Many restaurant owners in the Seattle area say they’re frustrated with the unequal distribution of funds from the U.S. Small Business Administration’s Restaurant Revitalization Fund. The $28.6 billion fund, which was part of the $1.9 trillion federal COVID-19 relief package passed in March, didn’t cover the roughly $75 billion in aid that 370,000 restaurants around the country applied for.
Only around 105,000 restaurants nationally received the grants, which were intended to make up the difference in restaurants’ revenues between 2019 and the pandemic-blighted year of 2020.
In the Seattle area, some businesses received millions from the fund, while others were denied completely. Notably, despite the SBA saying in the spring that it would prioritize funding for businesses owned by women, veterans, and economically or socially disadvantaged individuals — defined as “those who have been subjected to racial or ethnic prejudice or cultural bias because of their identity” — the three Seattle-based restaurant chains that were awarded the maximum amount possible ($10 million) are all owned by white men.
Sea-Town Restaurants Inc., owned by chef Tom Douglas, Elwood Investments LLC, which owns the Duke’s Seafood chain, and Schwartz Brothers, which owns four locations of Daniel’s Broiler, all received $10 million, according to a Freedom of Information Act data release this week that listed all the Restaurant Revitalization Fund recipients and the amounts awarded. Another Seattle chain, 13 Coins, was awarded more than $9.9 million.
James Lin, the owner of Watson’s Counter in Ballard, says he’s upset that white owners of large businesses reaped the biggest benefits from the Restaurant Revitalization Fund. Lin says he’s grateful for the roughly $104,000 his business received, but he says the money is just covering some of his losses from last year incurred by added expenses like personal protective equipment and raises he gave to some of his employees for working during a pandemic.
The SBA initially said it would prioritize funding for businesses owned by women, veterans, and socially or economically disadvantaged individuals by setting aside the first 21 days of applications for these groups after applications opened on May 3.
But then a lawsuit was filed by right wing advocacy group America First Legal on behalf of some white restaurant owners in Texas and Pennsylvania, alleging that this prioritization amounted to unconstitutional discrimination against white men. This led to an injunction by a Texas judge on May 28 that temporarily stopped people in priority groups from receiving their funds. Eater reported in June that when the injunction was lifted, the funds had run out and some priority applicants who’d previously been approved for a grant didn’t receive any money.
Nationally, less than a third of the applicants were awarded grants.
Ethan Stowell, who owns over a dozen restaurants in the Seattle area including How to Cook a Wolf, says he applied for the grant but didn’t receive any money. Stowell says he doesn’t know why he wasn’t approved. He says he’s talked to at least 14 Seattle restaurant owners who applied but didn’t receive any money, including the owners of Terra Plata, Jerk Shack and Big Time Brewery.
Stowell says he doesn’t hold anything against the businesses that were awarded large amounts of money, but he thinks it’s unfair to give some businesses millions, and others, zero.
“I think the only answer really is to fund all of the applicants, because that’s the only way that’s fair and equitable to everybody,” he says.
Uttam Mukherjee, owner of Spice Waala in Ballard and Capitol Hill, says he’s upset that chains like Sea-Town Restaurants were awarded such large amounts of money when they were some of the first businesses to initiate layoffs and close shop when the pandemic started.
“They didn’t even try to succeed during the pandemic,” Mukherjee says. “They didn’t contribute to anything, really.”
Mukherjee says these layoffs and early shutdowns for big restaurant groups showed big revenue losses, which the companies eventually benefited from in their applications for the Restaurant Revitalization Fund. Mukherjee says he didn’t qualify for the grant because he started his business in 2019 and had less revenue that year than in 2020. But if he had applied, he says, the fact that he kept his business running and maintained his staff through the pandemic wouldn’t have helped his application.
Shubert Ho, who owns Shooby Doo Catering, and several restaurants in Edmonds including Bar Dojo and Salt & Iron, agrees with Stowell that if the government pays for the difference in revenue between 2019 and 2020 for some eligible restaurants, it should pay for all of them. Shooby Doo Catering received around $379,000 from the fund, but Ho said some of his other food businesses didn’t get anything.
“I really feel strongly that Congress should expand the RRF and cover all of the applicants,” he said.