Earlier this month, the RESTAURANTS Act, which would dedicate $120 billion to restaurant relief, was reintroduced in Congress by a bipartisan group of senators, as reported by Restaurant365. The bill is a follow-up to the RESTAURANTS Act of 2020 that was introduced last June, which passed in the House of Representatives last October and was never voted on by the Senate. The bill would allow restaurants and other food service businesses with fewer than 20 units to apply for up to $10 million to help cover COVID-19-related expenses dating back to Feb. 15, 2020 and to proactively cover expenses for up to eight months after the bill takes effect.
Also based on the RESTAURANTS Act of 2020 is the Restaurant Rescue Plan, which sets aside $25 billion for restaurants impacted by the pandemic as part of the Biden administration’s $1.9 trillion American Rescue Plan stimulus package, according to JD Supra. After being approved by a decisive 90-10 majority in the Senate, the plan will face a House of Representatives vote this week, according to Restaurant Hospitality. Under this bill, food and beverage service businesses that are not publicly traded and that — like those specified in the RESTAURANTS Act — have fewer than 20 locations would be eligible to apply for grants. These grants allot up to $5 million in relief for an individual restaurant or $10 million for a restaurant group.
In the lead-up to this week’s vote, Senate Majority Leader Chuck Schumer praised the $25 billion Restaurant Rescue Plan to a New York City audience, reported the New York Post. He described the proposal as “very flexible and very tailored to what the restaurants need,” specifying that restaurants could use these grants to provide protective equipment, make rent, cover insurance costs or pay their employees. “Our restaurants are in trouble,” he added. “Thousands more will close if we don’t get them aid … they’re one of the backbones of our economy, and along with our stages and our arts areas, they are suffering the most.”
Though the magnitude of the Restaurant Rescue Plan is smaller than the RESTAURANTS Act of 2021, it offers a more immediate possibility — and, given the amendment’s success in the Senate, perhaps a more probable one.
“By proposing a grant program for the industry, Congress is doing everything they can to ensure independent restaurants and bars can continue to employ 11 million people,” the Independent Restaurant Coalition said in a statement praising the amendment. “This has been a dark winter for restaurants and bars, who are seeing more layoffs and closures than any other industry throughout the pandemic. Millions of people depend on neighborhood restaurants and bars for their livelihood, and a full economic recovery depends on putting them back to work.”
The amendment’s positive effects extend beyond just restaurant owners and their employees. Commercial real estate investors with “a heavy dose of local tenants in their portfolios” could enjoy a boost from this bill, explains Millionacres, adding that “it’s also happy news for all those other investors, big and small, who have a financial stake in these businesses.” After all, even though real estate investment trusts will not be eligible for these grants, many of their tenants will. Other possible beneficiaries include tech companies whose revenue comes in part from food service clients, food and beverage suppliers, and many others.
These relief funds would provide a much-needed lifeline to many struggling businesses. The pandemic has been costing restaurants hundreds of billions of dollars, and the industry has been plagued by closures and layoffs. The National Restaurant Association, which represents over 500,000 restaurant businesses, has thrown its support behind the $120 billion RESTAURANTS Act, stating that “the foodservice industry is the nation’s second-largest private sector employer and has an economic impact of more than $2.5 trillion dollars annually. To once again be the engine that the economy relies on, our members need the help that only the RESTAURANTS Act can provide.”
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