Cultural Venues’ Quest for Billions in Federal Aid 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 dwell occasion companies, hundreds of determined candidates waited eagerly to submit their paperwork proper at midday, when the system was scheduled to open.

And then they waited. And waited. Nearly 4 hours later, the system was nonetheless not working in any respect, sending candidates into spasms of tension.

“This is an absolute disaster,” Eric Sosa, the proprietor of C’mon Everybody, a membership in Brooklyn, tweeted on the company.

Shortly after 4 p.m., the Small Business 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 issues arose despite multiple successful tests of the application process,” Andrea Roebker, an company spokeswoman, mentioned in a written assertion.

After discussions with the distributors that constructed the system, the company determined “to shut down the portal to ensure fair and equal access once reopened, since this is first-come, first-serve,” Ms. Roebker mentioned. “This decision was not made lightly as we understand the need to get relief quickly to this hard-hit industry.”

In social media forums and Zoom calls, annoyed candidates vented and shared their anger.

“It’s hard to keep hearing ‘help is on the way’ and then not be able to apply,” mentioned Tom Weyman, the director of programing on the Columbus Theater in Providence, R.I. “I don’t think any of us thought the application process would be totally smooth, but this is life and death for our venues.”

The meltdown echoed issues the company had final 12 months in taking purposes for the Paycheck Protection Program, which it additionally oversees. When that program opened, the company’s overwhelmed methods seized up — and the identical factor occurred once more, weeks later, when a brand new spherical of funding grew to become out there.

Applicants 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 based mostly on the order in which individuals apply. Those who get their purposes in early have the very best likelihood of getting assist earlier than the cash runs out.

“It pits venues against each other because we’re all mad-dashing for this,” Mr. Sosa, the Brooklyn membership proprietor, mentioned in an interview. “And it shouldn’t be that way. We’re all a community.”

For companies like Crowbar, a music membership in Tampa, Fla., getting a grant is a matter of survival. Tom DeGeorge, Crowbar’s major proprietor, took out greater than $200,000 in private loans to maintain the enterprise afloat after it shut down final 12 months, together with one utilizing its liquor license as collateral.

More than a 12 months later, the membership has reopened with a smattering of occasions at decreased capacities, however the enterprise nonetheless operates in the purple, Mr. DeGeorge mentioned.

“We lost an entire year of concerts in the blink of an eye, which was close to $1 million in revenue,” Mr. DeGeorge mentioned. “That’s why we need this grant so badly.”

The assist was licensed by Congress late final 12 months after months of lobbying by an advert hoc coalition of music venues and different teams that warned of the lack of a whole sector of the humanities financial system.

For music venues in explicit, the final 12 months 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 approach to increase 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 year,” Robert Gomez, the first proprietor of Subterranean, mentioned in an interview. “But it’s all been about, ‘Where 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 Business Administration posted a 58-page information for candidates late Wednesday night time, 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 mirror “some last-minute system changes.”)

And lower than two hours earlier than the company was supposed to begin accepting purposes, its inspector common sent out an alert warning of “serious concerns” with this system’s waste and fraud controls. The Small Business Administration’s present audit plan “exposes billions of dollars to potential misuse of funds,” the inspector common wrote in a report.

Successful candidates will obtain a grant equal to 45 % of their gross earned income from 2019, as much as $10 million. Those who misplaced 90 % of their income (in comparison with the prior 12 months) after the coronavirus pandemic took maintain could have a 14-day precedence window for receiving the cash, adopted by one other 14-day interval for those that misplaced 70 % or extra. If any funds stay after that, they may then go to candidates who had a 25 % gross sales loss in no less than one quarter of 2020. Venues owned by giant companies, like Live Nation or AEG, will not be eligible.

The software course of is in depth, with detailed questions on venues’ budgets, employees and tools.

“They want to make sure you’re not just setting up a piano in the corner of an Italian restaurant and calling yourself 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 dwell occasions return at something like prepandemic ranges.

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

The Pablo Center on the Confluence, in Eau Claire, Wis., for instance, was in a position to increase about $1 million from donations and grants through the pandemic, but remains to be $1.2 million brief on its annual mounted working bills, mentioned Jason Jon Anderson, its government director.

“By the time we open again, October 2021 at the earliest, we will have been shuttered longer than we had been open,” he added. (The heart opened in 2018, at a value of $60 million.)

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

Stephen Chilton, the proprietor of the 300-capacity Rebel Lounge in Phoenix, mentioned he had taken out “a few 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 reveals.

“We’re losing a lot less than we were losing when we were completely closed,” Mr. Chilton mentioned, “but it’s not making up for the lost revenue from doing events.”

The Rebel Lounge hopes {that a} grant will assist it survive till it might probably deliver again a full complement of live shows. And if its software shouldn’t be profitable?

“There is no Plan B,” Mr. Chilton mentioned.

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