Theaters and music venues that still can’t reopen because of COVID-19 are searching for answers from the Biden administration a week after a new relief program was shut down almost immediately after it went live.
The Small Business Administration decided to open applications for the program despite red flags from an agency watchdog and confusing guidance on who exactly could apply, according to would-be applicants who are still awaiting word on a reopening date.
“I think finally there was so much pressure that they were like, we have to go live with this. But they were not ready to do so. It’s more of an embarrassment,” said Paul Deckard, managing director of Opera Colorado. “They should have waited.”
Congress authorized the program, which doles out grants to shuttered theaters and performing arts centers that have lost money due to the pandemic, as part of a coronavirus relief package former President Trump signed into law in December.
Lawmakers approved $15 billion for the program in December and an additional $1.25 billion as part of the $1.9 trillion relief package President Biden signed into law last month.
The applications are first-come, first-served, which led to a rush of potential grant recipients rushing to the portal on April 8 and waiting. And waiting. And waiting.
“I’ve heard it’s going to open today; I’ve heard it’s going to be a while. I don’t know what’s true,” said Michael Strickland, founder of the lighting company Bandit Lites, Inc. who has taken the reins in serving as an intermediary between the SBA and industry stakeholders.
The SBA says there’s no exact reopening date planned at the moment but that they’ll continue to provide updates and give applicants advance notice for when the portal reopens.
The agency ran multiple successful tests of the application process but they still experienced technical issues when the portal launched. Those glitches have since been fixed, according to SBA.
“When we re-started rigorous testing with our vendors and did additional risk analysis, our teams identified other potential performance issues, which we are working to resolve,” said SBA spokeswoman Andrea Roebker. “We are focused on strengthening the portal’s performance and user enhancements for when it reopens.”
She said the decision to shut down the portal at about 4:15 p.m. ET on April 8 — more than four hours after the launch time — was “not made lightly.”
“We understand the need to get relief quickly to this hard-hit industry,” Ms. Roebker said.
But Mr. Deckard, Mr. Strickland and others said the issues with the process went well beyond the portal.
Mr. Strickland said there was a confusing series of questions for applicants that incorrectly mixed and matched live performing arts operators and promotors with questions that weren’t relevant or answerable for people in those positions.
“It’d be like asking you, ‘The NFL football [team] that you own, do you have a bus?’” he said. “Well, you know, you don’t own an NFL football team.”
The grant amount — which can go up to $10 million — is calculated as 45% of gross earned revenues. Mr. Deckard said the only place on one application form to put financial data was a table that asked for gross revenues, which is used to calculate something else.
“It’s very clear that this has been a rushed process and I can’t believe here we are, we’re 100 days from the day they announced the program and we still have critical issues with the application not matching up with the legislation,” Mr. Deckard said.
Mr. Strickland said it’s his understanding that the SBA was in the process of correcting some of the questions. The agency said it would continue to engage with stakeholders.
Beyond the issues with the roll-out, the SBA’s Office of Inspector General warned one day before the aborted launch date that the agency does not have adequate staffing or a clear plan in place to properly oversee the program.
“At this time, SBA has not formalized a plan for staffing this office relative to the volume of applications expected,” the report said. “The agency has also not defined the organizational structure for administering the program.”
Rep. Blaine Luetkemeyer of Missouri, the top Republican on the House Small Business Committee, said he told SBA Administrator Isabel Guzman that the program shouldn’t open back up without major fixes.
“My personal opinion is if you can’t protect the integrity of the program and our tax dollars, they don’t need to be up and running until they can solve those problems,” Mr. Luetkemeyer told The Washington Times.
He said the SBA appears to be “overwhelmed” given their current manpower and technology.
“It’s not enough manpower and it’s not adequate technology to be able to do what they’re doing, as evidenced by the rollout and the IG report,” the congressman said.
Mr. Strickland said he did not blame the SBA because the agency did its best to carry out a “herculean” task in such a short time.
“I applaud them,” he said. “They do not understand how live entertainment works. Very few people do.”
Still, he said time is of the essence, likening the perpetual promises of relief for the entertainment industry to the slow but inevitable sinking of the Titanic.
“The Titanic has sunk and the people in the lifeboats are telling the people in the water, there’ll be another boat in four hours,” he said. “Well, we’ll be dead in four hours.”