Rep. Eric Swalwell and East Bay restaurateurs called Tuesday for the federal government to allocate more money to the Restaurant Revitalization Fund to help restaurants stay open through the pandemic.
The program, operated through the U.S. Small Business Administration, was launched as part of the American Rescue Plan Act and awarded $28.6 billion in relief funds to roughly 100,000 restaurants, food trucks, caterers and other food-providing businesses that lost revenue due to the pandemic.
However, more than 370,000 restaurants initially applied to the grant program, which ultimately ran out of money and had to turn away more than two-thirds of applicants.
Swalwell, D-Castro Valley, and Rep. Earl Blumenauer, D-Oregon, argued in a virtual briefing Tuesday that the initial round of funds kept many small businesses from closing for good, and many restaurants could still meet that fate without additional financial support.
Blumenauer is the co-author of the Restaurant Revitalization Fund Replenishment Act, a bill with bipartisan support in the House of Representatives and Senate that would inject $60 billion in new funding into the program.
“There is no area that was hit harder when the COVID crisis hit two years ago, and they’re continuing to struggle,” Blumenauer said.
Swalwell noted that an estimated 90,000 restaurants have closed across the country since the pandemic began, according to data from the National Restaurant Association.
Bill Rinetti, the owner of Massimo’s in Fremont, said he applied but was not chosen for a grant through the Restaurant Revitalization Fund.
Meanwhile, after an encouraging fall, the “bottom dropped out” of his restaurant’s customer base in January amid the Bay Area’s surge of omicron variant cases.
Rinetti argued his restaurant will have to reinvent itself due to the pandemic, which has altered the restaurant market and led to a higher demand for outdoor dining, but he lacks the financial resources to do so.
“I don’t have enough money to reinvent myself, to buy new equipment, to hire new staff,” Rinetti said, adding that Massimo’s outdoor patio needs significant repairs and customers have complained that it’s uncomfortable, but he lacks the funds to fix it.
A January 2022 study from the Independent Restaurant Coalition of nearly 1,200 restaurants and bars found that 42 percent of those that did not receive a grant are in danger of filing for bankruptcy or have already done so.
Just 20 percent of restaurants that received a grant through the RRF program said the same, according to the study.
In addition, 80 percent of businesses that did not receive relief funds through the RRF said they are at risk of closing for good without additional funding support.
Blumenauer called for federal legislators to “get this across the finish line, (carve) out space in whatever financial instrument is moving,” to replenish the program.
“This is critical,” he said. “Congress has the opportunity to be able to fill this gap and make a huge difference.”