Arkansas Studio Theater Denied Covid Relief Grant

Studio theater in Little Rock, Arkansas

Jennifer Schlesinger | CNBC

After months of uncertainty and mounting debt, the Studio Theater in Little Rock, Arkansas, received good news from the Small Business Administration in early February. A small non-profit theater has canceled its denial of assistance under the Indoor Operators Grant Program.

The SVOG program is a $16 billion fund that was created to support the live entertainment and arts industry in the face of severe losses due to the pandemic. While the program has helped many, it has also sparked outrage from businesses who feel they are entitled to help but have been unfairly denied.

The studio theater featured in a CNBC investigation in early January. The theater was closed in March 2020 due to the pandemic and did not fully reopen for a year. He is facing debts accumulated from rent, insurance and more. The theater stated that in July 2021 the SBA initially denied it a grant because it does not pay its performers. But as a non-profit organization, under the agency’s own rules, that shouldn’t have made the theater unacceptable, a CNBC report pointed out. In a subsequent review, the Studio Theatre’s initial refusal was upheld in August 2021.

On February 4, the theater was informed via email that it was due to submit an updated budget to the SBA, and was notified through the SBA SVOG portal that its appeal had been approved by the agency, much to Treasurer Amanda Kennedy’s surprise. Now the theater is just waiting for funding. She was expected to be eligible for a grant of around $135,000, and between the original and additional grant, this is about what she expects to receive.

After a year of this roller coaster for this to happen, I was just overwhelmed. The dam broke. … And then there is the sheer delight of knowing that it has come to fruition after so many hours of tears and hard work,” Kennedy said.

According to Kennedy, the theater considered suing prior to the event.

More than two dozen lawsuits have been filed against the agency by companies that believe they were wrongly denied assistance under the SVOG. A person familiar with the federal grants process and not authorized to speak to the press said that while grant applications are reviewed by individuals adhering to standardized criteria, individual application reviewers may use different thresholds or different interpretations of data when reviewing applications, programmatic or financial review processes. . Each of them can affect the stage of awarding a grant, which, in turn, can lead to false denials. It is SBA policy not to comment on individual statements or pending lawsuits.

More than 12,000 initial and additional grants have been funded, worth more than $13.6 billion. But according to SBA figures as of December 2021, more than 4,500 applicants have been rejected.

In December, the agency told CNBC that it had invited more than 5,000 applicants to appeal SVOG rejection decisions, such as the Kennedy decision, and about 3,000 businesses have accepted the decision. The SBA also invited about 2,000 grant recipients to review the amount of their grants, and about 800 grant recipients accepted the offer. However, the agency did not specify how many applicants were upheld the previous decision or how many were provided with additional funding.

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