Over the past 15 months, Todd Carlson, owner of TAK Music Venue in Dilworth, Minnesota, has lost an estimated $400,000 in revenue as music tours, weddings, graduation parties, and comedy shows vanished into the haze of the COVID-19 pandemic.
Most of that time, TAK was closed, with the occasional opening at 25% capacity when allowed under Gov. Tim Walz’s executive orders — not enough to bring in the money to cover rent, utilities, and property taxes for the 529-person-capacity venue.
“I’ve had to basically go through my entire personal savings, including my kids’ college fund. So it’s just gotten really tough,” Carlson told the Minnesota Senate committee on Jobs and Economic Growth at a hearing on March 17.
Carlson’s best bet to cover his losses is to get some form of direct financial aid in the form of tax relief or a grant for independent live event venues, he says. That’s why he testified this past spring in support of the #SaveMNStages bill, which would have established that aid, as part of an advocacy effort by the Minnesota Independent Venue Alliance (MNIVA).
But the bill languished in committee during the regular session of the Legislature, as did a proposed $100 million grant program for venues that was once part of another draft Senate bill. Now, as lawmakers finish negotiating Minnesota’s budget via a series of omnibus spending bills by a July 1 deadline, it again looks unlikely that venues will be targeted for help from the Legislature.
To be sure, Minnesota has given direct aid to hospitality businesses, which some venues were eligible for. And a jobs omnibus bill includes $70 million for the Main Street COVID-19 relief grant program to assist any small businesses affected by the pandemic, though grant payouts will be limited to between $10,000 and $25,000.
But there has been no aid targeted directly for performance venues, even as states like Wisconsin, Colorado, Montana, and Michigan have doled out millions of dollars in targeted grants to help similar businesses that struggled during the pandemic.
“It’s throwing folks in our situation with other business sectors,” Shayna Melgaard, chair of MNIVA, said of the Main Street program. “Our needs are not the same.”
And despite the end of Minnesota’s indoor capacity restrictions at the end of May — and what increasingly feels like the end of the pandemic in the U.S. — venue advocates say that the struggle for survival isn’t over.
As a result, MNIVA is now refocusing its efforts instead on getting aid through Walz, who could approve a grant program for live event venues using federal stimulus funds, as other governors have done.
“Our challenge is the same one we’ve faced for over a year: We haven’t had any income and asking us to hire back staff, send deposits to artists, venues, vendors, and so forth is extremely difficult without upfront capital,” Melgaard said. “It’s a huge risk to start mounting shows without a guarantee that relief funds are coming.”
Desperate for help
Live event venues were in a precarious position during the pandemic, with many owners saying that even partial reopening wasn’t financially feasible. As a result, most venues lost nearly all of their revenue. The National Independent Venue Association (NIVA), an industry advocacy group, estimates that 90% of venues in the country will fold without financial aid to make up for their losses.
“Our income … dropped to almost nothing in terms of what we’re able to make [on] ticket sales and that sort of thing,” said Abby Lee, managing director of the Winona-based nonprofit Mid West Music Fest. Lee testified at the Minnesota Senate hearing earlier this year.
“If we do an event, we essentially lose money on it because we can’t [successfully] charge for an online event,” she said. And capacity restrictions also meant little revenue when in person.
Venue advocates also say a slew of pandemic aid programs, like the federal Paycheck Protection Plan loans and a state-level payout of $220 million to the hospitality industry approved by the Legislature in November, haven’t been effective for many live event venues. Either the aid money ran out too soon, or it was mostly inaccessible. In an industry reliant on contract and part-time work, few venues had enough full-time employees to get substantial help via PPP, which gave loans to businesses to keep staff on payroll.
A year of layoffs, furloughs, and cut hours also means that many arts and culture workers have left for other jobs. Though Lee is a full-time employee of MWMF, her hours were cut by three quarters when the pandemic hit. Only in early May did she get back to working half of her pre-pandemic hours. MWMF’s creative director, the only other full-time employee, faces a similar constraint.
As a result of the salary loss, “both full time staff are now looking at having to leave the organization because of the inability to support ourselves,” Lee said.
Now, Lee is looking to transition to teaching after earning her master’s degree in education online. “For a while, we thought, like, ‘Oh … we’ll just make do,’” Lee said. “I’ve heard from a lot of people in the arts: ‘I hammered through my savings account, thinking, it’ll get better, it’ll get better. And then it just kind of didn’t get better.’ And a lot of us spent money that we had as our backup plan. And so now we’re looking at, what’s the backup for the backup?”
Help was supposed to arrive with the Save Our Stages Act, passed by Congress in December, which set aside $16 billion in federal funding for a grant program for venues, theaters, and event promoters. But the rollout of the program stalled for months. Venues continued losing revenue amid the uncertainty, unable to apply for a grant until April 26 and only starting to receive promised funds in the last days of May. As of June 9, only 90 grants had been awarded, even as more than 14,000 applicants were waiting for assistance.
“With each passing day, more independent businesses are forced to shutter permanently or file for bankruptcy,” Sens. Amy Klobuchar and John Cornyn, lead sponsors of the Save Our Stages Act, wrote in a June 15 letter to the Small Business Association pushing to speed up grant payouts. “Landlords and banks are no longer permitting deferrals and are pressing for immediate payment of past due accounts … bureaucratic process cannot stand in the way of getting these desperately needed funds out the door.”
Desperate venues across the country turned to lobbying at the state level for much-needed relief, with local chapters of NIVA, like the Minnesota Independent Venue Alliance (MNIVA), leading the charge with efforts like the #SaveMNStages bill.
“I believe everyone … was hoping that the Save Our Stages Act would literally save our stages,” Melgaard, the chair of MNIVA, said. “But since the process of getting the funding into the hands of venue operators and concert promoters has taken so long and continues to be disrupted, we decided not to stand idly by.”
For MWMF, the advocacy and support provided by MNIVA has been an important lifeline. “It’s huge,” Lee said. “For relatively tiny nonprofits like us to be a part of something like that, that then has a bigger voice … it makes us feel more valid. And like somebody is appreciating us.”
But by the time any aid arrives, it could be too late for many arts and culture workers. “Had something happened sooner, our picture could look differently right now,” Lee said. “That’s the hard thing to let sit, is that maybe one of us could have stayed with the [MWMF] had funding come through earlier. But it didn’t, and it hasn’t. So you know, we’ll see.”
MNIVA is very much a product of the times. Before the pandemic, there was no state or national level advocacy organization for independent live event venues. “It was, sort of, every indie venue or promoter is out for themselves because that’s the nature of being an independent business,” Melgaard said. “Some of us had been, and will again be, competitors for the same shows.”
But when faced with lockdowns in spring 2020, venues across the country understood that the entire industry was at risk of collapsing. They would have to work together to make sure venues weren’t left behind by pandemic relief efforts, and that meant creating an organization to help with resources and lobbying.
“When the National Independent Venue Association was formed, it was clear … that our scene is better when we all have the opportunity to thrive,” said Ashley Ryan, marketing director for First Avenue and MNIVA’s secretary, in an email.
“It also became clear that while the national efforts to organize were essential, so were local efforts. Every state has different restrictions, and different ways businesses needed to navigate those restrictions,” Ryan said.
Melgaard wasn’t planning to lead the venue organizing in Minnesota. But when Dayna Frank, CEO of First Avenue and president of NIVA, asked if she would be the local point person for NIVA, Melgaard agreed to do it. “I took it on tentatively,” she said. The work started from scratch, as none of Minnesota’s venues had any experience with advocacy.
“We needed to figure out how to navigate government relations, learn how to lobby, and that’s not something I think any of us had planned on,” Melgaard said. “But we’re better for it. We’re more engaged in how policy impacts our industry, and frankly, more aware of how our businesses positively impact the economy.”
But MNIVA’s story so far is one of setbacks. Last summer, when MNIVA was still getting on its feet, venues and event promoters sent a letter to Walz asking for financial help. There was no response, Melgaard said. So MNIVA refocused its work.
“As a group, we were in a position of understanding that there were greater needs in our state than just us, so we continued working on our efforts to see Save Our Stages legislation passed on the federal level,” she said.
But the timeline for federal help kept getting drawn out. “I think there was an assumption by everyone, including members of MNIVA, that federal assistance would have come much sooner, like last August, [or] last December,” Melgaard said.
Since the fall, MNIVA has been in regular contact with Walz’s office, the Minnesota Department of Employment and Economic Development (DEED), state legislators, and county officials to push targeted financial assistance. Melgaard says everyone is responsive to MNIVA, and yet there are no clear answers on why venues haven’t been a priority for relief. Walz’s office and several state lawmakers involved in pushing state aid to venues did not respond to requests for comment.
In an emailed statement, DEED Commissioner Steve Grove said that “over the past year, we’ve talked to large and small venues consistently, across Minnesota, through regular roundtables and countless meetings – we know it has been a devastating time for them, and they need help. … Legislators are looking at additional ways to help Minnesota businesses.”
According to a study of the Chicago arts and culture scene, every dollar spent on a ticket at an independent venue creates $12 of economic activity. U.S. Department of Commerce figures for 2019 show the arts and culture industry accounted for over $12.5 billion in Minnesota’s economy, ranking as the third largest industry in the state.
For owners and operators, that economic impact makes the lack of help frustrating. “Minnesota needs us because we bring music, arts, and cultural events and that’s incredibly important to the quality of life here, but we also help drive traffic to local restaurants, bars, retail, hotels — they literally need us to make the economy work,” Melgaard said.
Early in spring 2021, Todd Carlson projected that in three or four months, he would run out of money and have to shut TAK Music Venue down for good. Then Walz eased indoor gathering limits, first allowing venues to open to 50% capacity, and lifting all capacity restrictions as of May 28.
Now Carlson feels more financially stable, and his calendar for late summer and early fall is filling up “pretty nicely.”
But he’s still not making enough money to begin to cover his pandemic losses, and many other venues are struggling to start back up with empty bank accounts. “I’m right on the border of North Dakota here … and North Dakota [was] much less restrictive with their COVID guidelines,” Carlson said. Musicians and performers skipped over Minnesota, favoring the states where they could perform to a larger audience — leaving Minnesota venues with even less ability to make money during the pandemic. Some of the states with less restrictions also gave relief funding to venues, adding insult to injury, Carlson said.
Carlson is now worried that federal grant funding may never arrive. If there’s a mistake on the application, or an overlooked eligibility problem, or the $16 billion allocated simply runs out, TAK Music Venue won’t get a dime from the SOS Act.
As for venue relief from the state, Carlson sounded more optimistic. “I guess I’m confident in MNIVA and we’re doing everything we can,” he said. But what exactly that relief looks like, or when it will come, is another — frustrating — uncertainty.
The uncertainty of getting any kind financial aid makes it hard for venues and MNIVA to think ahead to the potential need for future rounds of relief, and for the new advocacy organization to start addressing other needs in the industry after the pandemic. “Would I turn away more funding — no, of course not,” Carlson said. “But I just can’t sit and think about more … when we haven’t even gotten past the [financial aid] that we’re working on.”
Said Melgaard: “Once we are confident that we’re no longer fighting for our survival, we have a whole slate of topics to discuss in upcoming meetings, such as adding more diversity, equity, and inclusion to the way we do business, as well as making our spaces safer and more accessible.”
But venues are also looking beyond politicians and organizations for help. In the long term, successfully making it through the end of the pandemic, and beyond, depends on regular Minnesotans stepping up. “Once we’re back up and running again, and people are comfortable, be sure to come out and support your venues,” Carlson said. “Don’t ask to be on a guest list to get in for free. Don’t ask for free drinks at the bar. Come out and support us like you never have before. Because we need it.”