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February 4, 2021 Article 4 min read
A provision in the recently enacted budget bill offers grants for operators of entertainment venues that have been affected by COVID-19 restrictions, but eligible businesses and arts organizations will need to act quickly to qualify for “Save our Stages Act” relief.
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The Consolidated Appropriations Act, 2021 (budget bill) enacted in December 2020 contained numerous COVID-19 relief provisions, including “Save our Stages relief” intended to support performing arts organizations and operators of entertainment venues that have been closed due to pandemic-related restrictions. This provision offers grants for shuttered venue operators that will be administered by the Small Business Administration (SBA).

Who qualifies for Save our Stages relief?

The budget bill sets aside $15 billion in grants for those in the following fields who can demonstrate a 25% reduction in revenues:

  • Live venue operators or promoters
  • Theatrical producers
  • Live performing arts organization operators
  • Museum operators
  • Motion picture theater operators
  • Talent representatives

To qualify, the affected entity must have been in operation as of Feb. 29, 2020, and it must have either resumed operations or plan to continue operations. It must be able to certify the need for funds, including a showing that gross earned revenue declined by 25% during any quarter of 2020 as compared to 2019. The legislation spells out certain characteristics that museums, theaters, live venues, and performing arts organizations must have to qualify for the SBA’s Save our Stages relief, such as specific types of performance spaces and employees who perform certain functions.

The Save our Stages relief provisions include several timing priorities based on the severity of the impact of COVID-19 on an entity’s revenue.

The law also specifically excludes some entities from eligibility for the program. For example, entities that are listed on a national exchange (or are owned or controlled by an entity that is listed), received more than 10% of their gross revenue from federal funding in 2019 (certain disaster relief and emergency assistance funds are excluded from this calculation), operate in more than one country or more than 10 states and employed more than 500 FTEs at the start of the pandemic aren’t eligible for these grants. Further, entities that receive Paycheck Projection Program loans after Dec. 27, 2020, aren’t eligible for these grants.

Priority grants for shuttered venue operators with urgent need

The Save our Stages relief provisions include several timing priorities based on the severity of the impact of COVID-19 on an entity’s revenue. In the first two weeks of the program, grants will be awarded only to entities that have had a 90% reduction in revenue due to the COVID-19 pandemic. In the second two weeks of the program (weeks 3 and 4 overall), grants will be awarded only to entities that have had a 70% reduction in revenue due to the COVID-19 pandemic. After the initial priority periods, grants will be awarded to all other eligible entities. The revenue figures are based on comparison of the period between April 1 and December 31 for 2020 and 2019. COVID-19 relief received under any provision of the CARES Act or an amendment thereto can be excluded from revenue for purposes of this calculation.

The law does hold back 20% of the $15 billion to be awarded after the priority period, and $2 billion is set aside for entities with less than 50 FTEs.

Amounts and uses of grant funds

Eligible entities will have a 60-day period to apply for the grants. The application will require a good-faith certification that the uncertainty of current economic conditions makes the grant necessary to support ongoing operations.

If the entity was in operation on Jan. 1, 2019, it’s eligible for an initial grant up to 45% of gross revenue earned in 2019. If it started operations after Jan. 1, 2019, it’s eligible for a grant up to six times the average monthly gross revenue earned for each month of operations (up to $10 million). Supplemental grants of up to 50% of the original grant amount may be awarded to initial grantees if the entity’s revenues for the quarter ended March 31, 2021, are not more than 30% of revenues for the quarter ended March 31, 2019, due to the COVID-19 pandemic. The total of initial and supplemental grants can’t exceed $10 million for any entity. An entity that receives a grant under this program will not be eligible for any new PPP loans.

If the entity was in operation on Jan. 1, 2019, it’s eligible for an initial grant up to 45% of gross revenue earned in 2019.

Initial grants may be used for costs incurred from March 1, 2020 through Dec. 31, 2021. Supplemental grants can be used for costs through June 30, 2022. The grants may be used to cover a wide range of business costs, such as payroll, rent, utilities, mortgages, and similar ordinary and necessary business expenses. There are some prohibited uses for the grant funds, including purchase of real estate, payments on loans originated after Feb. 15, 2020, political activities, and certain investments or relending of funds.

Act quickly

Few COVID-19 relief provisions carry the kind of time sensitivity that has been built into the Save our Stages relief. If you believe that your business or organization may be eligible for one of these grants, it’s important to watch for additional details about the application process as they become available and to begin assembling the financial information and certifications that will be needed to support your application. If you need any assistance, please contact Plante Moran.

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