In March 2020, arts and culture venue owners turned off the lights, cut staff and grimly checked their balance sheets.
Overwhelmed by rent, utilities, maintenance and insurance expenses, they knew that if COVID-19 lasted longer than a few months, audiences were increasingly likely to come back to find nothing but dim signs and empty buildings.
But for those that managed to stay afloat, a saving grace came in December, when the Save Our Stages (SOS) Act was included in the COVID-19 relief bill passed by Congress. The bill set aside $15 billion for the Shuttered Venue Operators (SVO) grant program, which aimed to help performance spaces hit hard by the pandemic. It was the fruit of half a year of advocacy and lobbying efforts, offering a crucial lifeline for institutions and businesses that had lost almost all of their revenue in 2020.
“The vibe was elation,” Jack Kolb-Williams, executive director of Catalyst Music, a nonprofit that runs music venues in Burnsville and St. Paul, said of the act’s passing. “To see folks from both sides of the aisle come together to understand the importance of live music, live entertainment, and the cultural fabric that’s in jeopardy here.”
But more than three months later, the money has yet to materialize. The details of the SVO application process were announced in late March — and the Small Business Administration, which is overseeing the program, opened the application portal on April 8 only to shut it down that same day because of technical problems.
All of which has led many venue owners to go from hopeful to frustrated.
“I don’t understand why there’s so little communication on the subject,” said Chris Mozena, executive director of The Hook & Ladder, a theater in south Minneapolis. “We all know from flying … [if] we have flights delayed repeatedly, and there’s no communication on the subject, it gets very frustrating. As opposed to somebody just taking two seconds to say, ‘Oh, the engine fell off, we’ve got to put another one on, just be patient: It’s for your own safety.’”
An industry in crisis
According to the National Independent Venue Association, 90% of independent venues will close permanently during the pandemic if they don’t receive federal assistance.
“Many of our venues have been without any kind of income for all of 2020,” said Carl Atiya Swanson, associate director of Springboard for the Arts, the St. Paul nonprofit that supports artists and cultural institutions.
It’s been a “year of no regular shows, no regular programming, no regular access to our spaces. And that’s meant that venues … that operate on really tiny margins to begin with, and are always looking for ways to survive, they’re really left hanging,” he said.
While many small businesses could rely on the Paycheck Protection Program (PPP), an early-pandemic federal relief bill that provided forgivable loans as businesses kept workers on their payrolls, many venues weren’t eligible for the program or only qualified for smaller loans.
“We were, of course, out of business because COVID, and then the [George Floyd] unrest, so I didn’t have an active staff,” Mozena said. “I couldn’t meet the obligations of [PPP], and any significant numbers in terms of bringing people back or keeping them employed at that time. So … PPP didn’t yield much in terms of real relief.”
The prospect of help
Help finally came with $15 billion of the $900 billion COVID relief bill, passed in December, set aside specifically for performance venues.
Though the Save Our Stages Act was originally intended for independent music venues, the Shuttered Venue Operators Grant program includes theaters, movie theaters, museums and talent promoters. To be eligible for a grant, a venue has to have been operational on Feb. 29, 2020, and has to have lost 25% or more revenue during 2020 compared to 2019.
The grant rollout is split into three tiers. For the first two weeks, only venues that lost 90% or more of their revenue in 2020 will be able to apply for funding. The next two weeks will be for venues that lost 70% or more. And then venues that lost 25% or more of their revenue can apply.
Grants are capped at 45% of a venue’s 2019 revenue up until $10 million. While that may sound like a lot of money, the SVO grants only cover losses in 2020. As a result, they are still just a partial solution to venues’ financial troubles.
“There’s been a lot of talk of, the music industry is getting this SVO grant, so they should be fine,” said Ashley Ryan, the marketing director for First Avenue, which runs several venues in the Twin Cities.
“But a lot of venues are really looking to the fall of 2021 as being the time when national tours might start picking up again, or people get on the road and get in their van and go around and play shows,” she said.
“Really, we’re looking at almost … two years of being closed.”
Building a program ‘from the ground up’
Since December, the SBA has trickled out updates and FAQs to venues, encouraging them to get set up with the federal system that will allow them to receive a grant. But applications weren’t being accepted, leaving venues waiting on relief.
Part of the reason for the delay in rollout is that the SBA just isn’t used to grant programs, said Shayna Melgaard, chair of the Minnesota Independent Venue Alliance (MNIVA). “The SBA has never rolled out anything quite like this,” she said. “They usually do lending; they work with banks.”
The SVO program is going to funnel money directly from the SBA to venues in need without banks, which means more work is necessary to make sure the various criteria in the law are all accounted for. The criteria may sound obvious — for example, music venues need to have a PA system, a lighting rig and a defined performance space, among other things — but tracking them across thousands of applications can be a challenge.
“They’re trying to get it right … that the grants go to the types of business that it was intended for,” Melgaard said. “So because of that, it’s kind of a bulky process.”
Andrea Roebker, a communications director for the SBA, said that because of the unique needs of the SVO application system, it is being built “from the ground up” — a time-consuming endeavor.
“The agency also is bringing on new staff to manually review these applications,” Roebker said via email, “and the federal government has several required steps that need to be met for a grant posting, which … the SBA is working on quickly to get in place and processed through the appropriate channels.”
Technical issues, like those that brought down the application portal on April 8, add to the delay in rollout. Now, the SBA says it is coordinating with vendors to both fix existing problems, and make “changes to enhance the applicant’s user experience” for when the portal is relaunched on an as-yet-undetermined date.
Another aspect of the delay is circumstance: The SBA is still transitioning from the previous presidential administration. “The trouble with this whole situation is the SBA is actually a really small government agency,” said Joe Witt, president and CEO of the Minnesota Bankers Association. “They pretty much have their hands full with managing the PPP program … they’re doing their darndest.”
And since President Biden took over, “everybody at the higher levels, who would be making all the decisions necessary to implement a major program like this, most of those people are gone,” Witt said.
Focus turns to local funding
In the meantime, desperate venues are doing their best to limp along. “A lot of businesses are having to do things like take out extra loans,” Melgaard said. “I’ve heard people … have had to tap into their kids’ college funds just to pay their expenses and overhead — while they’re not even open.”
And this isn’t just about venues, Mozena, of The Hook & Ladder, said.
“I’m speaking on behalf of an organization, which is this kind of benign concept, whereas there’s real people that work at this organization,” Mozena said, “[who] have families and loved ones and are also dealing with all the same uncertainty that we are organizationally on a very personal and sometimes painful level.”
But there is some good news. The Save Our Stages Act said venues could only get an SVO grant or a PPP loan, but not both. With the SVO delays, and the PPP deadline on March 31, many venues struggled to decide which program to apply to.
Senate language in Biden’s $1.9 trillion COVID relief bill, signed into law on March 11, allows venues to apply for PPP, with the amount of the loan subtracted from any eventual SVO grant. “This [provides] an immediate lifeline” for many venues, Melgaard said.
But it’s only a partial victory. “Unfortunately, the PPP program does not work for all types of businesses in our industry, so there will still be folks who are left out in the cold until [SVO grant] applications open,” she said.
The bill also added another $1.2 billion to the SVO grant program along with $840 million to help the SBA run COVID relief programs.
And venue advocacy continues at the local level. MNIVA is working to push the state of Minnesota to include relief funding for venues this legislative session.
While Wisconsin recently allocated $15 million to help venues, Minnesota hasn’t provided any targeted funding for arts and culture institutions during the pandemic, Melgaard said. “We know that the state really values what we bring to the table and touts us as cultural institutions,” said Kolb-Williams, of Catalyst Music, who is also vice-chair of MNIVA.
“We really want to be here when this is all over … so that we can help the state get back on its feet and continue to do what people love to do: congregate together and unite around music and the arts,” he said. “That’s why we need that assistance.”