To address the entertainment venues severely impacted by COVID-19 related closures this past year, the Consolidated Appropriations Act, 2021 included $15 billion in grants for “Shuttered Venues.” But, who qualifies?
Qualified Entities
The Shuttered Venue grants will be available to music or theatre venues, entertainment businesses, arts and cultural organizations, non-profit museums, and movie theatre operators. The Act, however, specifically excludes live performances of a “prurient sexual nature” and performances deriving more than a de minimis gross revenue from the sale of products or services that are of a “prurient sexual nature.”
Ineligible
The Act further provides the following entities are ineligible for Shuttered Venue grants
- entities owned or controlled by a business listed on the national securities exchange
- entities gross revenues from federal funding in 2019 exceeded 10%, and
- entities for which two or more of the following apply: (i) owns or operates businesses in more than one country, (ii) owns or operates businesses in more than 10 states, (iii) employs more than 500 employees as of February 29, 2020, or (iv) entities that received a PPP loan on or after December 27, 2020 (entertainment venues must pick between the “Shuttered Venue” grant and a second round of PPP funding)
Requirements
To qualify for a Shuttered Venue grant, the entity:
(1) must have been fully operational on or before February 29, 2020, and
(2) had gross earned revenue during one quarter in 2020 demonstrating a 25% reduction in gross earned revenue during the same quarter in 2019.
Three-Tier Distribution Priority:
First Priority grants are designed for entities whose revenue declined 90% or more from April 1, 2020 to December 31, 2020 compared to the same time period in 2019; First Priority grants will be distributed during the initial fourteen days of the program.
Second priority grants are designed for entities whose revenue declined 70% or more from April 1, 2020 to December 31, 2020 compared to the same period in 2019 and will be distributed the third and fourth week of the program.
Third priority grants are general grants that will be distributed to any eligible entity.
Grant Amount
The Shuttered Venue grants will be capped at 10 million.
The first round of grants, for entities in operation on January 1, 2019, will be equal to 45% of the gross earned revenue during 2019. For entities who began operations after January 1, 2019, the grants will be equal to six times the entity’s average monthly gross earned revenue for each full month of 2019 for which the entity was in operation.
A second round of grants will be available to entities that received grants in the first round. The second round of grants will begin April 1, 2021 and are designated for entities whose revenue for the first quarter of 2021 does not exceed 30% of the revenue for the first quarter of 2019. The supplemental grant shall be 50% of the initial grant.
Uses for the Grants
The Shuttered Venue grants may be used for payroll costs, covered rent obligations, covered utility payments, covered worker protection expenditures, interest payments on covered mortgages/debts incurred prior to February 15, 2020, payments to independent contractors, and other ordinary and necessary business expenses.
Qualified entities should contact their lender to determine if they are participated and work with their Attorney’s and CPA’s to submit an application.
