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Federal program brings new hope to strapped venue owners

Gale Tallis

Gale Tallis, executive director of the Folly Theater in Kansas City, said her theater normally hosts as many as 200 events annually but they’ve been effectively shut down since last spring, save for a few small shows in their patron’s lounge. (Photo provided)

If you ask Gale Tallis, executive director of the Folly Theater in Kansas City, how her organization plans to use federal assistance under the Shuttered Venue Operators Grant (SVOG) program, you’ll get a simple enough answer.

“Survival,” she says.

That’s a sentiment common among those who run theaters, concert halls and other platforms for performance which have taken a body blow in a post-COVID universe dominated by lockdowns and capacity restrictions.

The government’s solution has been the SVOG, a $16 billion pool of life-saving cash designed to help the arts world cope with new fiscal realities as it struggles to reopen to a wary public. Passed in December and amended by Congress in March, the idea was finally unveiled for applications last month. The program, which covers everything from movie houses to museums, has generated strong interest across the country, including in Missouri.

Tallis said her historic theater, built in 1900, normally hosts as many as 200 events annually but they’ve been effectively shut down since last spring, save for a few small shows in their patron’s lounge. Typically attended by no more than 20 people, these have been more about supporting local artists than bringing in any revenue. Core staff have stayed on thanks to donations and PPP loans.

“But we’ve had to furlough all of our crew, house managers and box office personnel,” Tallis said. “We’re hoping to reopen in the fall with our jazz series.”

Like many venue operators, she’s hoping the SVOG will help with that. Eligible applicants can garner grants representing as much as 45 percent of their gross earned revenue, with the award capped at $10 million.

Tallis said people are grateful for the idea although, like some other applicants, she’s been frustrated by what she feels are shifting definitions as well as a series of early technical problems that caused the Small Business Administration’s portal to crash when it initially opened last month.

“Essentially, it has been a process through the last three weeks of information that was changing, definitions of revenue that were different in different places,” she said. “The SBA worked hard, I think, on trying to get it all right and make it so that everybody could apply finally.”

She’s optimistic about the path forward beyond the jazz series.

“We have a lot of shows stacked up after that moving into 2022,” she said. “It seems like people are feeling much more comfortable towards the fall and next year in doing things. I think there is a lot of pent-up demand and desire for seeing live shows in person because we’ve been on all these Zoom calls and had all these different virtual performances. I think people are really craving seeing a live performance again.”

Peter Palermo, executive director of The Sheldon Arts Foundation in St. Louis, hopes she’s right. He said the Sheldon has probably lost 90 percent of its earned revenue. Like Folly, it is a non-profit that can bring in money through donations.

Palermo is happy to see that federal help may be available, although he found the eligibility requirements somewhat murky and felt that a lack of clarity had complicated the application process.

“It will be a significant amount of money if it turns out that we are eligible,” he said, noting that it will allow the Sheldon to resume programming over the course of the year. “My director of finance is actually on the website right now doing battle trying to complete our application.”

Palermo said the Sheldon has managed to keep most of its employees on staff and expects capacity ceilings to keep rising.

“It is creeping back at this point,” he said. “We’re cleared from the city to have about 100 people in the hall right now so we’re able to do some concerts but as you can imagine, we’re a business that’s built on revenue that looks more like 6 or 700 people.”

He hopes to get to 50 percent capacity by autumn, yet he struck a note of uncertainty.

“A lot of this depends on people’s willingness to get vaccines and if we get that herd immunity in place,” he said. “I’m growing more pessimistic about those vaccine numbers.”

Angela Gieras

Angela Gieras

Angela Gieras, executive director of the Kansas City Repertory Theatre, said that her chief financial officer tried to do a lot of prep work in advance before the application which helped to smooth the process.

Still, they did get caught in the initial crash, she said.

“For about four hours, we were online trying to get into the system,” she noted. “We got all the way through the application but the ability to upload documents was not present when they brought the whole system down.”

When it came back up again towards the end of the month, she said the application process only took about 45 minutes.

Gieras said the pandemic has represented the most difficult period of her entire career.

“I know people who have been in the field 50 years and feel that same way,” she said.

Characterizing the SVOG as “lifesaving organizational support”, she noted that it was still only the beginning of a long climb for a lot of organizations like hers. She estimates full recovery might take three to five years.

“I think the government’s support right now is what is going to allow all of us to relaunch into the community and restart up,” she said.

Maureen Brinkley, SBA district director overseeing the 54 counties of eastern Missouri, acknowledged there had been some technical issues that delayed the process for a couple of weeks but felt the guidelines had been fairly consistent with applicants being asked to submit information comparing their financial situation in 2020 with similar figures from 2019.

She reported initial results showing that 9,000 venues had already applied nationwide once the system was up and running.

“I’ll be very honest with you,” she said. “We’re a little surprised. We thought that it would be 20,000.”

She said numbers broken down by state were not yet available.

It is unclear how long a given venue operator might have to wait for an answer, but the SBA will be prioritizing the hardest hit operations first. The first two weeks of grant awards will go to those who have seen 90 percent revenue loss between April and December while the following two weeks will cover those with 70 percent loss. Third priority awards are set to begin almost a month after the others.

Brinkley said that funding could be on the way for some in as little as three weeks.

Funds may be allocated for payroll, rent and utilities as well as a wide variety of other uses including everything from taxes and insurance to administrative and production costs. However, grantees may not use funds to purchase real estate, make payments on loans originated after Feb. 15, 2020, invest or loan out cash, or contribute to political candidates.

“Mainly, it is to open back up,” Brinkley said. “That has been the intent of all of our programs. Every disaster loan program we’ve ever had – even prior to COVID relief, the intent has always been recovery.”

Brinkley thinks the available cash will likely be enough to meet demand, but life is difficult to predict these days.

“For our Paycheck Protection Program, we’ve had to go back three times for additional money,” she said. “No one knows.”

Those who have received PPP loans are still eligible for the program, although applicants cannot receive additional PPP cash after taking an SVOG award and certain PPP funds may be deducted from the grant amount.

As the longest serving SBA employee in the nation, Brinkley, a native St. Louisan who will mark 54 years with the agency this fall, has seen plenty of tough times, but she’s called the current crisis the “most gut-wrenching, overwhelming situation” she’s seen during her time in government.

Patrick Hagin, managing partner of the Pageant, a storied St. Louis concert venue, said he appreciates the work the SBA has done.

“It is a big task they are taking on, especially in an industry that, from what I’ve gathered, was a little convoluted for the SBA to understand. It is a massive task,” he said. “Everyone really sees it as a lifesaver.”

While some non-profits have relied on patrons who back their philanthropic arm, for-profit enterprises like Hagin’s have been in an even tougher bind.

“Hopefully, it will help us make up on a lot of back rent and reimburse us for the hole we’ve been going into over all sorts of other expenses – insurance, payroll, utilities, on and on,” he said. “We burned through our reserve pretty thoroughly during the down time.”

He said the Pageant has been doing mostly local bands on the weekend with a capacity of 336 instead of the normal 2,000. The company’s smaller companion venue, Delmar Hall, has been shuttered completely during the pandemic.

Either way, the smaller shows aren’t paying the bills.

“But we are at least out there in front of people,” Hagin said. “It gives local artists a chance to make some money and it gives some of our staff a chance to also work and make a little bit of cash that way.”

Like the other venue operators, he feels the SVOG is much needed as everyone runs out the clock on the COVID-19 crisis that none of them ever expected.

“There’s really no income at the end of the day,” he said. “It is just a matter of how much you bleed.”

 

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