Gov. Tony Evers announced Thursday that $78 million in grants are being awarded through federal coronavirus funding to assist restaurants, hotels and music venues that have been hit hard during the COVID-19 pandemic.
Restaurants and small businesses are receiving the bulk of funding with $45 million in grants that will be awarded to businesses making between $1 million and $7 million each year. Those businesses didn’t qualify for financial assistance in previous rounds of coronavirus relief funding. Restaurants represent around 95 percent of roughly 2,000 business that are eligible to receive grants of up to $20,000.
“Restaurants and other venues have been among the businesses hit hardest by the COVID-19 pandemic,” Evers said in a statement. “They’ve made the tough decisions to keep employees and customers safe by restricting indoor seating, offering delivery and curbside pick-up, and providing outdoor tables. We greatly appreciate the changes they’ve made to prioritize the health and safety of our communities, but now with winter coming, we are glad to provide this support at a critical time.”
Restaurants were forced to close indoor dining and pivot services earlier this year during Evers’ stay-at-home order. As COVID-19 cases surged this fall, Evers issued an order to restrict capacity at bars and restaurants to 25 percent, which expired on Nov. 6. The order faced multiple legal challenges.
The state Department of Revenue is working with the Wisconsin Economic Development Corp. to directly contact businesses who will receive the grants. Restaurants will not have to apply for the funding, according to Kristine Hillmer, president and CEO of the Wisconsin Restaurant Association.
“Folks might think that these are huge restaurants, and they’re not,” said Hillmer. “And they might also think that, well, if they have that kind of revenue, that they’re swimming in the dollars. That’s just not the case. What folks need to understand is the economics of restaurants … have very skinny profit margins on average.”
Hillmer said an updated survey of restaurants found more than 40 percent are at risk of closing within the next six months without financial assistance. The association had released a survey in September that found one-third of Wisconsin restaurant owners would still be in business due to impacts from coronavirus.
Hillmer said the funding is a step in the right direction, but it’s too early to tell whether it will prevent some restaurants from closing.
Mark Gutteter owns the Deepwater Grille in Ashland and the Rhinelander Cafe and Pub, which combined employ around 115 people. He said his businesses were able to make it through the shutdown earlier this year with help from federal funding through the Paycheck Protection Program. This fall, Gutteter chose to close down his Ashland restaurant for two weeks during a spike in COVID-19 cases.
Customer traffic is down by half, as many people avoid indoor dining. Gutteter said they may not have been able to stay afloat through next summer without additional stimulus or working with banks on creative financing.
“If we were going to get up to $20,000 for each restaurant, that gives me another month that I don’t have to worry about going backwards,” said Gutteter.
While the funding is appreciated, he noted restaurants need more substantial help. He would like to see additional support from the federal level to support the industry.
Tory Miller feels frustrated with the lack of urgency among lawmakers in Washington D.C., who he feels are turning a blind eye to those who are struggling financially. Miller, who is an executive chef and co-owns L’Etoile, Graze and Estrellón restaurants in Madison, has been forced to lay off more than 200 employees.
He said the grants awarded by the Evers administration does provide some benefit.
“To be honest, the damages that have been done over the last six or eight months have been so devastating that, you know, it does kind of feel like a drop in the bucket when it comes to the amount of things that we have to actually pay for,” said Miller. “But what it does do is it gives us a lifeline for yet another month.”
Still, Miller called the grants “a baller move” on behalf of Evers, highlighting that the state Legislature has done nothing since April.
State Assembly Republicans unveiled a COVID-19 plan Tuesday that would allow $100 million to go toward addressing the pandemic. The Republican spending plan comes about two weeks after the governor introduced a proposal to spend five times as much on COVID-19 testing and other services. But, state Senate Republicans say they’re not taking any action on COVID-19 relief before January.
Evers also announced $18 million in COVID-19 grants that were awarded to the lodging industry to aid hotels, motels and other operations that have been impacted by the pandemic. Evers announced Thursday that 663 lodging businesses were awarded an average of $350 per room.
A recent survey from the Wisconsin Hotel and Lodging Association found close to half of all properties may close within six months without financial assistance. The funding is being distributed through the Wisconsin Department of Administration.
“The economic recovery for many Wisconsin communities depends largely on the tourism and lodging industries,” said DOA Secretary Joel Brennan in a statement. “By injecting these funds into local lodging and tourism partners, we hope to provide a lifeline and some stabilization to local economies, businesses and jobs.”
Visitors spent $3.7 billion on lodging last year.
Kim Zambon owns Holiday Acres Resort in Rhinelander on Lake Thompson. The lodge and cottages have been in Zambon’s family for three generations since 1949. The resort received a $21,000 grant as part of the federal coronavirus assistance awarded by the state.
“It’s a huge, huge effect for us, similarly to the PPP grants that were made available last spring,” said Zambon. “And, it gives us the assurance that we’ve got the support of our community, our government, and it feels like people want us to get through this.”
Zambon said business was down more significantly in the spring and fall than this past summer, especially group sales. But, he feels grateful that families have continued to make bookings. He thinks water parks and larger venues in Wisconsin Dells, Madison and Milwaukee have taken more of a hit as travel has declined during the pandemic.
The department also awarded around $15 million in grants to 96 live music and entertainment venues. Many have struggled financially as events were canceled to comply with coronavirus restrictions on large gatherings.
Those eligible for the grants received up to $500,000, or 25 percent of 2019 ticket sales. The Pabst Theater Foundation in Milwaukee received around $362,000 through the grant awards.
Speaking in a webinar hosted by the Milwaukee Press Club, Pabst Theater Group CEO said they’ve lost 90 percent of their revenues during the pandemic. The group typically hosts more than 700 events each year, contributing $250 million to the Milwaukee economy.
“(The grant) helps us to get a small piece of it back by being able to go back in and pay rents that we have been consistently paying and pay overhead for buildings and utilities and things like that, that even though we’ve not been in business, we’ve never missed a rent payment with any of our spaces,” said Witt.
Funding from the Coronavirus Aid, Relief and Economic Security Act — or CARES Act — is set to expire at the end of this year. Congress has not yet awarded additional rounds of federal coronavirus relief.