Austin restaurants seek COVID cash
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.
- More than 6,400 Texas restaurants received a Restaurant Revitalization Fund grant this year, but 12,055 others were left behind in the first round of funding.
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.
- After white restaurant owners sued the SBA for discrimination, the agency started rescinding grants directed to restaurants owned by women, veterans and people of color that had been prioritized during the first 21 days, Reuters and other news outlets reported.
- The Counter, a nonprofit news organization that covers the U.S. food system, reported that High Flying Foods, an airport concessions company, collected almost $30 million in grants, nearly triple the program limit, through five separate subsidiary companies.
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.
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