Report: Two-thirds of NYS restaurants that sought COVID-relief grants were turned away

Only 35% of the restaurants, bars and caterers in New York State that applied for COVID-19 help from the federal Restaurant Revitalization Fund will receive grants, according to a new report.

Nearly 9,800 eating and drinking establishments across the state won a total of $3.7 billion from the RRF as of June 30, according to the U.S. Small Business Administration, which runs the program. More 17,860 applicants, who together sought almost $6 billion, were shut out.

Nationwide, the percentage of successful RRF applicants was similar, with 101,000 businesses securing money out of 278,300 applications received, the SBA report states. The applicants sought a total of $72 billion, but the RRF only had $28.6 billion to distribute and has now closed.

The report comes as a bipartisan group in Congress is pushing to reopen the RRF with an additional $60 billion.

The SBA report doesn’t include information about RRF grants on Long Island. Newsday has filed a Freedom of Information request for the data.

"Final data for the RRF program, which will include individual payment-specific information, will be coming at a later date," SBA spokesman Matt Coleman said on Wednesday.

The RRF, established by Congress and President Joe Biden in March, provided up to $10 million per business to make up for revenue losses during the pandemic.

The funds can be used to pay employee wages, mortgage and rent payments, utility bills, outstanding debts, construction of outdoor seating and other operating expenses. The money must be used by March 11, 2023.

The bulk of the RRF grants went to restaurants, caterers and bars. Another 1.3% went to food trucks, and less than 1% went to brewpubs and wineries.

The program has been the subject of several lawsuits by white restaurateurs because minorities, women, veterans and the owners of eateries in poor neighborhoods were given priority for the grants under the law.

In late May, a federal Circuit Court of Appeals in Cincinnati struck down the SBA’s prioritization system, calling it "racial gerrymandering," and said it used "unconstitutional criteria" to award RRF grants.

SBA responded by rescinding nearly 3,000 grant approvals for the priority groups. Excluding the cancellations, $18 billion, or 63%, of the money went to the groups, according to agency data.

The pandemic’s impact on the priority groups was more severe. For example, Black-owned firms in New York State closed at nearly three times the rate of white-owned firms last year, according to an August report by the Federal Reserve Bank of New York.

SBA administrator Isabella Casillas Guzman said, the RRF "provided desperately needed relief to more than 100,000 restaurants and other food and beverage businesses across the nation with significant funding going to our hardest-hit, underserved businesses."

She continued, "The SBA will continue to work hard to ensure [eating and drinking establishments] get the resources they need to recover, rebuild and be resilient."

Businesses in New York State were No. 2 in RRF funding after California, according to the SBA report.

By James T. Madore

james.madore@newsday.comJamesTMadore

James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.