Proposed RESTAURANTS Act could help Detroit's dining scene weather the coronavirus


  • Evan Gonzalez, Detroit Stock City

In this week's issue, we talked to Detroit restaurant and bar owners who said that the federal government's Paycheck Protection Program loans were particularly ill-suited for them. The loans' requirement to retain full staff for eight weeks doesn't make much sense when the coronavirus has forced all dine-in restaurants to close — and even when they are allowed to re-open, as Gov. Gretchen Whitmer has authorized in parts of Northern Michigan on Friday, they'll be operating at a lower capacity. Kuzzo's Chicken & Waffles owner Ron Bartell told us he wished the federal government would come up with a bailout specifically tailored for the industry.

That could soon happen. On Wednesday, Democratic Rep. Earl Blumenauer, of Oregon, announced the Real Economic Support That Acknowledges Unique Restaurant Assistance Needed to Survive Act, or the RESTAURANTS Act. The measure would create a $120 billion grant program that would give small restaurants cash to stay open through the rest of the year at a limited capacity.

Unlike the PPP, RESTAURANTS Act funds wouldn't need to be paid back. The funds would be available until the end of 2020, and would cover a restaurant’s difference between revenue from 2019 and the anticipated revenue through 2020, capped at $10 million. Unlike the PPP, the funds wouldn't need to be spent on payroll; they could be used for mortgage, rent, debts, or cleaning supplies. If a restaurant closed before the end of 2020, the remaining funds would have to be returned, and if the grant exceeded a restaurant’s actual revenue by the end of the year, it would be converted to a loan with a 10-year term at 1% interest.

Unlike PPP, which was used by some major corporations, the RESTAURANTS Act funds would not be offered to publicly traded companies or chains with more than 20 locations. The proposal also has a social-equity component: The first two rounds of funding would be reserved for restaurants making less than $1.5 million in revenue each year, with a focus on those owned or operated by women or people of color.

You can read the RESTAURANTS Act here.

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