Los Angeles Music Scene: Frustration Growing with Save Our Stages Funding

Shuttered Venue Operators Grants as of June 3rd were being issued at a snail's pace. On that date only 50 grants had been awarded. As of Jun 14th, that had increased to 411. Now that is out of 14,214 submitted applications so we're talking just 2.9% of applications have had their grant approved, but one has to admit the pace is increasing. Hopefully, that snail's pace starts to speed up to that of a race horse running down the stretch.

(Note: some of the grant numbers below have lower figures than the 411 that I mention above. The reason is the articles are dated and so are using older reports from the Small Business Administration.)

Frustration is mounting regarding the Shuttered Venue Operators Grant process.

Music Fest New (Jun 10th) had this quote from Sean Watterson, who co-owns The Happy Dog in Cleveland:

The Office of Disaster Assistance never wanted this program. They resented being blamed for fraud in other programs, like PPP and EIDL, and reacted spitefully, solving for the risk of fraud by not making any awards at all (90 grants in response to the 14,000 applications made).

We’ve been lied to, blamed, ignored, patronized – everything but funded. The SBA hired 500 reviewers who took 6 weeks to make 90 grant awards. Any way you do the math, it is unforgivable.

The SBA has singlehandedly done more damage to independent music venues in the last six months than covid did in the prior nine. Life savings exhausted, homes mortgaged, personal guarantees made on lines of credit – all done after the bill passed, with the expectation of implementation.

On the plus side for The Happy Dog, their first show will be on June 25th. I do hope he's already gotten his funding, because on the negative side: has the Small Business Administration read that quote?

Gothamist (Jun 12th) had this quote from Kambri Crews, who owns the Q.E.D. Astoria in New York (appears to be a comedy club):

So many folks acting like QED has survived. Nope we’re just enjoying the protections of the eviction moratorium as we wait for relief and I hang on by a thread with mounting debt and stress I couldn’t have imagined. #saveourstages

That does not sound good -- though I still have to say I'm not sure why a bank or landlord would walk away from the potential of collecting significant back payments. 

The article provides this tidbit for what is causing some of the issues for some venues.

In addition, many venue owners have run into issues with 4506-T tax forms and "Death Match Files"—some owners received notices from the SBA that they were deceased and ineligible for funds despite being very much alive.

What is a 4506-T tax form? Looking it up, it appears to be specific to businesses that don't due their tax forms on a calendar basis. Most of us pay our taxes based on our income from January 1st to Dec 31st. I guess some businesses pay taxes that cross fiscal years and so need to fill out a 4506-T tax form.  

Also, maybe the SBA didn't have one of their best individuals leading the charge:

The person leading the SVOG has been replaced by people that led the Restaurant Revitalization Fund, and they are adding more application reviewers to the team. 

Variety (Jun 15th) adds this additional fact:

Almost six months after Congress passed the $16 billion Save Our Stages act into law, less than 100 of the nearly 5,000 struggling independent venues have been approved for relief money, according to its most recent report, released June 9 by the Small Business Administration, which distributes the loans. Venue sources tell Variety that just “a few” have actually received any money.

As I mentioned previously, getting approved for a grant is just step one. The next step is filling out even more paperwork on how the funds will be used.