Glitches derail SBA pandemic-relief program for live music and theater venues

The Shuttered Venue Operators Grant, which would top out at $10 million apiece, is designed to help arts and entertainment businesses cover payroll, rent, utilities and other operating expenses after government restrictions on public gatherings cut off the howling crowds that serve as their lifeblood.

Arden Barnett, the owner of Duling Hall, a premier music venue in Jackson, Miss., has been unable to make rent for more than a year. He says he has lost count of how many shows he has canceled or postponed since his last performance sold out in March 2020. Like other music venue operators — which analysts estimate lost a collective $33 billion in 2020 — he had planned to apply as soon as the SBA portal opened April 8.

But almost immediately, the application site crashed, forcing the SBA to pull the system offline. “After

working with our vendors to address the issues, the portal was shut down to ensure fair and equal access once it is reopened,” the agency said in a Twitter post just hours after the launch.

“The day comes for our hallelujah moment and our landlord’s on cloud nine thinking he is going to get paid, and then, ‘Boom,’ ” Barnett said. “It was like a bad acid trip.”

The SBA said Friday that it will share an exact date in advance of the portal’s reopening to give applicants time to prepare.

As the agency works out the portal’s bugs, the owners and operators of theaters, live music venues and museums continue to wait. “I do wake up in the middle of the night because I feel bad that we have not been able to do what our responsibility is, which is to pay rent,” Barnett said. “But there is zero cash flow.”

Duling Hall’s revenue plunged 97 percent compared to 2019, closing in on several million dollars in lost sales. Back rent has piled up to more than $116,000. When the portal crashed, Barnett said, he sent his landlord a news article about the botched rollout. He said he hasn’t heard back.

“It’s been extremely stressful and financially frightening,” said Rob Mercurio, who’s been doubly hit as an artist and venue operator. Tipitina’s, a club he co-owns in New Orleans, saw 90 percent of its revenue dry up last year, he said.

He’s also a bassist with the funk band Galactic, which recorded a comparable decline. Like touring musicians, Mercurio said he worries that some of his favorite venues won’t be around once music halls fully reopen. But he’s been moved by the outpouring of donations and letters from people who love going to concerts.

“To see how much a nightclub means to people can be eye-opening and heartwarming,” he said.

Audrey Fix Schaefer, a spokeswoman for the National Independent Venue Association, a 3,000-member organization that helped lobby Congress for the rescue package, said her group has been assured by the White House that reopening the portal is a top priority at the SBA. “They’re working around-the-clock on rigorous stress testing and other improvements on the system,” she said. Still, she noted, some small businesses won’t be able to hold out much longer.

“Understandably, landlords can’t last forever. Eviction notices are coming. People are saying, ‘We can’t do this anymore,’ ” she said.

In a letter to be sent Monday, Sens. Amy Klobuchar (D-Minn.) and John Cornyn (R-Tex.), who led the passage of the arts legislation, urged the SBA to meet its goal of getting the program back online this week.

“With each passing day, more independent businesses are forced to shutter permanently or file for bankruptcy,” the senators wrote. “Landlords and banks are no longer permitting deferrals and are pressing for immediate payment of past due accounts; businesses are receiving eviction notices; mom-and-pop businesses are being forced to sell.”

“We are pushing the SBA to fix the issues ASAP,” said a spokesperson for Senate Majority Leader Charles E. Schumer (D-N.Y.), who also helped secure the arts funding. His state’s vibrant entertainment industry, which includes Broadway, was gutted by the pandemic. “The stages need help quickly.”

As states move to relax their restrictions on businesses and gatherings, consumers are clamoring for a return to live events. Demand for outdoor shows and festivals has exploded in the United States, matching and even surpassing pre-pandemic levels, according to Boris Patronoff, chief executive of See Tickets in North America, the ticketing services company.

“A lot of people have struggled, a lot of people have suffered, but the people still want to go to concerts; the consumer demand is driving that business,” he said, stressing that venue operators want to expand responsibly.

Barnett of Duling Hall said his schedule is booked two to five acts deep for multiple days a week through the summer.