Nov 15, 2021 - Business
Austin restaurants seek COVID cash
Boarded up businesses on Sixth Street in Austin.
Boarded up businesses stand on Sixth Street in downtown Austin in May 2020. Photo: Alex Scott/Bloomberg via Getty Images

Austin restaurants and bars are hungry for some COVID-19 cash.

Driving the news: A national restaurant trade group is pressing federal lawmakers to open the subsidy spigot to support restaurants still reeling from the pandemic.

The context: In March, President Biden signed the American Rescue Plan, a COVID-19 relief package that established a $28.6 billion Restaurant Revitalization Fund.

  • Eligible businesses included restaurants, food stands, caterers, bars, bakeries, breweries and inns. Businesses could get up to $10 million, or no more than $5 million per physical location. Amounts were calculated based on the restaurant's gross receipts.
  • More than 362,000 establishments nationwide requested $75 billion in the first three weeks of the program's existence.
  • But roughly four months later, the $28.6 billion to help restaurants had been tapped out, and the U.S. Small Business Administration stopped processing applications.

What they're saying: "By the time I got all the paperwork together, the RRF had closed and ran out of money. I didn't think it would run out of money that quickly," Jam Sanitchat, owner of Thai Fresh, said. "I've known people who’ve closed; I know people who are struggling and need the funding now or they won’t be able to continue. We really need the help."

  • "Just because a restaurant looks busy doesn't mean that it really truly is. A lot of us are playing the game of smoke and mirrors," Michael Fojtasek, owner of Olamaie and Little Ola's, said. "We're trying to do the best that we can to take care of our communities and our employees."

The Independent Restaurant Coalition wants Texas' senators and the Biden administration to direct another $60 billion to the Restaurant Revitalization Fund.

Austin recipients in the first funding round, per federal records reviewed by Axios, included: Tacodeli, Pok-E-Jo's, Lamberts — each of which pulled in more than $3 million — and Container Bar, Spin Austin, Contigo and Quality Seafood — which won grants worth more than $2 million apiece.

Yes, but: The program has had a rough rollout.

Plus: Subsidy or no, the leisure and hospitality economies have rocketed back to life in Austin, per a raft of economic indicators.

State of play: Texas Republicans, reluctant to back what they see as an unnecessary bailout as businesses bounce back, have supported a GOP proposal to add $60 billion to the program by rescinding unspent money in other COVID relief programs — and eliminating parts of the program that give preference to minority owned businesses.

  • U.S. Sen. John Cornyn, R-Texas, "does support more relief, as long as it’s targeted towards the Texas restaurants who need it the most," Cornyn spokesperson Drew Brandewie told Axios. 
  • Another bipartisan measure, supported by the restaurants group, would also fund the program.

The big picture: It's been a roller-coaster couple of years for Texas restaurants, buffeted by pandemic lockdowns, a debilitating freeze, the Delta variant and a labor shortage.

avatar

Get more local stories in your inbox with Axios Austin.

🌱

Support local journalism by becoming a member.

Learn more

More Austin stories

No stories could be found

Austinpostcard

Get a free daily digest of the most important news in your backyard with Axios Austin.

🌱

Support local journalism by becoming a member.

Learn more