An important aspect of the new stimulus package passed by Congress is Section 324 of the Additional Coronavirus Response and Relief Act entitled "Grants for Shuttered Venue Operators." Section 324 is intended to provide relief to live Venue Operators and promoters, theatrical producers, live performing arts organization operators, museum operators, motion picture theater operators and talent representatives (collectively "Venue Operators"). Incredibly, while the earlier versions of the stimulus package provided for $10 billion in relief for Venue Operators, the final version provided for $15 billion in relief for this group.
Under Section 324, Venue Operators can apply for non-repayable, two-part grants that cover up to 45 percent of a Venue Operator's 2019 revenue, capped at $10 million in the first round of grants, which is followed by a supplemental grant in spring 2021 that can be valued up to 50 percent of the original grant. The general requirements to qualify for the two-part grants are that the applicant must have been in business on February 29, 2020, and must show 2020 revenue decline by at least 25 percent. Importantly, the funds for the first part of the grant will become available quickly, with priority given to Venue Operators that experienced revenue losses in 2020 in the range of 70 to 90 percent.
For an operator to qualify as a Venue Operator for purposes of relief, the operator must have mixing equipment as well as a public address system and lighting rig. Further, the operator must sell paid tickets or have a cover charge "to attend most performances" so that "artists are paid fairly and do not play for free or solely for tips except fundraisers or similar charitable events."
Venue Operators that receive grant funds may use the funds for payroll costs, rent obligations, utility payments, mortgage obligations, the payment of principal and interest on debt incurred prior to February 15, 2020, covered worker protection expenditures, payments to independent contractors, and ordinary and necessary business expenses. Any applicant receiving the grant funds will be required to maintain four years of employment records after receiving the funds and three years of all business records.
There are additional aspects of the stimulus package that might apply to specific Venue Operators that can be discussed with a Much attorney on an individual basis. Please contact your Much attorney to discuss if you have any questions as to how the stimulus package impacts your specific business.