Live Venues Shuttered by Pandemic Could Start Getting Grants $16 Billion in the balance

On a Friday night in Kansas City’s West Bottoms, comfortably distanced members of the crowd at Lemonad(e) Park tapped their toes and took in an evening of in-person live music.

Then, the skies opened up.

The night’s headliner, a local group called True Lions, didn’t even hit the stage. But if you asked a member of the medium-sized crowd shuffling to the exit in the downpour, they likely would have been happy to have seen any live music at all.

Lemonad(e) Park, an outdoor, socially distanced converted parking lot venue, was conceived in July 2020 as a response to the COVID-19 pandemic. The venue, created by recordBar’s Steve Tulipana and folks at Voltaire restaurant, has mostly welcomed local performers during the pandemic. 

Socially distanced, outdoor seating puts a bit of money in the pockets of organizers and musicians, while the music appeases agonized fans of live music.

As the vaccinated population grows and Kansas City’s restrictions are lifted, area venues and promoters are gearing up to take live music operations from cautiously planning shows in order to keep audience members “sane” to something closer to the industry’s pre-pandemic status quo.

For an industry all but completely shut down since March 2020, getting back to normal is going to take a major jumpstart.

Live venue owners and operators around the country like Tulipana rest their hopes in landing a slice of the $16 billion dollars available through the Shuttered Venue Operators Grant (SVOG) program.

Established by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, and amended by the American Rescue Plan Act, the federal program could send eligible applicants grant money equal to 45% of their gross earned revenue. The maximum amount available for a single grant award is $10 million.

Eligible applicants include live venue operators or promoters, theatrical producers, live performing arts organizations, museum and movie theater operators, and talent representatives.

Entities must have been in operation as of Feb. 29, 2020.

CARES Request Canned

In December 2020, members of the Missouri Entertainment Alliance penned a letter to Missouri Gov. Mike Parson seeking $11.25 million in funds to keep the industry afloat.

The request for a slice of the state’s fleeting Coronavirus Aid, Relief, and Economic Security Act (CARES) money represented just 1% of the remaining state funds at the time and just 0.5% of Missouri’s total COVID-19 pandemic relief issued in the spring of 2020.

A study cited in the letter suggested that the industry offers more than cultural value. It found that for every $1 spent on a ticket at an independent venue, $12 in additional economic activity is generated.

Despite an extended deadline to distribute the relief cash by Dec. 31, 2020, the request from the alliance of more than 50 local, independent live event venues came up empty.

“We just weren’t getting any traction with the governor and the state,” said Kelli O’Neill Wenzel, MEA member and president and CEO of O’Neill Events & Marketing.

“They understood the need, but they were looking broader at arts groups and … everyone wanted that money,” Wenzel said.

A consolation of sorts came in the form of the Economic Aid Act signed into law in late December, which appropriated $15 billion dollars to the SVOG program. On March 11, $1.25 billion was added to the SVOG when the American Rescue Plan Act became law.

Patience Running Thin

The U.S. Small Business Association (SBA) application for SVOG funds opened April 8 — a month after the American Rescue Plan Act was signed, but was promptly shut down due to technical difficulties that afternoon.

A news release issued the evening prior to the application opening informed those seeking assistance that grants wouldn’t be distributed until the end of April.

The application portal remained down, however, until April 19. Just over a month after the SBA reopened the application, an updated SVOG Frequently Asked Questions page said to expect award decisions to be made in “late May.”

Going on five months since the SVOG grant funding was announced and with a return to live events at pre-pandemic capacities inching closer by the day, MEA members like Jeff Fortier, co-president of Mammoth Live and show producer at the Uptown Theater, are becoming increasingly frustrated with how long the process has taken.

“I don’t know how you can close an entire industry down for 15 months and expect anyone to survive,” said Fortier, who estimated in December that a substantial number of MEA businesses have lost close to 80-90% of their annual revenue during the pandemic.

Fortier believes the SBA may not have been ready for the influx of applications. He also shares a concern with Wenzel that as business has started to ramp up, planning remains incredibly challenging without the grant money. They noted the number of outside contractors and other moving parts needed to stage live events, on top of the challenge that arises in booking tours with varying degrees of COVID-19 restrictions in different parts of the country.

“We’ve all been planning while holding our breath,” said Wenzel, whose group puts on events like Boulevardia and Irish Fest. “What you’re starting to see scheduled for the fall is because we’ve had the time to plan. Just because restrictions are starting to ease now, doesn’t mean we can all jump in and have stuff in two weeks.”

‘It’s going to be huge’

T.J. Berry, deputy director of the Kansas City District SBA, confirmed that first-priority SVOG applicants will begin to receive notice whether or not they will receive some of the $16 billion starting Friday, May 28, and into the week following Memorial Day Weekend.

The first 14 days of grant awards will go to entities that suffered a 90% or greater gross revenue loss between April 2020 and December 2020 due to the pandemic. The following two week period will grant second-priority entities (70% losses or greater) awards. Then, 28 days after the first and second-priority awards were made, third-priority awards will go out to those who suffered 25% earned revenue loss between one quarter of 2019 and a corresponding quarter of 2020.

“The last time I checked there were 38,000 applications and that was several weeks ago,” said Berry, who noted that an $11 billion dollars worth of applications have been filed nationwide.

Berry’s Kansas City SBA district has no say in the grant-awarding process, but the group will be notified when grants are awarded in the district, which spans 89 counties, 60 in Missouri and 29 in Kansas.

In February, Wenzel polled MEA members on whether or not their operations would be saved by potential SVOG funding. About half of the group responded that the money would help, but wouldn’t necessarily be the magic bullet.

“I think for the venues it’s going to be huge. Otherwise, there’s a lot of debt, not a lot of risk they can take,” Wenzel said. “Plus, if they all got the SVOG and managed it, they’d have to be able to hire people again.”

Tulipana agreed: “I think it’s really important that the SVOG grant is funded. If it doesn’t, we’re walking on thin ice for a while.”

His group is in the thick of restaffing recordBar ahead of its first indoor show planned with an audience since the beginning of the pandemic — a Bluegrass in The Bottoms VIP after-party set for late June.

“We’ll have money to pay rent to our landlord who helped us with rent all these months, but we are going to be feeling it for a while, probably a few years,” Tulipana said, should he see SVOG cash.

“Everyone is saying it’s going to be like the 1920s and everyone is going to be going out. We’ll see about that, you can’t bank on it.”

Allowable Use of SVOG Funds 

According to the U.S. Small business Administration, Shuttered Venue Operators Grant funds may be used for specific expenses, including:

• Payroll costs
• Rent payments
• Utility payments
• Scheduled mortgage payments (not including prepayment of principal)
• Scheduled debt payments (not including prepayment of principal on any indebtedness incurred in the ordinary course of business prior to February 15, 2020)
• Worker protection expenditures
• Payments to independent contractors (not to exceed $100,000 in annual compensation for an individual employee of an independent contractor)
• Other ordinary and necessary business expenses, including maintenance costs
• Administrative costs (including fees and licensing)
• State and local taxes and fees
• Operating leases in effect as of February 15, 2020
• Insurance payments
• Advertising, production transportation, and capital expenditures related to producing a theatrical or live performing arts production. (May not be primary use of funds)

Grantees may not use award funds to:

• Buy real estate
• Make payments on loans originated after February 15, 2020
• Make investments or loans
• Make contributions or other payments to, or on behalf of, political parties, political committees, or candidates for election
• Pay for any other use prohibited by the Administrator