House passes COVID aid bill to help struggling restaurants

The House on Thursday approved more than $40 billion in COVID-19 assistance for restaurant owners who tried but failed last year to receive help from the federal Restaurant Revitalization Fund, which quickly ran out of money.

The bill passed by a vote of 223 to 203, with six House Republicans supporting the measure and four Democrats opposing it. Prospects for the legislation in the Senate are unclear.

The bill would replenish the restaurant fund with $42 billion and provide another $13 billion to other businesses still struggling to recover from the COVID-19 crisis.

The fund was created under the American Rescue Plan Act of 2021 and originally offered $28.6 billion in tax-free grants to restaurants that lost revenue due to COVID-19 shutdowns.

But the fund ran dry just three weeks after launching, offering assistance to 101,000 businesses, and leaving another 177,000 qualified applicants in the lurch. Among them were about 20,000 in California.

Without the assistance, bar owner John Arakaki said he is still unable to pay the back rent and utility bills for his two bars, Saint Felix in Hollywood and Saint Felix in West Hollywood.

He said he applied for the Restaurant Revitalization Fund within three days of its launch and spent three weeks calling to check on the status of his application.

“We didn’t really find out until we read the news that the funds were exhausted,” Arakaki said. “The impact has been brutal.”

“We’ve had to work every day to get through this: to find grants, to find ways to save money, to keep quality up, to switch products,” he said, adding that he and his business partner were working 60 hours a week for a while. “For us, it’s been crazy.”

If the fund is replenished, Arakaki said his first check will go to his landlords, who have patiently waited for months, he said. Then he would pay down his gas bill, and, if possible, provide his employees with bonuses.

Without the money, he’ll continue carrying the debts. “We will find a way to persevere, but I know several of my colleagues will shutter, and we’re going to lose a lot of identity in the city,” he said.

According to the National Restaurant Assn., restaurant industry sales remain down $65 billion from 2019’s pre-pandemic levels, and 90,000 restaurants nationwide are temporarily or permanently closed.

In California, a third of restaurants are estimated to have closed permanently due to the pandemic.

Rep. Earl Blumenauer (D-Ore.), who sponsored the bill, said the $42 billion should be enough to provide grants to all the restaurants that applied last year for the original fund but received nothing. The grants would only be available to those restaurants that previously applied.

The average grant last year was about $283,000. Amounts were calculated based on a restaurant’s 2020 shortfall in gross receipts compared to 2019, with a maximum of $10 million per business and a maximum of $5 million per location.

Though pandemic restrictions have eased, Blumenauer said it was critical to help restaurants get back on their feet.

“People are still struggling to get their balance,” Blumenauer said Thursday after the vote. “COVID continues to be a wildcard in terms of challenges with health restrictions. And the supply chain has been disrupted.”

In the Senate, two similar bills have drawn some bipartisan support. A bill that would designate $48 billion to the Restaurant Revitalization Fund was sponsored by Sens. Benjamin L. Cardin (D-Md.) and Roger Wicker (R-Miss.). Six other Republicans signed on as co-sponsors.

Some critics have complained that the original grant program provided too much assistance to larger chains, rather than small restaurants.

And some lawmakers are opposed to new COVID-19 aid, noting that many pandemic-related restrictions have ended.

But Chris Hillyard, who co-owns Farley’s East coffee shop in Oakland and Farley’s Coffeehouse in San Francisco, said his businesses continue to lose money on a monthly basis. He said he applied on the first day the fund opened for a six-figure grant to help keep his establishments afloat. But he too learned the program ran out of money before acting on his application.

“It was devastating,” he said. “We had all the plans in place.”