Cultural Venues’ Quest for Billions in Federal Help Is Halted by Glitch

As the federal government ready on Thursday to begin taking purposes for a $16 billion reduction fund for music golf equipment, theaters and different reside occasion companies, hundreds of determined candidates waited eagerly to submit their paperwork proper at midday, when the system was scheduled to open.

After which they waited. And waited. Almost 4 hours later, the system was nonetheless not working in any respect, sending candidates into spasms of hysteria.

“That is an absolute catastrophe,” Eric Sosa, the proprietor of C’mon Everyone, a membership in Brooklyn, tweeted on the company.

Shortly after 4 p.m., the Small Enterprise Administration — which runs the initiative, the Shuttered Venue Operators Grant program — deserted its effort to salvage the damaged system and shut down it down for the day. No purposes had been processed.

“Technical points arose regardless of a number of profitable checks of the applying course of,” Andrea Roebker, an company spokeswoman, mentioned in a written assertion.

After discussions with the distributors that constructed the system, the company determined “to close down the portal to make sure truthful and equal entry as soon as reopened, since that is first-come, first-serve,” Ms. Roebker mentioned. “This determination was not made calmly as we perceive the necessity to get reduction shortly to this hard-hit business.”

In social media boards and Zoom calls, pissed off candidates vented and shared their anger.

“It’s onerous to maintain listening to ‘assistance is on the way in which’ after which not be capable of apply,” mentioned Tom Weyman, the director of programing on the Columbus Theater in Windfall, R.I. “I don’t suppose any of us thought the applying course of could be completely easy, however that is life and dying for our venues.”

The meltdown echoed issues the company had final yr in taking purposes for the Paycheck Safety Program, which it additionally oversees. When that program opened, the company’s overwhelmed programs seized up — and the identical factor occurred once more, weeks later, when a brand new spherical of funding grew to become accessible.

Candidates for the grant program had been incredulous that the company was not higher ready — particularly as a result of the funds are to be distributed primarily based on the order through which individuals apply. Those that get their purposes in early have the perfect likelihood of getting help earlier than the cash runs out.

“It pits venues in opposition to one another as a result of we’re all mad-dashing for this,” Mr. Sosa, the Brooklyn membership proprietor, mentioned in an interview. “And it shouldn’t be that manner. We’re all a neighborhood.”

For companies like Crowbar, a music membership in Tampa, Fla., getting a grant is a matter of survival. Tom DeGeorge, Crowbar’s main proprietor, took out greater than $200,000 in private loans to maintain the enterprise afloat after it shut down final yr, together with one utilizing its liquor license as collateral.

Greater than a yr later, the membership has reopened with a smattering of occasions at diminished capacities, however the enterprise nonetheless operates within the purple, Mr. DeGeorge mentioned.

“We misplaced a complete yr of live shows within the blink of a watch, which was near $1 million in income,” Mr. DeGeorge mentioned. “That’s why we want this grant so badly.”

The help was licensed by Congress late final yr after months of lobbying by an advert hoc coalition of music venues and different teams that warned of the lack of a complete sector of the humanities economic system.

For music venues specifically, the final yr has been a scramble to stay afloat, with the proprietors of native golf equipment operating crowdfunding campaigns, promoting T-shirts and racking their brains for any artistic technique to elevate funds. For the vacations, the Subterranean membership in Chicago, for instance, agreed to position the names of patrons on its marquee for donations of $250 or extra.

“It’s been the busiest yr,” Robert Gomez, the first proprietor of Subterranean, mentioned in an interview. “But it surely’s all been about, ‘The place am I going to get funding from?’”

Even earlier than Thursday’s fiasco, the opening of the shuttered venue program was riddled with complexity and confusion.

The Small Enterprise Administration posted a 58-page information for candidates late Wednesday evening, then shortly took it offline. A revised model of the information was posted simply minutes earlier than the portal opened on Thursday. (An company spokeswoman mentioned the information needed to be up to date to replicate “some last-minute system modifications.”)

And fewer than two hours earlier than the company was supposed to begin accepting purposes, its inspector basic despatched out an alert warning of “severe considerations” with this system’s waste and fraud controls. The Small Enterprise Administration’s present audit plan “exposes billions of {dollars} to potential misuse of funds,” the inspector basic wrote in a report.

Profitable candidates will obtain a grant equal to 45 p.c of their gross earned income from 2019, as much as $10 million. Those that misplaced 90 p.c of their income (in comparison with the prior yr) after the coronavirus pandemic took maintain may have a 14-day precedence window for receiving the cash, adopted by one other 14-day interval for many who misplaced 70 p.c or extra. If any funds stay after that, they are going to then go to candidates who had a 25 p.c gross sales loss in not less than one quarter of 2020. Venues owned by massive firms, like Reside Nation or AEG, usually are not eligible.

The applying course of is intensive, with detailed questions on venues’ budgets, employees and gear.

“They wish to be sure to’re not simply establishing a piano within the nook of an Italian restaurant and calling your self a music venue,” mentioned Blayne Tucker, a lawyer for a number of music areas in Texas.

Even with the grants, music venues could also be going through many dry months earlier than touring and reside occasions return at something like prepandemic ranges.

The grant program additionally presents assist for Broadway theaters, performing arts facilities and even zoos, which share most of the similar financial struggles.

The Pablo Middle on the Confluence, in Eau Claire, Wis., for instance, was capable of elevate about $1 million from donations and grants throughout the pandemic, but continues to be $1.2 million brief on its annual fastened working bills, mentioned Jason Jon Anderson, its govt director.

“By the point we open once more, October 2021 on the earliest, we may have been shuttered longer than we had been open,” he added. (The middle opened in 2018, at a price of $60 million.)

The hundreds of small golf equipment that dot the nationwide live performance map lack entry to main donors and, in lots of circumstances, have been surviving on fumes for months.

Stephen Chilton, the proprietor of the 300-capacity Insurgent Lounge in Phoenix, mentioned he had taken out “a number of hundred thousand” in loans to maintain the membership afloat. In October, it reopened with a pop-up espresso store inside, and the membership hosts some occasions, like trivia contests and open mic exhibits.

“We’re shedding rather a lot lower than we had been shedding after we had been fully closed,” Mr. Chilton mentioned, “but it surely’s not making up for the misplaced income from doing occasions.”

The Insurgent Lounge hopes {that a} grant will assist it survive till it will probably deliver again a full complement of live shows. And if its utility will not be profitable?

“There is no such thing as a Plan B,” Mr. Chilton mentioned.

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