Just 12% of Long Island’s restaurants, bars and catering halls won grants from the federal Restaurant Revitalization Fund before it ran out of money, according to a Newsday analysis of federal data.
Approximately $270 million went to about 1,100 eating and drinking establishments in Nassau and Suffolk counties, the analysis shows. There are nearly 9,200 such establishments licensed by the county health departments.
"A large swath of people applied and didn’t get a grant – and that’s led to a high level of disappointment," said Eric Alexander, founder of the downtown advocacy group LI Main Street Alliance. "But for those that received RRF, the money has helped them to stay open, to pay staff, to buy food and to remain viable in downtowns where they really matter."
The average grant amount was $248,250. About 40 businesses received more than $1 million each, while nearly 500 got less than $100,000, according to data from the U.S. Small Business Administration, which Newsday obtained under the Freedom of Information Act.
The restaurant grant program differed from Washington’s marquee pandemic-relief initiative, the Paycheck Protection Program, in that it gave priority to businesses owned by women, veterans, members of minority groups, low-income individuals and those that operate in poor neighborhoods. The PPP was criticized because a disproportionate share of the bank loans went to large businesses and white-owned businesses.
On Long Island, the priority groups accounted for seven in 10 RRF recipients, including 259 women-owned restaurants and 284 whose owners said they were socially or economically disadvantaged, Newsday's analysis shows.
For the program's first 21 days, starting on May 3, SBA approved only priority-group applications. However, the agency was overwhelmed, receiving more than 266,000 forms in the first 10 days. Together, the requests topped $65 billion – far more than the $28.6 billion authorized by Congress.
"There was a frenzy," said Alexander, whose group represents 45 downtowns. "Restaurant owners have compared the RRF to trying to win the lottery," he said.
By the time SBA closed the program in July, nearly 101,000 businesses nationwide had been given grants, or about one third of all applicants.
For the owners of Butterfields Restaurant in Hauppauge, a $143,507 grant has meant they’re still operating while two eateries nearby have closed permanently.
Raymond A. Perez and Luis V. Almonte said they put the RRF money toward rent, salaries for 17 employees, food costs and bar equipment.
The business partners said the funding arrived at a critical time. Butterfields' PPP loan money had been spent, but its sales were still only half of what they were before the coronavirus struck in February 2020.
"We wouldn’t have survived without the RRF," Perez said. "We’re still struggling but we’re not in a situation of desperation…We’re honored that [Congress] came up with a program to help minority business owners like us," he said.
Butterfields is among hundreds of small restaurants and bars that won RRF grants, according to the database. However, the largest amounts went to prominent restaurant groups and catering halls.
The Scotto family secured $15 million in three grants. Their portfolio of upscale eateries and catering halls includes Watermill Caterers in Smithtown, Westbury Manor catering hall in Westbury and Blackstone Steakhouse and One10 restaurant, both in Melville. Executives didn't respond to requests for comment.
Ram Caterers in Old Westbury won two grants, totaling $8.1 million. The kosher caterer operates from the Old Westbury Hebrew Congregation and in Manhattan, from the Ziegfeld Ballroom and Gotham Hall. Ram executives didn’t respond to requests for comment.
The Dover Group in Freeport received $5.8 million in three grants. It operates Peter's Clam Bar in Island Park, Hudson's on the Mile in Freeport and The Sands catering hall and Malibu Shore Club, both in Lido Beach, among others. Founder Butch Yamali was unavailable for an interview, his spokesman said.
Grant amounts are based on revenue losses last year compared with 2019, minus any PPP loan or Economic Injury Disaster Loan the applicant received.
The maximum award is $10 million per business and the money must be spent by March 11, 2023.
The eating and drinking establishments that landed RRF grants are often adjacent to or down the block from those that lost out, creating winners and losers in the still-shaky economic recovery, said Mario Saccente, president of the 500-member Long Island chapter of the New York State Restaurant Association.
"People who got the RRF are able to buy more [food] products, add items to the menu, offer employees an extra $1.50 per hour to keep them, and to make renovations," he said. "The guy down the street that didn’t get a grant cannot do any of that. ... You have a huge competitive advantage if you received this money because it’s so desperately needed."
Saccente and representatives of another industry trade group, the Independent Restaurant Coalition, said they are lobbying Congress to replenish the RRF with at least $60 billion.
Senator Chuck Schumer (D-N.Y.), the majority leader, has said additional funding will be voted on once President Joe Biden’s climate change and social welfare agenda is enacted. More than 40 senators and 222 House members have endorsed more RRF money, according to a tally from the restaurant coalition.
At Nick & Toni’s Restaurant in East Hampton, co-owner Mark Smith said its $636,364 grant "has allowed us to remain in business and to continue to operate." The funds have gone toward salaries for 40 employees, rent, utilities, construction of outdoor seating and personal protective equipment such as masks and hand sanitizer.
"We probably won’t see business return to normal until the pandemic ends and even then, we aren’t sure that staffing levels will return and [wholesale food] prices will normalize," he said of the 125-seat restaurant.
Daniel Pedisich, owner of Konoba Huntington, agreed, saying the pandemic has compelled him to consider new ways of operating. He said fewer people are venturing out after 10 p.m., when they used to stop at his restaurant for late dinner, drinks or coffee and dessert.
"People’s habits have changed, so you need money to get over the hurdle until you figure out your new business model," Pedisich said, referring to the $67,167 RRF grant that’s helping to sustain his 107-seat eatery and 10 employees. "I’m not fully sure what it is yet."
Pedisich said restaurants in Nassau and Suffolk are facing "a lot of headwinds": customers still fearful of catching the coronavirus, higher food costs and too many eateries chasing too few diners.
"Everyone thinks that we reopened, so it’s normal," he said. "But it’s not. It’s so far from normal that it’s not even funny at this point."
The awarding of RRF grants was upended by three lawsuits filed by white restaurateurs challenging the constitutionality of giving women, veteran and minority owners priority.
In late May, the federal Circuit Court of Appeals in Cincinnati struck down the RRF's system, calling it "racial gerrymandering" and saying it used "unconstitutional criteria" to determine grant awards.
SBA responded by rescinding nearly 3,000 grant approvals to priority-group applicants and then giving the money to white applicants. The number of Long Island applicants affected by this decision wasn't available.
"Demand for RRF funding from applicants exceeded the RRF's budgetary authority appropriated by Congress," said SBA spokesman Matt Coleman, adding the agency followed congressional directives in handing out the money.
Among those whose grants were rescinded are the owners of two off-Island restaurants who live in New Hyde Park.
Tian Ma and Peng Liu were counting on $943,796 and "suffered losses in continuing to remain open while waiting for [the] funds," the pair said in a lawsuit filed in June in Manhattan federal court. They said they are seeking "reparations in the form of the original award amounts."
SBA won’t use the prioritization system if Congress puts more money into the RRF because that system only applied to the program’s first three weeks, said Erika Polmar, executive director of the Independent Restaurant Coalition, which has 125,000 participants including 10,000 in the metropolitan area.
"There will no longer be a priority period when the RRF starts up again," she said. "But Congress needs to approve more funding. … We lost 100,000 restaurants [nationwide] last year and more are closing every day."
Surviving the Pandemic
661 Old Willets Path, Hauppauge
Employees: 17, down from 25 to 30 pre-pandemic
Known for: Seared ahi tuna, grilled burgers, steaks
History: Opened in 2001; named after the 1960 movie "BUtterfield 8" starring Elizabeth Taylor
Daily takeout orders from one company kept Butterfields from going under in the pandemic’s early days, the restaurant's owners said.
Raymond A. Perez and Luis V. Almonte received their first takeout order in mid-March 2020 from Better Living Now Inc., a seller of medical supplies, also in Hauppauge. The state had just halted indoor dining to slow the coronavirus’ spread.
The twice-a-day orders, Monday through Saturday, fed between 50 and 100 Better Living Now employees when little was known about the virus. The orders continued for months while the Butterfields dining room remained closed.
Better Living CEO Daniel Pope "loves Butterfields and didn’t want to see us close," Almonte said.
Handling the Better Living orders was challenging at first because the restaurant hadn’t been offering takeout service. But Almonte, Perez and a cook — the only Butterfields workers not collecting unemployment — soon mastered the packaging, utensils, condiment packets and other essentials of the takeout trade.
Those daily orders "were our lifeline" until outdoor dining started in July 2020 and Butterfields received two Paycheck Protection Program loans and a Restaurant Revitalization Fund grant, Almonte said.
The eatery is introducing a brunch menu and promoting its live music events on Thursday, Friday and Saturday nights to attract customers, he said. Its lunch business remains down because many employees of the companies in the nearby Hauppauge Innovation Park are still working remotely.
B.K. Sweeney's Parkside Tavern
356 Broadway, Bethpage
Employees: 24, down from 35 to 40 pre-pandemic
Known for: CPI chicken sandwich, burgers, pasta
History: Started as Central Park Inn, or CPI, in 1976; became B.K. Sweeney's in 1995
B.K. Sweeney’s, like most restaurants on Long Island, is facing an uncertain future because of higher food prices and a scarcity of workers and customers.
But the decades-old eatery has a "nest egg" in the form of a $320,967 Restaurant Revitalization Fund grant to be used "to pay employees and other expenses this winter," said co-owner John Coumatos.
He cited three factors as key to B.K. Sweeney’s survival so far: strong support from the Bethpage community, little debt when the pandemic started last year and continuing to pay bills with the help of two Paycheck Protection Program loans.
"We’re in better shape than some others but we’re going to save some of this [RRF] money for another year," he said, adding that sales are still only 60% of what they were in 2019.
"Hopefully business gets better but that depends on what goes on with COVID in the wintertime…People are still afraid to come in," Coumatos said.
Hiring also remains a big challenge. Employees are coming in on their days off to work a couple of hours, so shifts are covered but overtime pay is manageable.
He said, "Our employees are bending over backwards to help."
Other sources of aid
The Restaurant Revitalization Fund is out of money unless Congress approves more. Here are other sources of loans and grants:
COVID-19 Economic Injury Disaster Loan: Loans of up to $2 million from the U.S. Small Business Administration with a 3.75% interest rate and 30-year term. Applications must be received by Dec. 31. (sba.gov/funding-programs/loans/covid-19-relief-options/eidl)
NYS COVID-19 Pandemic Small Business Recovery Grant Program: Grants of between $5,000 and $2.5 million from Empire State Development based on the business’ annual gross receipts. (nysmallbusinessrecovery.com)
NYS Restaurant Resiliency Program: $1.6 million in grant funding for the Long Island Cares and Island Harvest food banks to spend on meals prepared by restaurants. (agriculture.ny.gov/restaurantresiliency)
Boost Nassau Main Street Recovery Grant Program: Taxable grants of up to $10,000 for small businesses and nonprofits with fewer than 50 employees and annual revenue under $5 million. (ndc.smapply.io/prog/boost_nassau_main_street_recovery_grant_program) — Compiled by James T. Madore
TOP 10 GRANTS
* Scotto Brothers catering halls/Anthony Scotto restaurants, Woodbury, $5 million
* Inn at New Hyde Park catering hall, New Hyde Park, $5 million
* Watermill Caterers (Scotto family), Smithtown, $5 million
* Westbury Manor catering hall (Scotto family), Westbury, $5 million
* Dover Gourmet Corp. (Butch Yamali), Freeport, $4.9 million
* VIP & Ram Passover caterers, Old Westbury, $4.9 million
* L&M Events/Temple Israel catering, Great Neck, $3.5 million
* Ram Caterers, Old Westbury, $3.2 million
* DJ's International Buffet, Garden City, $3 million
* Chateau La Mer catering hall, Lindenhurst, $2.9 million
Source: U.S. Small Business Administration data