Jelly Belly and Yeezy got PPP loans. Which other California companies benefited?
Jelly Belly, Kanye West’s Yeezy apparel company and the SETI Institute, which searches for extraterrestrial life, are all California companies that received millions in loans from the federal coronavirus relief program for small businesses, according to data released by the Trump administration Monday.
The federal government doled out more than $68 billion to a vast and eclectic range of 580,000 California businesses in the last three months as part of the Paycheck Protection Program, which offers businesses with 500 or fewer employees loans that can be forgiven if the employer meets certain criteria, including using the money to keep pre-pandemic employees on the payroll for at least eight weeks after receiving the loan.
The majority — more than $50 billion — went to a subset of 87,000 California businesses that received loans of $150,000 or more. The largest loans, in the $5-million-to-$10-million range, went to just 647 businesses in the state. Manufacturing and construction companies received the highest percentage of those loans in California, but few parts of the economy went untouched, with money flowing to law firms, tech companies, film studios, healthcare companies, farms, hotels, restaurants and even a three-on-three basketball league founded by rapper and actor Ice Cube.
The Trump administration’s release of more detailed data on PPP borrowers — including the identities of those that got $150,000 or more — came after mounting pressure from Democrats and various private groups that demanded more transparency surrounding the roughly $660-billion loan program.
Mnuchin is refusing to disclose what businesses received coronavirus aid, insisting on secrecy for a $600-billion-plus loan program funded by taxpayers.
But within hours of the data’s release, California companies were disputing the accuracy. The Santa Monica scooter company Bird Rides Inc. is listed in the government data dump as having received a loan of $5 million to $10 million in late April. But in a statement, the company said it never applied for or received a PPP loan, and Chief Executive Travis VanderZanden tweeted that the company is speaking with its bank and investigating how it ended up on the list.
Taking the federal data at face value, recipients of the loans said the money would go to supporting more than 6.5 million jobs — or roughly 37% of the total jobs that existed in the state in February, before the economic effects of the COVID-19 pandemic began. But it is too early to say what percentage of those jobs were actually saved by the federal program, which will allow companies that forgo forgiveness to pay back the loans at a 1% interest rate over the coming 24 months.
Notable companies that received loans over $5 million, according to the data, include online custom gift marketplace Zazzle, Aladdin Bail Bonds and Cacique, the Monrovia-based cheese and meat company.
A number of nonprofit organizations received loans exceeding $5 million as well: several Planned Parenthood health centers, the Huntington Library and Museum in San Marino and numerous religious organizations, such as the Catholic Diocese of San Bernardino. In the $350,000-to-$2-million loan range, the Ayn Rand Institute in Santa Ana received a loan, as did the Foundation for National Progress, which publishes the left-leaning magazine Mother Jones.
The construction sector, including multifamily housing developers, electrical contractors, drywall firms and concrete and pipe companies, among others, was the largest recipient of loans statewide, including 86 in the $5-million-to-$10-million range.
The Los Angeles entertainment industry, which has seen concerts, sporting events and TV and film production delayed because of coronavirus precautions, reached for PPP loans to stave off layoffs.
Jim Henson Co. received about $2 million in loans to keep 75 jobs, for instance, and the Gersh Agency received a top-tier loan in the $5-million-to-$10-million range to help retain 250 jobs. Culver City-based Jukin Media, which makes money on the rights to viral videos, said it applied for a $2.2-million PPP loan to cover payroll costs for its 127 full-time staff and avoid layoffs.
Ice Cube’s Big 3 professional basketball league initially received a PPP loan of $1.6 million, according to a Big 3 spokesperson. The Los Angeles-based league returned $700,000 of the PPP loan after it decided in May to cancel the 2020 season, and used the remaining $900,000 for operational expenses and payroll for more than 100 coaches, players and staff members, a Big 3 spokesperson said.
Food and hospitality companies, which saw business come abruptly to a halt as stay-at-home orders went into effect in late March and global tourism slowed, also made up a large share of California’s loan recipients.
Jelly bean maker Jelly Belly Candy Co. received a PPP loan ranging from $5 million to $10 million. The Fairfield, Calif., company said in its statement that it applied for the loan “in good faith” and met all U.S. Treasury requirements. Jelly Belly said that the money was used to retain employees and that without the loan, the company would have had to “reduce headcount” at the start of the pandemic. The money helped retain 500 jobs, according to the SBA data.
A variety of Los Angeles-area restaurants received loans, including mid-market chains such as Norms, an iconic L.A.-area diner founded in 1949 that received $5 million to $10 million. But scores of smaller restaurants such as Le Petit Greek in the Larchmont neighborhood, which is listed as receiving $150,000 to $350,000, also received federal relief.
And wineries such as Plumpjack Management Group, one of the holdings in Gov. Gavin Newsom’s hospitality company, also received federal aid. It received between $150,000 and $350,000 in funds, federal records show. Larger operations such as Francis Ford Coppola’s Geyserville spread received loans in the range of $5 million to $10 million.
Newsom was asked about the funding on Monday during a daily briefing on the COVID-19 pandemic and he offered a curt response. “You would have to ask the people that are running those businesses in a blind trust. Period. Full stop,” Newsom said.
In a statement, the Plumpjack group said the loan enabled it to rehire a number of employees who would otherwise be on unemployment, adding that “like many in the hospitality business, our businesses have been struggling to survive during the Covid-19 crisis.”
A Beverly Hills hotel company owned by the sultan of Brunei also received a large loan from the program. Kava Holdings, which does business as the Hotel Bel-Air in Beverly Hills and is owned by the sultan of Brunei through the Brunei Investment Agency, an arm of the Brunei government, received a loan of $2 million to $5 million.
Forbes has ranked Hassanal Bolkiah, the sultan of Brunei, as having a net worth of about $20 billion.
“I’m shocked and outraged that one of the richest men in the world got millions from our government to keep his hotel open,” said Kurt Petersen, an organizer with Unite Here Local 11, which represents 32,000 workers in hotels, restaurants, airports, sports arenas and convention centers in Southern California and Arizona. “There should have been some due diligence on who is going to receive that money.” The hotel’s parent company declined to comment.
The PPP program has faced criticism over its execution and accountability since it began. The initial PPP funds of $350 billion were drained in about two weeks, and it came to light that some large and publicly traded firms took advantage of the program, effectively shutting out more needy small employers until the program was replenished by Congress.
The Treasury and Small Business Administration didn’t provide a list of all the borrowers that had returned or canceled PPP loans, but a senior administration official said more than $30 billion of the funds have been returned or canceled, among them loans to the Los Angeles Lakers and national food service chains Potbelly and Shake Shack.
In the wake of the criticisms, administration officials tightened regulations to channel more funds to smaller businesses, and the average size of a loan has dropped to about $107,000 from almost double that in mid-April. About $132 billion of funds remain available, and President Trump on Saturday signed legislation extending the application deadline from June 30 to Aug. 8.
Nationally, healthcare businesses and companies that fall under the broad heading of professional and technical services, which range from law offices to landscape architects, received the most funding at nearly 13% of the total PPP dollars each.
Construction and manufacturing were next, followed by food services and hospitality, then retail, each with around 8% of the PPP dollars. Food services and retail, however, accounted for more than 10 million jobs lost in March and April — more than a third of the total losses — much more than all the other major sectors except for health and social services.
The data released Monday show that California businesses received the largest share of funds in the nation — 13%, roughly proportional to the state’s 12% share of the national population.
But there are disparities in how the loans have been distributed. The District of Columbia, North Dakota and Massachusetts received the largest portion of the program’s loans per capita, while West Virginia, New Mexico and Mississippi received the lowest per capita loan amount.
“While the loans are more bite-sized and digestible, it appears that they still didn’t reach the most vulnerable industries and states,” said Beth Ann Bovino, chief U.S. economist at S&P Global Ratings, who has been closely tracking the program. “So the question is: Of those 51.1 million jobs that are reportedly supported by PPP, how many were actually at risk of being lost in the first place?”
The new data do not shed direct light on how well the PPP funds were spread to minority-owned businesses, which have been hit particularly hard by the pandemic, according to research by economist Robert Fairlie of UC Santa Cruz. Borrower information on race and gender was voluntary, and most applicants left that part blank.
However, in its latest PPP summary report of approvals through June 30, the SBA said that 27% of PPP funds went to low- and moderate-income census tracts, in line with the share of overall population in those areas.
“It’s good to see the data finally being released on the PPP program, but frustrating that it took this long to come out,” said Sarah Crozier, a spokeswoman for Main Street Alliance, a small-business advocacy group that had been pushing for more transparency.
Times staff writers Samantha Masunaga, Hugo Martín, Laurence Darmiento, Wendy Lee and Phil Willon contributed to this report.
Your guide to our new economic reality.
Get our free business newsletter for insights and tips for getting by.
You may occasionally receive promotional content from the Los Angeles Times.