A critical $16.25 billion grant program to sustain thousands of small creative venues that haven’t been able to open since the pandemic began has yet to deliver a cent of relief four months after passage, due to delays and faulty technology at the Small Business Administration (SBA). A website constructed to take grant applications closed last week after only four hours online, because of constant crashes and an inability to intake documents. It has not been restored and there’s no timetable for its return….
The disastrous situation is an example of how passing a bill is only the beginning of the policy process. Too many pundits have skipped right ahead to measuring President Biden for Mount Rushmore based on one piece of emergency legislation. But he will likely rise or fall on implementation; if beloved music venues and theaters close across the country because the SBA can’t manage a functioning website, all the legislation in the world won’t matter.
By Chris Castle
The eight most terrifying words are “We’re from Washington and we’re here to help.” Notwithstanding the appropriation of billions in revenue, the SBA’s application portal for the Shuttered Venue Operators Grant is still not up and running. This means that at least hundreds of venues that are on the verge of collapse or have collapsed can’t get the money that Congress appropriated, or even apply to get those funds.
Remember, this grant program is not on the magnitude of the Affordable Care Act launch catastrophe or the nonexistent musical works database. The SVOG is a relatively manageable number of potential applicants by comparison. And yet they still can’t get out of their own way. Rest assured, everyone at the SBA will get their paycheck this week, their overhead will be paid for, no problem. And somewhere, someplace in the federal government’s apparatus sits billions of dollars to save our culture. And sits. And sits.
The site was supposed to launch a week ago on April 8 which was itself after months of delay. It’s no wonder the the SBA Inspector General issued a scathing report calling out the organization for mismanagement of the SVOG program–before it even launched.
So you can know two things–there’s no way to know when the money will be paid but there is a way to know that no one–and I mean not a soul–will be held accountable. They can have all the reports they want, but nothing ever happens with these things. They’re from Washington and you can embrace the suck.
By Chris Castle
As we’ve noted before, the Small Business Administration is seriously behind on opening the application process for the Shuttered Venue Operators Grant program. Turns out we’re not the only ones who are concerned–the SBA Inspector General has issued a damning report on the SBA’s failure to properly staff and administer the billions in funds appropriated by Congress to get venues up and running in the music economy.
The federal assistance directive also specifies that the Director of the Office of Grants Management appoints all grants management officers and makes decisions on the respective warrant level based on the training, qualifications, and experience of the grants officer. However, on March 10, 2021, the acting Chief Operating Officer waived the standard experience, training, and certification requirements and the agency grants training plan for administering all existing and future emergency grant programs related to the impact of COVID-19. SBA established these requirements and the training plan to address the systemic weaknesses OIG found in prior audits of SBA’s grants management.
Currently, the [SVOG] program office has one designated official and its staff are on temporary detail. At this time, SBA has not formalized a plan for staffing this office relative to the volume of applications expected. The agency has also not defined the organizational structure for administering the program.
SBA expects the majority of the awards made under this program to be $1 million or less. Based on the current risk model, these awards would be disbursed as lump-sum advance payments with minimal reporting requirements and agency oversight. It is important that the application reviewing officials use careful scrutiny to review the applicants’ proposed budgets to ensure funds will be used for allowable, allocable, and reasonable expenses. OIG believes that SBA does not have the staff necessary to provide effective oversight over the SVOG program. Insufficient oversight of the SVOG program increases the risk that funds will be misspent, inadequately monitored, or improperly paid.
The Inspector General tends to worry about waste, fraud and abuse, but does it really need to be said that they assume the money is actually paid?
It is incredible that Congress has appropriated the funds but the bureaucracy cannot manage to get the funds through the last mile to the venues that desperately need the money–it’s really beyond desperation. I realize that the stimulus bill was passed immediately before a change in Executive Branch administrations, but that’s really no excuse.
Right now the money is just sitting at SBA and there better be a nice crisp answer for when applications are open and when money is to be disbursed. Applications were supposed to be open today, but the Inspector General’s report strongly suggests that there is not enough staffing available to actually process the applications. Remember–the money for this one comes directly from the SBA.
Austin Rep. Roger Williams, the bill’s House author, issued this statement:
“The SVOG Application opened this afternoon at 12pm ET. I’ve already heard from constituents experiencing issues with the SBA’s application portal, as of this afternoon the SBA temporarily suspended the portal due to technical difficulties. The SBA’s rollout of the SVOG has been torturous for venue operators who were promised relief more than 3 months ago,” said Congressman Williams. “My bipartisan Save our Stages Act authorized the SVOG and was signed into law by President Trump on December 27th. Under the Biden Administration the program has been plagued with delays and mismanagement at every juncture. President Biden failed to put in place capable SBA officials to deliver relief for small businesses and taxpayers in need. Just yesterday, the SBA’s Office of the Inspector General issued a report detailing the Biden SBA’s shortcomings with the SVOG, which hampered the application process and called into question whether the appropriate governance and oversight is in place.
It’s critically important that that the House Small Business Committee address the SBA’s shortcomings. Further delays for eligible business owners are unacceptable. I urge the SBA to make the SVOG a top priority moving forward and President Biden to put qualified individuals into key leadership positions so similar failures will not occur in the future.”
Guest post by Chris Castle
Thanks to the hard work of the National Independent Venue Association and their allies, it looks like some stimulus relief is finally coming to small venues, theater operators, bars and restaurants. The NIVA effort began with the Save Our Stages Act that authorizes the Small Business Administration (SBA) to make grants to eligible live venue operators, producers, promoters, or talent representatives to address the economic effects of the pandemic on certain live venues. Save Our Stages will be included in the new COVID stimulus bill. The stimulus bill text was released yesterday (Dec 21) and was voted on last night by both the House of Representatives and the Senate in Washington, DC.
SOS Act authorizes the Small Business Administration to make (1) an initial grant of up to $12 million dollars to an eligible operator, promoter, producer, or talent representative; and (2) a supplemental grant that is equal to 50% of the initial grant. An initial grant must be used for costs incurred between March 1, 2020, and December 31, 2020, but a supplemental grant may be used for expenses incurred through June 30, 2021. I haven’t seen the final language of the COVID stimulus bill, but I would imagine it will be carried over.
Many people pulling together have helped to deliver a miraculous Christmas present for music cities like Austin, Texas and the country. The bi-partisan Save Our Stages Act was carried by two members of the huge Texas Congressional delegation, Senator John Cornyn and Austin Representative Roger Williams alongside their outstanding colleagues Senator Amy Klobuchar and Representative Peter Welch. As we saw in the CLASSICS Act and later in the Music Modernization Act, Senator Cornyn is a strong advocate for the Texas music industry which needs him more than ever.
We also have to thank Governor Greg Abbott and the Governor’s Texas Music Office for their efforts in getting SOS passed and in supporting the local music economy–tireless is an overused word, but the Governor has never forgotten Texas venues in the State’s plans to open in the middle of the 25/8 whole of government response to the pandemic. I’m sure there are many others to thank in many other states and cities, but I know these folks have been white-knuckling the express train for months.
The lobbying effort to pass SOS was a heartening example of our business pulling together with the artist community in the vanguard. That extensive lobbying effort led by NIVA highlighted the importance of live music and music tourism to the local economies of cities across the country. I don’t know if it’s even possible to measure the global economic impact of the lockdown approach on our business, but given the pre-COVID economic impact of the festival business alone, it’s got to be over a $1 trillion loss. As Universal’s Michael Nash said at the University of Georgia Artist Rights Symposium earlier this year, the label was very concerned about keeping live music alive even though labels might not be directly involved. According to MusicAlly, Nash said “The reality is that the health and welfare of our artists is central to everything we do, and so we do have a stake in what’s happening in the broader ecosystem.” That view was reflected in the broad support for SOS from RIAA and other industry groups as well as Universal’s commitment to major investments in live music destination hotels.
It appears that the limitation on liability for businesses like venues that reopen is not going to make it into the stimulus bill. That’s unfortunate because the liability issue is a critical piece, and the situation cries out for a federal solution when there’s a lawyer behind every cough. You may ask why such a crucial aspect of reopening is still a question mark at this late hour? Rep. Stephanie Murphy (D-Fla.), a member of the bipartisan Problem Solvers Caucus, summed it up: “I am frustrated to be part of an institution that is so dysfunctional that it doesn’t even work until the last minute.” Well, frankly, no surprise there. The liability issue will have to be dealt with in the new Congress.
The question has always been if you lock down the venues without protecting that investment, will we have an live music infrastructure to reopen? Austin is an all-too-perfect example. We have no idea what Austin will look like when we get past the pandemic. SOS is too late to save Margin Walker and many others. But with this cash infusion we have a better chance that post-pandemic Austin will bear some resemblance to what it was and can hopefully help get some people back on their feet in Austin and around the country, which is the point. The team is moving in the right direction and will attract others. Universal’s investment in the future is an example of leadership and optimism for the survival of our live music venues and all the wonderful people who run them. Optimism is also contagious, and is more likely to accelerate with Save Our Stages.
The good news is the bad news is wrong–our work is not over, but we live to fight another day–or another 300 days. And that is a Christmas miracle in many households.
Here is the press release from NIVA:
Save Our Stages Act just passed as part of the COVID-19 Relief Bill!
Thank you for helping to #SaveOurStages! You responded in an overwhelming fashion. NIVA thanks those across the country who sent 2.1 million emails to their elected officials expressing their support for the Save Our Stages Act. All 535 Congresspeople heard from their constituents through SaveOurStages.com. Without your support and continued attention, we could not have accomplished this goal.
Our gratitude also extends to Sen. John Cornyn (R-TX) and Sen.Amy Klobuchar (D-MN) in the Senate, Rep. Peter Welch (D-VT) and Rep. Roger Williams (R-TX) in the House, champion leader Chuck Schumer (D-NY), and 230 bipartisan cosponsors in Congress.
The Save Our Stages Act will provide emergency relief to independent venues and promoters that have been devastated by the pandemic’s shutdown. This legislation will enable these mom-and-pop businesses to hold on until it’s safe to gather, reopen fully, and once again return to serving as the economic engines for their communities. Read NIVA’s full statement and thanks here.
The legislation provides critical help to shuttered businesses by providing a grant equal to 45% of gross revenue from 2019, with a cap of $10 million per entity. This grant funding will ensure recipients can stay afloat until reopening by helping with expenses like payroll and benefits, rent and mortgage, utilities, insurance, PPE, and other ordinary and necessary business expenses.
NIVA hopes to work with the Small Business Administration to ensure the emergency relief is dispersed as Congress intended, that the instructions and process to apply for grants ensure that the process is implemented accurately, fairly and as expediently as possible.
Since it could take many weeks, even months for the funding to flow, the NIVA Emergency Relief Fund, with The Giving Back Fund as its 501(c)3 fiscal sponsor, continues to raise money to assist the venues at greatest risk of permanently going under as we wait for the grants to be issued. Anyone wishing to donate can do so here.