How PPP loans were distributed
More than 175 Bay Area businesses and nonprofit organizations were approved by lenders for loans of $5 million to $10 million each through the Paycheck Protection Program, a federal loan program created in April to help small businesses cope with the economic hardship caused by the coronavirus pandemic.
They include San Francisco’s leading arts organizations; major construction companies; food and wine makers such as Jelly Belly, Guittard Chocolate and
Guests look at the Andy Warhol celebrity portraits gallery in SFMOMA last year in 2019. The museum sought a PPP loan to offset pandemic closure losses.
Wente Vineyards; a hospital; a law firm; an insurance company; venturecapitalfunded startups; Berkeley tour operator Backroads; Francis Ford Coppola Presents in Geyserville; and two hotels affiliated with Richard Blum, Sen. Dianne Feinstein’s husband, according to a huge pile of data released Monday by the U.S. Small Business Administration. https://bit.ly/ppploanlist
Entities that use the money primarily for payroll and other allowed expenses within a certain time frame can have up to 100% of the loan forgiven. Alternative
ly, they can return the loan or repay it at an annual interest rate of 1%.
Congress has allocated $660 billion for the program; of that, about $130 billion remains to be disbursed.
California entities received the largest share of any state. About 580,000 businesses and nonprofits received $68 billion combined. The vast majority of those were small loans — $150,000 or less. The SBA disclosed names of only those who received more than $150,000, grouped into tiers by dollar amount.
The move comes after weeks of pressure by congressional Democrats and other groups wanting more details into where the money, intended to help businesses hard hit by the coronavirus, went. Some went to publicly held companies and franchisees of large restaurant chains. Some companies have returned the money. The SBA backs the loans, which are made by banks and other lenders.
In California, 647 entities got approved for loans ranging from $5 million to $10 million, the highest tier. At least 175 of those were in the Bay Area. Here’s a sampling of them:
A host of local arts organizations that saw patronage plummet due to widespread shelterinplace closures received large loans. They include the San Francisco Ballet Association, San Francisco Opera Association, San Francisco Symphony, California Academy of Sciences, the Exploratorium and the San Francisco Museum of Modern Art. For many, the funds meant keeping staff employed.
“Our PPP loan allowed the museum to cancel its announced furlough of 188 staff members and continue to pay staff full salary and benefits through the end of June,” Jill Lynch, communications director at San Francisco Museum of Modern Art, said in an email.
Two construction companies, Ghilotti Bros Inc. in San Rafael and Ghilotti Construction Co. in Santa Rosa, were listed. They are separate entities but were founded by an Italian immigrant 100 years ago. Ghilotti Bros., which works on public and private infrastructure, said the funds helped keep 250 employees on payroll. Other constructionrelated names on the list include Decker Electric, E2 Consulting Engineers, Giampolini, Nibbi Bros. and Truebeck Construction.
The list included consumer product companies such as Jelly Belly Candy Co., the Fairfield confectioner; Guittard Chocolate; apparel maker Byer California; and cookware maker Meyer Corp.
Some borrowers on the list, including the nonprofit Wikimedia Foundation, said they decided not to take the loan after applying for it. Others might repay the loan rather than seeking forgiveness.
The SBA said the list includes entities approved for a loan by a delegated lender, but that does not mean the SBA determined that the entity was eligible for the loan or entitled to forgiveness. It said the database does not include loans that were “canceled.”
There also seem to be some outright headscratchers. The list says the Lafayette Youth Baseball Association in Lafayette took out a $5 million to $10 million loan, but The Chronicle couldn’t find an organization with that name in Lafayette and it seems unlikely a youth sports league would need that kind of money. Some companies that showed up on the list, including San Francisco venture capital firm Index Ventures, tweeted that they had never even applied for the loan.
Some prominent Bay Area nonprofit organizations that applied for large loans are Bridge Housing, KQED, the Trust for Public Land and the Golden Gate National Parks
Conservancy. Catholic Charities of San Francisco, Marin and San Mateo counties took a $5.8 million loan to pay employees “delivering food, managing shelter hotels,” and performing other services that are in dire need during the pandemic, said chief executive Jilma Meneses. It’s even paying frontline employees hazard pay up to 20%.
The Chinese Hospital Association got a $7.6 million loan. After the shelterinplace order, it had to cancel elective procedures, which generate revenues, and at the same time pay for personal protective equipment, expand capacity for a possible coronavirus surge and provide free CO19 testing, said its chief executive, Jian Zhang.
There were many questions about whether companies that had fewer than 500 employees would be eligible if they were financed and “controlled” by venture capital or private equity firms whose portfolio companies together had more than 500 employees. The Treasury Department put out a paper explaining the complex “affiliation tests.”
Some apparently thought they qualified, as the list included venturebacked companies such as Getaround, Reputation.com, Hired, Homelight, Prosper Marketplace and Turo. Prosper said it’s using the proceeds to cover payroll for about 400 employees, along with rent and utilities as allowed.
Several educational organizations also applied for loans, including Mills College and Golden Gate University. The latter is “still evaluating the evolving criteria surrounding its use” and has not yet determined “how, or if, we might use it,” a Golden Gate spokesman said via email. As The Chronicle previously reported, several large charter school operators got loans exceeding $5 million, including Education for Change and Summit Public Schools.
Many companies that provide services to office buildings — now largely empty because of workfromhome and shelterinplace rules — reportedly applied for loans. They include catering firm Eat Club; No More Dirt, which provides janitorial services; the Inside Source, which sells office furniture and design; and several staffing and recruiting agencies.
Two limited liability companies with ties to Blum, Sen. Feinstein’s husband, were on the $5millionplus list. They are Claremont Hotel Properties and GDM Hotel Properties.
“The Claremont (hotel in Oakland) is owned by a Blum family trust and the Grand Del Mar (hotel in San Diego) is owned by a group of limited partners led by Mr. Blum. Both hotels are managed independently under contract with Accor/Fairmont, and they will apply the funds to pay existing employees, rehire employees, as well as for utilities and mortgage interest,” Blum spokesman Owen Blicksilver said in an email.
Feinstein “has no involvement whatsoever in her husband’s financial or business decisions. All her assets have been in a blind trust since her arrival in the Senate,” her spokesman said via email.
San Francisco law firm Farella Braun + Martel “saw applying for the PPP loan as the sound business decision at the beginning of the COVID19 pandemic with the potential to help keep our team whole,” Chairman Brian Donnelly said in an email.
San Francisco auto insurance company Metromile received a PPP loan of $5 million to $10 million in April, the same month it laid off 100 employees. The company said that from midMarch to early April, the number of miles driven by its customers dropped by 58%, majorly impacting its business. “We furloughed insurance operations roles like claims and customer service because our customers’ needs changed,” said Rick Chen, a spokesman for the company. Metromile has rehired about a dozen employees it laid off, and plans to hire more for new roles, Chen said. Kathleen Pender is a San Francisco Chronicle columnist and Shwanika Narayan is a San Francisco Chronicle staff writer. Email: kpender@sfchronicle.com, shwanika.narayan@sfchronicle.com Twitter: @kathpender, @Shwanika