Further Federal Grant Delays Put Independent Venues in Dire Straits

Concerts are on the calendar again at many Bay Area venues, and festivals like Stern Grove and Healdsburg Jazz will be in full swing later this month. To onlookers, it might seem like the live music industry is well on its way to recovery after over a year of COVID shutdowns.

But behind the scenes at many small concert halls and clubs, it’s a different story. Most venues in California are still waiting for long-delayed emergency funding from the federal government’s Shuttered Venue Operators Grant (SVOG), which would provide much-needed cash flow required to resume business—45% of each venue’s 2019 gross revenue, to be exact. For many, that’s hundreds of thousands, if not millions, of dollars.

“In all honesty, independent venues in San Francisco are probably in a worse spot today than they were even just a couple months ago because of this delayed funding,” says Casey Lowdermilk, assistant general manager of Bill Graham Civic Auditorium and an organizer with San Francisco Venue Coalition and National Independent Venue Association. “I’m hearing from venues that they don’t have enough capital to buy liquor to stock their bars, they don’t have enough capital to pay artist deposits.”

The rollout of the $16 billion SVOG fund has been troubled from the start. First introduced in Congress in July 2020, the Save Our Stages Act—which created the grant—was only signed into law in December of that year, after numerous independent venues across the country had already shut down permanently, and others took on significant debt. After several more months of silence, the Small Business Administration (SBA), which administers the grant, opened applications on April 8 but shut down the portal the same day because of technical issues. Finally, applications reopened on April 26. And although 14,020 applications were submitted nationwide, the SBA has only awarded 90 grants, with 16 of those to venues and events producers in California.

“The feel to the whole thing has been rather adversarial, as opposed to a program that was designed to help businesses,” says Christopher White, owner of San Francisco’s Rickshaw Stop. “It feels as if there is an enormous amount of distrust from the federal agencies about our industries.”

White says the SBA notified him that his name is on several Do Not Pay lists. He’s trying to get to the bottom of whether he’s one of the venue owners that was mistakenly classified as deceased, as the New York Times reported last week.

“What’s actually been the most difficult is the SBA will give no instruction on how to rectify the problems,” he says. “If you email the SBA, they tell you to call the hotline. If you call the hotline, they will tell you to email.”

After the SBA missed its June 9 deadline to award grants to all venues that had lost 90% of business during the pandemic, the National Independent Venue Association sent strongly worded letters to Congress and the SBA.

“We are past our breaking point. We can’t hang on any longer. We want to participate in America’s economic recovery, but our venues can’t afford to re-open our businesses,” read the letter to Congress. “We have no funds left—many of us have exhausted our PPP loans, our EIDL loans and whatever assistance we’ve been able to garner at the State and Local levels. We don’t have the capital to restock food and drinks for the customers we hope to welcome back or make offers on shows. We are losing professional staff to well-capitalized, larger corporate competitors. We are losing longtime wait staff because we can’t compete with the wages offered by bars and restaurants who received support via the quickly administered Restaurant Revitalization Fund.”

In the meantime, state and local funding could temporarily ease the burden for venues in California and San Francisco. The city is preparing to give out grants from its $3 million Music and Entertainment Venue Recovery Fund, and $150 million in state funding for music venues, live events and minor league sports is awaiting the governor’s approval. But both grants will award venues only tens of thousands of dollars. For a business like Rickshaw Stop, about half a million dollars is what’s truly needed to get things up and running, White says.

“We don’t have trash service anymore, we don’t have vendors anymore, we’re not paying our rent, we’ve let our insurance lapse,” says White. As far as the state and local grants, “that’s sort of runway. They don’t really cover anything, but we’re still thankful to get them.”