Federal aid helps some eateries, but not all
Dalel Khalil said all the proverbial i’s were dotted, the t’s were crossed and, most importantly, the figures were correct and the application was submitted on time.
It had to be. Nothing short of her family’s legacy hung in the balance on the money they might receive from the $28.6 billion federal Restaurant Revitalization Fund, aimed at helping the hospitality industry recover from the COVID-19 pandemic.
It was all for naught, though — The restaurant got nothing from the government, and Ms. Khalil and her sister are trying to figure out what to do next.
Ms. Khalil and her sister, Leila, are the daughters of Syrian immigrants who came to Pittsburgh in 1956. Their father, Mikhail, was a butcher; their mother, Agnes, toiled in the old East Liberty Nabisco factory. In 1972 they opened Khalil’s restaurant on Baum Boulevard in Bloomfield, where it has been an institution for Mediterranean and Middle Eastern fare.
“The process was simple,” she said of applying for the federal money. “There was a three-week advance period for women and minorities, and so I was very happy. We’re two women, and minority. We don’t ask for much. We’re from the the old country — We know how to survive.”
Her accountants ran the numbers. It looked like they would get a reasonable lifeline.
“It was looking good. It was a nice amount. It would’ve gotten us help, and it would’ve been OK for the moment,” she said. “We were trying to budget, and we were banking on this money.”
They got nothing. And for now at least, all the grant money is gone.
“This is all we’ve got,” she said of her family business. “When we lose this, we’re done.”
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When the American Rescue Plan Act, which included the Restaurant Revitalization Fund, was signed into law March 11, the fund was hailed as a rare bipartisan triumph in Congress and a measure to help the small businesses most directly affected by pandemicrelated closures.
It was also immediately thought not to be nearly enough.
Industry advocates had asked for up to $120 billion as far back as last summer. According to a New York Times article, “more than 370,000 business owners applied for more than $75 billion in funding, nearly three times what the program had available.”
Thus far about 101,000 business owners have received nearly $28.6 billion
nationwide, an average award of about $285,000.
According to the Small Business Administration, 9,944 Pennsylvania businesses applied for close to $2.5 billion in grants, but only 3,530 received them, a payout totaling about $949 million for an average grant of about $269,000.
Registration began on April 30 with applications accepted starting May 3 for businesses owned by women, veterans, and socially and economically disadvantaged individuals. The general public could apply on May 24.
In addition to a funding dearth, lawsuits in Texas and Tennessee backed by right-wing attorneys and groups including ex-Trump aides Stephen Miller and MarkMeadows, and another in Hershey by Eric Nyman, owner of Penn Hotel & Raw Sports Bar, alleged that the priority application period discriminated against white men.
Judge Reed O’Connor of the U.S. District Court for the Northern District of Texas — who has routinely been characterized as a blatant conservative activist judge, even by fellow conservatives — ruled in favor of them and against the SBA on
May 28.
That is what held up Ms. Khalil’s potential payment, which she wouldn’t divulge other than to say “it was a good amount.”
“I applied and we kept waiting and waiting and eventually were told it’s on freeze because of a lawsuit, and our status is under review,” Ms. Khalil said. “A response came back to say that if funds have not been received by June 30, it ain’t coming unless Congress allocates more money.”
“Our initial plan and goal was to reach underserved restaurants who were so heavily impacted during the pandemic,” said SBA spokesman Christopher Hatch. “As we know, the previous programs did not necessarily reach down to the smaller business, and our idea was that this would help.
“We followed the judges orders,” he said. “The lawsuits certainly had an impact.”
Mr. Nyman received $640,425 on June 1.
• Locally, 338 businesses listed in the city of Pittsburgh, plus hundreds more around Allegheny County and the surrounding counties, did get money.
The rough calculation was pretty straightforward: a business’ 2019 gross receipts minus its 2020 gross receipts minus any money received via a PPP loan equaled their grant amount. Figures had to be backed up by adequate documentation, including tax returns, bank statements, point-of-sale reports, income or profit and loss statements, and Tax and Trade Bureau forms. Grants were capped at a total of $10 million with a maximum of $5 million per a single location.
The Whole Enchilada restaurant group received the maximum award of $10 million, which elicited some blowback on social media, but company president Bill Fuller was quick to point out that the money offset losses at 12 Mad Mex locations, six boutique restaurants and a catering division. The company employs roughly 1,000 statewide.
“It’s brutal. It’s going to continue to be brutal. And we’re thankful for this money to help us to keep getting along,” Mr. Fuller said, noting that the restaur a n t industry still is plagued by employee shortages and inflationary price spikes for crucial products.
Common Plea catering was awarded $5 million, the second highest amount locally, and the most for a caterer. Armstrong Foods Inc. of Butler County was awarded nearly $3.6 million for a Ponderosa Steakhouse at the Clearview Mall. The Hyde Park steakhouse on the North Shore received $2.8 million for that location alone, the largest amount for a single restaurant in Pittsburgh.
The Milkshake Factory received nearly $2.5 million spread over nine locations, but it was not lost on many that billionaire Thomas Tull is a partner in the business.
Darwin Copeland has rolled with a series of punches since the pandemic began. In July 2020, his Z-Best BBQ on Fifth Avenue, Uptown, was damaged by a fire. He had to close for a few months and then relocated to the Hill District.
He was awarded $11,475. “It’s never enough, but I’m grateful that I did get what I got,” he said. “Our inventory is thousands of dollars each week, so it’s just a [drop] in the bucket from that standpoint. But it helped out. I’m grateful … We’re persevering.”
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Mr. Hatch said applications from business that did not receive grants remain on file and could get money if Congress replenishes the fund. There is a bipartisan movement to do so.
Ms. Khalil said she’ll be contacting her congressman, Mike Doyle, D-Forest Hills. In the meantime, she has to figure out how to pull off a wedding scheduled at her restaurant.
“My heart really goes out to people in a worse position. I inherited this. I’m not going to have a pity party for me,” she said.
“We’re going to survive. We are two women who are a staple in Pittsburgh. We’re a rock in this city. We survived the closing of the steel mills. We survived for 49 years. We’ll damn sure crawl to 50 if we have to. We’re not giving up. That’s not us.”