WASHINGTON — More than 1,100 of Hawaii’s restaurants, bars and bakeries received $414 million through a federal grant program aimed at offsetting revenue losses caused by the COVID-19 pandemic, according to newly released data from the U.S. Small Business Administration.
On a per capita basis, that’s more money than any other state and second only to the District of Columbia.
Still, many of the Aloha State’s food and beverage businesses were on the outside looking in when it came to snatching up federal dollars.
The $28.6 billion Restaurant Revitalization Fund was created in March when Congress passed the $1.9 trillion American Rescue Plan to help curb the economic strains caused by an ongoing global epidemic that’s claimed more than 600,000 lives in the U.S.
The fund, however, quickly ran out of money, which has left hundreds of thousands of business owners clamoring for a second serving of federal aid.
In Hawaii alone, the SBA received 2,396 applications from businesses that sought more than $980 million in relief aid. Fewer than half of those applications were approved before the well ran dry.
Nico Chaize is among the restaurateurs who lost out. Chaize is the chef and owner of Nico’s Pier 38 at the Honolulu Harbor. He said he was forced to shutter one of his restaurants, Nico’s Upstairs, during the pandemic.
Money from the Restaurant Revitalization Fund could have helped reopen the doors and contend with rising prices caused by inflation, but he didn’t make it out of the queue.
That doesn’t mean Nico’s Pier 38 didn’t get any help, he said. His restaurant was still able to secure millions of dollars through the SBA’s Paycheck Protection Program, which pumped nearly $3.6 billion in forgivable loans into tens of thousands of companies in the Aloha State.
“That was enough funding to help us stay alive,” Chaize said. “I’m still trying to breathe after all the craziness. When the pandemic started it was all very shocking.”
Under the program, businesses could receive up to $10 million to help offset pandemic related losses. The money could be used for a wide array of expenses, from payroll and rent to construction of outdoor seating and day-to-day business expenses, such as purchasing food and alcohol.
Nationally, the average grant size was $283,000. In Hawaii, the number was higher, nearly $362,000.
The company behind Roy’s restaurants, which are located throughout the state, was the only business to receive a $10 million grant. Other top recipients include the companies behind Island Vintage Coffee, the islands’ Chuck E. Cheese franchisee and Zetton Inc., a Tokyo-based restaurant group that operates a number of restaurants in Waikiki.
All told, the data shows that nearly 90 companies received grants worth more than $1 million, including Liliha Bakery, La Mariana Sailing Club and Maui Brewing Waikiki.
Yuka Nawano is the president and CEO of Eggs ’n Things, which has locations in Hawaii and Guam. Nawano and her company received more than $7 million through the Restaurant Revitalization Fund as well as more than $2 million in PPP loans, according to SBA data.
She said that during the pandemic her restaurant lost about 90% of its revenue. The grant money from the Restaurant Revitalization Fund has helped, she said, but there’s still a lot of uncertainty.
Loosening restrictions in Hawaii has allowed Eggs ’n Things to cater to mainland tourists again, but the Japanese visitors who accounted for up to 70% of Nawano’s business in Hawaii have yet to return due to strict quarantine requirements in that country.
Local social distancing rules in Hawaii also mean her restaurants still can’t operate at true capacity.
“We basically felt like we were a bunch of people on the Titanic waiting for a rescue boat to come,” Nawano said. “We were able to jump off the Titanic and land on a boat, but we’re still out in the vast ocean trying to get to shore.”
Nawano said she knows she’s one of the lucky ones to receive federal restaurant aid, and hopes that more funds will be made available for those who didn’t get picked.
When the SBA opened up the Restaurant Revitalization Fund for applications on May 3, it announced it would prioritize businesses owned by women, minorities and veterans for three weeks before doling out grants on a first come, first serve basis.
By May 18, the agency had already received more than 300,000 applications from businesses seeking nearly $70 billion in aid, almost three times the amount available.
“We basically felt like we were a bunch of people on the Titanic waiting for a rescue boat to come." — Yuka Nawano, Eggs ’n Things
The SBA closed the fund this week after doling out 101,000 grants across the U.S., with much of that money — approximately $18 billion — going to underserved populations, something that spurred legal challenges from white business owners and conservative groups who argued the three-week priority period was discriminatory.
It’s now up to Congress to decide if it wants to replenish the program.
A bipartisan, bicameral group of lawmakers, led by Kyrsten Sinema and Roger Wicker in the Senate and U.S. Reps. Earl Blumenauer and Brian Fitzpatrick, are already looking to rejuvenate the fund with an additional $60 billion.
Hawaii Congressman Ed Case, who is on the House Appropriations Committee, is among the co-sponsors of the legislation.
“There was a massive amount of aid that went out from the federal government, but the massive need overwhelmed the available assistance, and that happened in spades with the restaurant fund,” Case said. “There was major assistance throughout Hawaii, but clearly the need is still there and clearly it’s a very active subject of discussion right now in the bills we’re taking up.”
Whether anything actually gets passed is another question, he said.
Not a single Republican voted for the American Rescue Plan, and partisan gridlock, fueled by party tribalism, is the norm even in situations where lawmakers seem to have at least some agreement on policy.
“This is a severely affected industry, and we are not alone,” Case said. “I am working with my colleagues from around the country who have the same concerns we do.”
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