving the funds," Henderson says now. "To have that dangling in front of us, something we were finally eligible for after all this time, it's just crazy. I'd rather it just hadn't been available to us at all than to experience this disappointment."

Like Poole, Henderson wishes the money would have been more equitably distributed among businesses.

"I want every business to survive this, but I do think the money could have been spread out more evenly," Henderson says. "There are restaurants that received enormous amounts of money from RRF, after they had already received other loans and grants that we were not eligible for."

As spread of the coronavirus delta variant continues to cause record hospitalizations across the U.S., Henderson is also concerned there could be additional lockdowns or restrictions for restaurants and bars in the coming weeks and months. She's already noticed business has slowed down again since Whim reopened at the start of summer. Back then, she'd been hopeful the vaccine's growing accessibility would bring more stability for small businesses.

"It's really unpredictable. This should be over with now that there is a vaccine," she says. "There is so much misinformation out there. It's killing people and killing businesses."

"To have that dangling in front of us, something we were finally eligible for after all this time, it's just crazy. I'd rather it just hadn't been available to us at all than to experience this disappointment."

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Among restaurants in the Inland Northwest that did receive Restaurant Relief Fund money is the Spokane-based chain Twigs Bistro & Martini Bar.

Twigs, with four locations in the Spokane area, received the second-highest RRF award in the region at about $2.4 million, according to the SBA, behind the Davenport Hotel's $3.1 million. Separately, Twigs' Vancouver, Washington, location also received $1.7 million, which was applied for under the company's Spokane headquarters address, although those funds must be used for that location, says Twigs' President Trevor Blackwell.

While that's a large sum compared to the bulk of RRF receipts in the area (the average award in the region was about $226,000), Blackwell says the company still had to close three of its locations outside Washington state — two in Utah and one in Texas. And, he says, Twigs' grant amount directly reflects the company's 2020 sales losses.

"It doesn't even cover all the losses we had; the locations that didn't receive any had debt and obligations we owe," Blackwell says. "It's been extremely difficult. And on top of that, trying to operate the restaurants we do still have right now — I've been in Vancouver on the line cooking for the last three days straight because we don't have enough staff."

At least one local RRF recipient has closed since receiving its award, Post Falls French eatery Fleur de Sel, which got $158,775.

One local restaurant at the center of controversy when it defied Washington Gov. Jay Inslee's ban on in-person dining twice last year, The Black Diamond in Spokane Valley, received $486,867 from the RRF. While other restaurants in the area complied with statewide orders beginning in March 2020 and again in November 2020, Black Diamond owner Brandon Fenton flouted the restrictions and opened his bar anyway, risking a suspension of its liquor license.

Fenton, now running for a seat on the Spokane Valley City Council against current Spokane Valley Mayor Ben Wick, says the federal funding helped his business and employees recover from both closures, which he notes the venue initially complied with.

"It isn't fair that any business was shut down, and it pains me that some had to permanently close," Fenton says. "As a business, we suffered from the shutdown and therefore applied just as so many others did for aid. The aid should not be dependent on our political views or how we stood up to help our employees so that they were able to have a Christmas with presents under the tree for their kids."

While restaurant operators may be wary, more federal relief could be on the way.

Since the initial round of the RRF ran out, three bipartisan attempts at replenishing the fund have been introduced in Congress. The last attempt in early August for a $48 billion refill was blocked. Two prior unsuccessful attempts each sought to add $60 billion to the RRF.

Washington Hospitality Association President Anthony Anton says he and his team have "been working really hard to backfill the remaining applicants through Congress," and that currently, all but one member of Washington state's congressional delegation support that call.

"We are hopeful that, not in this upcoming package, but the one after that, that the Restaurant Relief Fund will be there," Anton says.

In the interim, local restaurants that were unable to secure help during the initial round of the RRF are encouraged to contact Spokane's SBA office to find out if they're eligible for other local, state or federal relief programs, says its manager, Joel Nania.

"We are working with any businesses who call us for assistance," Nania says. "We have a number of other programs available to them." ♦

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Chey Scott

Chey Scott is the Inlander's Editor, and has been on staff since 2012. Her past roles at the paper include arts and culture editor, food editor and listings editor. She also currently serves as editor of the Inlander's yearly, glossy magazine, the Annual Manual. Chey (pronounced "Shay") is a lifelong resident...