Published in Small Business
Like many music venues, the Pyramid Scheme in downtown Grand Rapids is waiting for federal grants approved last year to start flowing to businesses. Like many music venues, the Pyramid Scheme in downtown Grand Rapids is waiting for federal grants approved last year to start flowing to businesses. MIBIZ FILE PHOTO

Music venue operators in a ‘holding pattern,’ awaiting relief and loosened restrictions

BY Sunday, March 14, 2021 05:00pm

Venue owners celebrated in late December when the $900 billion federal stimulus package was passed and included $15 billion earmarked for live venues. But more than two months have passed and funding applications still haven’t been released, pending guidance from federal officials.

The Shuttered Venue Operators grant program included in the federal spending package was signed into law after about eight months of advocacy through the Save Our Stages initiative led by the National Independent Venue Association. Virtually no events with crowds have taken place at live venues for a year now, leaving owners with no choice but to apply for relief grants and weather the pandemic, or shut down for good. 

“We’re in a holding pattern. The (state) restrictions that were lifted last week don’t lead us to opening back up,” said Scott Hammontree, general manager and talent buyer at The Intersection in Grand Rapids. State officials lifted some capacity restrictions this month for some event venues, but not those that offer food and drink or live entertainment. 

The hardest part about the pandemic has been the inability to plan for anything, said Michelle Hanks, who co-owns Seven Steps Up in Spring Lake with her husband, Gary Hanks. 

“We have a sign that needs to be replaced and nobody wants to finance a company that’s been shut down for a year,” Michelle Hanks said. “We have repairs and maintenance items that we desperately need to do but we can’t plan for it.”

Waiting on SBA

Hanks wants to be angry about how slow the process is going, but she also knows the U.S. Small Business Administration — which is responsible for administering the Shuttered Venue Operators funding — was not set up to distribute $15 billion worth of grants to help prop up a specific industry. The American Rescue Plan signed into law on March 11 includes another $1.25 billion in grants for venues.

“Everybody we talk to about why applications have not been released is that the SBA did not have the capacity to administer the funds, which to me is really frustrating because I don’t know why they didn’t think of that sooner in those months of advocacy,” said Tami VandenBerg, who co-owns Pyramid Scheme in downtown Grand Rapids. “My hope, and all of our hope, is that they can scale up the SBA and get these funds out.”

On March 11, the SBA announced that grant applications under the previous stimulus package would open early next month.

Even with the funding, it’s not clear which venues will survive and which will close for good: Some have more reserve funding than others, while some operators own their building, VandenBerg noted.

“There are many venue owners that are many months behind on rent and property owners are waiting to see what is happening with these funds before evicting people,” VandenBerg said. 

Meanwhile, funding is coming in from other sources. The state recently approved $3.5 million for Michigan entertainment establishments after advocacy from the Michigan Independent Venue and Promoter Association. The Michigan Economic Development Corp. approved funding for recipients, but MIVPA was intimately involved in the grant process, VandenBerg said. 

“The state funding was great, and will give venues a lot of breathing room,” Hammontree said. 

VandenBerg volunteered to be part of the process and told MiBiz on March 8 that about 400 venues applied for the grant funding, while about 100 were eligible. On March 9, Pyramid Scheme was awarded $40,000 through the state grant program. 

“Anything is better than nothing for us. But for a large venue, just opening the building is cost prohibitive because you need a certain amount of people to just open the building,” VandenBerg said. “The business can only succeed if we can get at least 400 people in the back (venue space at Pyramid Scheme) a couple times a week.”

‘We’re an ecosystem’

Additionally, the logistics of booking tours and talent to ensure profitability is complex for all parties involved, Hanks said.

“Our industry has to go online together,” Hanks said. “We’re an ecosystem. I’m dependent on that little venue in Texas to be open for artists to tour — that’s just as important as the venue in Lake Orion opening. Every venue needs to be online, artists need to have profitabile and healthy tours that can go on or they can’t and won’t tour regularly.”

She added that no other industry faces the same challenges as live entertainment venues, but Hanks hopes to start holding smaller, socially distanced events by the summer.

VandenBerg says shows have been booked and then “moved many times,” though events are now scheduled in October.

The booking industry started generating activity once again about three weeks ago, Hammontree said. He went from getting one to two booking emails a day to 20 to 30. 

“From the beginning we were prepared to weather this out — we didn’t know it would be 12 months, but we were committed to making it through,” Hammontree said. “We are eager to get back out once again.”

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