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Watsonville Campus Run a Food Biz?: $28 Billion Set Aside for Grants, By Jondi Gumz
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COMMUNITY NEWS Run a Food Biz?
$28 Billion Set Aside for Grants
By Jondi Gumz
Ted Burke, who owns the Shadowbrook in Capitola, plans to look into the new federal pandemic aid for restaurateurs. So will Joe and Gayle Ortiz, owners of Gayle’s Bakery & Rosticceria in Capitola. Matt Schoenfield, co-owner of Vino Cruz in Soquel, hadn’t heard about the new funding, but he’s interested.
They are among the local food businesses that could get help from the new $28.6 billion Restaurant Revitalization Fund in the $1.9 trillion COVID relief package signed by President Biden.
U.S. Rep. Anna Eshoo (D-Palo Also) hosted a virtual town hall April 15 to alert food business owners to this new grant opportunity to survive the COVID-19 pandemic, which shuttered some restaurants and drastically cut revenues for others with capacity limits. Her point was to encourage business owners to prepare the financial records needed to apply online through the U.S. Small Business Administration, which this week posted information about the application process.
“It’s been heartbreaking to see the closures in the downtown,” Eshoo said. “Restaurants are really the cultural touchstones in our community. You’re so important to all of us.”
A restaurant owner in Aptos wanted to know if the newly approved federal restaurant relief grants were taxable.
A couple who run a bed-and-breakfast in Ben Lomond without any employees wanted to know if they were eligible for this new grant.
A couple who bought a restaurant in Santa Cruz late in 2020 wanted to know if they could apply for this federal money even though they didn’t operate for a full year.
The answers to the questions above: No, not taxable by the federal government but each state will decide about state taxes. Yes, you’re eligible because the number of employees is not a factor. Probably, apply and see.
On the tax question, Eshoo said, “This is to help people, not to place another burden on them with a surprise bill of taxes owed on monies that were either borrowed or granted.”
Besides restaurateurs, operators of food stands, food trucks, food carts, caterers, saloons, inns, taverns, bars, lounges, brewpubs, tasting rooms, taprooms, and alcohol producers where the public can taste or buy are eligible. Operations with more than 20 locations and wholesalers are not eligible; neither are nonprofits, publiclytraded companies or businesses that have permanently closed, such as Saturn Café, which announced it will not reopen at its downtown Santa Cruz location.
The application is not available yet but the grant program to be very popular, potentially creating a mad rush online, which is what shut down the Shuttered Venue Operators grant program.
Information on documentation requirements, when and how to apply has been posted by the U.S. Small Business Administration. For the smaller businesses, money has been earmarked, potentially reducing the competition: $5 billion for applicants with 2019 gross receipts under $500,000; $4 billion for those with 2019 gross receipts from $500,001 to $1,500,000; and $500 million for those with 2019 gross receipts under $50,000.
Julie Clowes, director of the Small Business Administration in Northern California, who answered questions with Eshoo, said people would get a few days to review the requirements before the online application portal opens.
She advised watching the sba.gov website for announcements.
“Whenever these things come available you get nervous and start to feel it’s a race for time,” said Larry Chu of Chef Chu’s in Los Altos, who called in.
Eshoo, who described herself as the daughter of a small business owner, sympathized with food businesses holding on after a roller-coaster ride of pandemic rules, allowing only takeout, then allowing dining outdoors, then indoor capacity capped at 50 percent.
“I want you to be able to access this money to cover your losses due to COVID so that you can really get on your feet and back into full swing on your businesses,” she said.
Eshoo recommended business owners reach out to the Small Business Development Center (831-479-6136 at Cabrillo College in Aptos), SCORE mentors (831-621-3735) or the Women’s Business Center (newly created at El Pajaro in Watsonville, elpajarodcdc.org).
She also suggested they sign up at www.SBA.gov/ca/sf for email notices about the restaurant grants.
The grant for a single business is capped at $5 million; for those with multiple locations, it’s capped at $10 million.
The grant formula is 2020 gross revenue subtracted from 2019 gross revenue, based on tax returns. Another formula will be created for businesses not filing taxes for 2019.
Clowes said Paycheck Protection Program loans will be deducted from grants unless the loans were forgiven.
