A study of the distribution of over $28 billion in aid to restaurants through the Restaurant Revitalization Plan (RRF) showed states with Democrat leadership received significantly more money that those led by Republicans, with California and New York taking the bulk and Florida receiving only a small fraction of the grants.
The RRF was established by the American Rescue Plan to provide critical relief for restaurants that experienced devastating closures and economic losses during the pandemic. Administered by the Small Business Administration, $28.6 billion was allocated in the fund to help keep restaurants afloat.
Robin Gagnon is a national restaurant business expert, with extensive insight into the financial challenges being felt throughout the industry. Gagnon, Co-Founder of We Sell Restaurants, analyzed the numbers in RRF Freedom of Information Act and discovered some eye-opening statistics.
Restaurant owners from Democratic districts received nearly 75 percent of the funds, with $7.1 billion going to Republican controlled district restaurants and $21.3 billion going to Democratic controlled district restaurants, nationally.
New York and California, both under Democratic control, received almost 33 percent of the funding allocated to the entire country. Restaurants in those two states collected a combined $9.4 billion of the total $28.6 billion from the entire RRF.
California received $5,722,048,522.23, a whopping 20.03 percent of all the federal grant money, followed by New York with $3,681,130,747.78 or 12.89 percent. Florida came in fourth behind Texas, but way behind dollar-wise. Florida received $1,341,890,277.46, just 4.7 percent of the total funds.
In Florida, it appears at first glance that the dollars were evenly divided between Republican and Democrat Congressional Districts. Forty-seven percent of the restaurants in Democratic districts received money compared to 53 percent in Republican Districts. But those restaurants in the Democratic districts received more dollars each than their counterparts in Republican Districts by more than 20 percent. In Democrat districts, 2692 restaurants received $699,908,726.87 or roughly $259,995 each. In Republican districts 3016 restaurants received $641,981,550.59, or roughly $212,858 each.
There could be many reasons for this other than any political bias by the Biden Administration’s Small Business Association.
“The Small Business Association seemed to clearly favor Democratic districts over Republican areas,” said Gagnon. “This could simply be a function of how much better restaurants in red states fared during the pandemic. With less stringent lockdown measures, they were able to retain more sales volume, leading to less need for the Restaurant Revitalization Funds. However, the disparity between these two groups was striking.”
The Florida Restaurant and Lodging Association President and CEO Carol Dover found the correlations interesting too but said she really couldn’t say if it was politically motivated.
Seemingly disproving that conspiracy is FL-27, the Florida congressional district to receive the most money. The Miami/Miami Beach district is represented by Republican Maria Elvira Salazar. FL-27 received 0.48 percent of the Florida money with 365 restaurants splitting $135,918,984.02. Her area is reportedly 72.7 percent Hispanic and a large tourist area hit hard by pandemic closures, criteria favored by the SBA.
Regardless of the cause, many, many restaurants received nothing.
Gagnon said less than one-third of applicants, nationally, were approved for grants.
She said a total of 100,650 restaurants received funding. Awards ranged from a low of $1,000 to a high of $10 million. Lucky Strike, off West Broadway in NY and Alexander’s Steak House with several locations in California each received close to $10 million. Across the country, more than 250,000 restaurants applied for relief and did not receive anything.
In Florida, 5708 restaurants received grants, but 11,500 were left out.
“There was too much money in the hands of too few people. The federal government could have helped so many more people with operating expenses with that money,” Gagnon said.
Dover explained there was overwhelming need, “The $28.6 billion was gone before you could blink. It tells you how many people are desperately in need of the money when you can blow through $28 million that fast and leave that many companies hanging. There was more than they ever anticipated being filed for and they got caught short.”
She said a Tallahassee restaurant located in the shadow of the state capitol, Andrews Downtown, had its application in for grant money within 40 minutes of applications being received and did not receive any of the $1 million it was seeking.
“We know over $68 billion didn’t get funded. Somebody’s gonna be left out. We know there’s never gonna be enough for everybody,” Dover stated.
“But we are continuing to fight the fight. We will continue to work hard to try to get additional funding for those who did get left behind,” she vowed.
FRLA is currently seeking $60 billion in replenishment funds from the U.S. government for restaurants across the country.
Dover is not overly optimistic that expenditure will be approved but promises not to stop fighting. “The restaurant industry is an economic engine, not just of our state, of most states and they need help.”
Gagnon is pessimistic and believes Congress “will not have an appetite to do it again.”