As restaurants struggle with the catastrophic impact of Covid-19, thousands of establishments have turned to the Paycheck Protection Program (PPP) for relief. Among them are at least 10 of America’s 14 Michelin three-star restaurants, which collectively received up to $28 million of government-backed loans, according to data released by the Small Business Administration.
French Laundry Partners LP, Le Bernardin, Inc and Quince Pacific Avenue (which owns three-star Quince, Cotogna, Tusk Events and the wine bar Verjus) appear to be the largest three-star beneficiaries, with each taking up to $5 million from the SBA program. The world’s former No. 1-ranked restaurant Eleven Madison Park (operating under the legal name Birth of the Cool LLC) does not appear to have received PPP funds.
On Monday, the government released the names of roughly 650,000 businesses that received between $150,000 and $10 million of forgivable loans administered through the PPP. The vast majority of the 4.9 million loans issued fell below the $150,000 threshold for disclosing businesses identity. But for those above that mark, there’s a spreadsheet available to see the approximate size of loans taken out, along with the self-reported number of jobs saved because of the money provided.
Restaurants at all levels, from independents to franchises, have participated in the program, with large chains taking advantage of a loophole that allowed individual locations with less than 500 employees to apply for relief, even if the entire company exceeded that staffing limit. So, McDonald’s, Taco Bell and Little Caesars franchisees around the country have received funds from the program. Plenty of fine-dining restaurants accepted money, too. Daniel Boulud’s Dinex was granted up to $10 million, LA’s Michelin two-star Providence up to $1 million, and Nobuyuki Matsuhisa and Robert De Niro’s Nobu applied for loans for 14 of its locations, receiving up to $28 million in total.
As for the remaining Michelin three-star restaurants, Alinea Restaurant LLC and The Inn at LW, LLC (The Inn and Little Washington) each took up to $2 million. And 431 Food Market Corp (Chef’s Table at Brooklyn Fare), Atelier 123 Restaurant (Atelier Crenn), Barca Partners, LLC (Manresa), Masa NY LLC and ST Hospitality Group, LLC (SingleThread) each received up to $1 million. Corey Lee of Benu in San Francisco has said he was boosted by PPP funds, but his loan did not appear in the disclosed data.
These low-interest SBA loans may be forgiven by the Treasury Department if businesses meet certain conditions laid out in the CARES Act. Those conditions include spending a majority of the money on paying employees, to effectively ease the burden on state unemployment funds. In June, Congress passed a modification to the program, giving small businesses until the end of the year to spend the loan money, rather than the original eight weeks stipulated in CARES. The modification also lowered the amount of money businesses are required to use on staff; establishments must now apply 60 percent of the loan money to payroll, down from 75 percent.
Early on, the PPP faced heavy criticism because the first tranche of money ran out quickly before Congress approved an additional $320 billion. And firms like Shake Shack and Ruth’s Chris Steakhouse revealed they had received millions of dollars intended for small businesses. Amid public pressure, and the Treasury Dept. threatening to not forgive the loans, both of those companies returned the money.
Through June 30, $521 billion of the $669 billion Congress approved for the program has been dispersed. Just last week Congress extended the deadline for businesses to apply for the remaining cash.