Businesses' requests far outweigh $242 million state relief package

Urban Growler was teetering toward closure when the state check for $25,000 arrived, helping the St. Paul brewery pull through the bleakest winter months.

"It was a big deal, because we were receiving no aid from the federal government," Deb Loch, master brewer at Urban Growler, said of the assistance. "Our sales are terrible, we're down between 60 and 70% from December through February. This is brutal. Those winter months, we just have to survive."

Minnesota is in the midst of distributing dollars from a $242 million aid package for businesses and nonprofits affected by lost sales and state restrictions during the COVID-19 pandemic. But county officials, who have less than two weeks remaining to give out the largest chunk of the money — $114.8 million — say requests from businesses and nonprofits far outweigh what they have been able to provide.

Near the Canadian border, golf courses and gas stations are hoping to make the cut Thursday when Kittson County chooses from 49 applicants for state grants. County Administrator Dillon Hayes said people asked for a total of $750,000, but they only have about a third of that to give out.

In Stevens County in western Minnesota, 44 businesses applied for help. Twenty-two got money. Washington County culled 430 grant recipients from 613 applicants, giving smaller-than-anticipated sums to stretch the dollars.

The Legislature approved the relief package in mid-December, when the state was in the middle of a nearly two-month shutdown for bars, restaurants and entertainment venues. At that point, there had been a drought in federal aid. Two weeks later, Congress passed a $900 billion bill that included another round of Paycheck Protection Program loans to small businesses. And now the U.S. Senate is preparing to move forward with a version of President Joe Biden's $1.9 trillion relief proposal, which would include billions in business grants and loans.

Whether another round of state aid is needed depends on the virus, the rollout of vaccines and what the federal government approves, said Steve Grove, commissioner of the Department of Employment and Economic Development (DEED). He said massive aid programs should be the territory of the federal government.

"We knew that we would never have a program at the state level that was sufficient to meet the needs, or even close to the needs, of our businesses," Grove said. "But at the same time we knew we needed to do every possible thing we could. In a crisis, you search every couch cushion for every penny."

State leaders are closely watching the federal relief bill as they develop Minnesota's next budget, Grove said. The version passed by the U.S. House includes $350 billion for state and local governments. Grove said the state and counties are already talking about how to get out that money quickly.

"We'll want to make sure what we pass out of this [legislative] session complements that, instead of duplicates it," he said. However, he noted the financial pain in the hospitality and entertainment industries is so deep that both federal and state funding have been necessary.

As the relief bill debate continues in Washington, Minnesota business owners said those state dollars are filling financial gaps at a particularly challenging time.

The money started landing in bank accounts following Gov. Tim Walz's shutdown order and a disappointing holiday season for many businesses. Some owners were also hit by annual municipal fees and license payments due around the start of the year.

Urban Growler was at bare bones staffing, down from 50 workers to around 20, Loch said. They turned down the heat to save money and stopped trash collection, calling to have someone pick it up only when it was full.

Loch was applying "for every grant I can see," but said the $25,000 from the state COVID relief package showed up unannounced. She had qualified for a subset of the state relief bill aimed at restaurants, bars, gyms and bowling centers. That $88 million portion of the package gave money to certain businesses that had to temporarily close or reduce activity in November through January as the state clamped down on their operations to prevent the spread of the coronavirus.

More than three-quarters of that funding, $67.3 million, had been mailed to 3,891 businesses as of Feb. 2, according to the most recent data from the Department of Revenue. The vast majority of the grants went to restaurants and bars.

John Park, owner of the bar and restaurant Burrito Loco in Minneapolis, said he eagerly watched the news about the Legislature's passage of the $242 million package but found it difficult to figure out how to apply or whether he qualified. He did end up getting $15,000 of the state aid through Hennepin County. Minnesota's biggest county got $25.3 million from the $114.8 million portion of the state relief package, which counties were able to distribute among businesses as they saw fit, within certain parameters.

Park said he put almost all of the $15,000 toward making sure employees were paid. He hopes the state continues to lift business restrictions. "Another shutdown would probably kill us," he said. "We're chasing our bills from the first shutdown."

Another component of the state relief package was $14 million for movie theaters and convention centers. DEED data show $13 million of that has been given out so far, ranging from $15,000 for the Roso Theater, a movie theater in Roseau, to $500,000 each for large convention centers.

Independently owned movie theaters and entertainment venues got $15 billion in the December federal package. Big chains were not eligible for that aid but got a slice of the state dollars. Eight AMC movie theaters in the Twin Cities suburbs and Mankato got a combined $1.1 million.

"Every dollar raised is critical to AMC's survival during these Coronavirus-impacted times," AMC spokesman Ryan Noonan said in a statement.

In Morris, C.J. Fromm predicted his Fire Side restaurant and Met Lounge bar and grill could have survived without the $27,000 they got in state aid. But the small businesses he and his wife run would have been struggling with delayed bills for months. The father of two said they have gone from working 40 to 50 hours a week to 70 hours. And for the last year, he has not put a dollar in his retirement account or his kids' college savings accounts.

Every day they spend an hour sanitizing the businesses, Fromm said. His top priority for state leaders is not additional aid but building s confidence that patrons can safely return to restaurants and bars.

"We're moving in the right direction," he said. "I don't need any more aid, I don't think. But we need consumer confidence to come back. We need people feeling safe coming out to eat."

Jessie Van Berkel • 651-925-5044