[co-author: Perry Laub]
The restaurant industry has been among the hardest hit by the COVID-19 pandemic. The National Restaurant Association reported in its 2021 State of the Restaurant Industry that, as of December 1, 2020, more than 110,000 eating and drinking places had closed for business either temporarily or permanently since the pandemic’s start. Industry-wide, 2020 saw a decline of $240 billion in total sales relative to preCOVID-19 pandemic forecasts and a decline in nearly 2.5 million jobs from pre-COVID-19 pandemic levels. In New York alone, a survey conducted by the New York State Restaurant Association in early December 2020 revealed that 54% of New York restaurateurs predicted that they would be forced to shutter in the next six months absent additional federal relief.
On March 11, 2021, President Biden signed the American Rescue Plan Act (the “ARPA”) into law. Section 5003 (Support for Restaurants) of the ARPA appropriates $28.6 billion for a new Restaurant Revitalization Fund from which the Small Business Administration (the “SBA”) will oversee grants to eligible food service providers. This program is aimed at providing critical additional support to the nation’s restaurants and other food service providers to give them a chance to survive the remainder of the pandemic. This alert describes the key terms of the Restaurant Revitalization Grant Program established by the ARPA. As with all other SBA administered COVID-19 relief programs, many of the details of this new program’s launch and administration are expected to be dealt with through SBA rulemaking processes.
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