The Walnut Creek City Council will discuss whether or not to approve a Restaurant Grant Program to help the restaurant community as a result of the financial loss due to the COVID-19 pandemic.
They will take up the item on Tuesday after 80 restaurants having applied to date, funds remain to assist additional restaurants; however, based on experience so far, there are some changes to existing guidelines and criteria that would increase the pool of eligible restaurants.
Staff recommends approving changes to the Restaurant Grant Program as follows:
- Accept alternative financial documentation of need to include submission of either (a) Q3 2019 and Q3 2020 Profit and Loss Statements or (b) Full 2019 and 2020 Annual Profit and Loss Statements; and
- Establish a new level of grants (Tier 2) for businesses with 10-24% loss of total revenue at the grant amount of $5,000 (full service) or $2,500 (bars and quick serve).
According to the Staff Report:
To date, 80 businesses have applied for the Restaurant Grant Program. 24 of these applications have been approved with checks issued or in the process of being issued. Over 30% are needing to re-apply due to the submission of incomplete information. 23 restaurants have been disqualified for not meeting program criteria. Two main reasons for disqualification are emerging: (1) the largest revenue loss for the restaurant did not occur in the fourth quarter of 2020, and (2) the restaurant did experience a loss in revenue but did not meet the 25% minimum
In an effort to help more businesses get assistance, the Rebound AdHoc Committee recommends modifying the existing Restaurant Grant Program in the following ways:
- Accept two additional methods to document a loss in total revenues. For those who experienced a larger loss in Q3 2020, they could submit their Q3 PNL information for both 2019 and 2020. Alternatively, businesses could elect to provide full year PNL information for all of 2019 and 2020. Staff estimates another 15-20% of businesses could qualify under these new financial criteria.
- Create a new “Tier 2” where businesses that experienced a loss in total revenue between 10-24% could qualify for a smaller grant amount. All other program criteria would remain the same as for the original grant amounts. The new proposed grant amounts would be half of the amount for businesses who meet the original 25% criteria. For full service restaurants, the proposed grant amount is $5,000 and for bars, delis and quick service restaurants, the amount would be $2,500. Staff estimates another 25% of restaurants could qualify.
With the current 80 applications under existing program guidelines, it appears close to $600,000 of the $1,000,000 will be granted. The remaining $400,000 should be sufficient to fund the proposed program changes.
If approved by Council, staff will review the resolution establishing the program to determine if any amendments are necessary, and present those amendments to Council, as necessary, at its March 16, 2021 meeting. In the meantime, if these changes are approved, staff will open the application period and begin processing applications with an intent to close the application period for the Restaurant Grant Program on March 31st.
Staff Report: Click here