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House OKs $186M For COVID Impacted Businesses

February 1, 2022

Gyms, movie theaters, bars and the industries most impacted by COVID-era restrictions would get a chunk of federal COVID-19 relief dollars under a $186.1 million spending plan that passed the House overwhelmingly Thursday.

HB 5524, sponsored by House Appropriations Committee Chair Thomas Albert (R-Lowell), also gives liquor license and occupational code fee relief for businesses that paid the government for a license to operation, only to have government restrict their ability to do business.

“If we simply let these employers go without help, we will lose more business and jobs are central to our communities,” Albert said.

As part of the measure, gyms and fitness centers are getting $53 million. Convention and visitor bureaus are getting $30 million, movie theaters $18 million and bars $10 million to cover server training costs.

Another $9 million in Liquor Control Commission fees are being waived. A total of $17.7 million in occupational code fees and $8.9 million in health occupation license fees are being credited and prorated.

The Democrats’ lead on Appropriations, Rep. Joe Tate (D-Detroit), was able to snag $25 million for Community Development Financial Institutions (CDFI), which tend to invest in business and real estate projects in areas like Detroit, where traditional financing is difficult to obtain.

“Funding CDFIs will go a long way in assisting Michigan’s economic recovery,” Tate said. “I am optimistic that we can get this crucial funding for the Michiganders and small businesses that need financial support across the finish line.”

The House passed the bill 96-6 with Reps. Steve Carra (R-Three Rivers), Steven Johnson (R-Wayland Twp.), Cynthia A. Johnson (D-Detroit), Yousef Rabhi (D-Ann Arbor), John Reilly (R-Oakland) and Tenisha Yancey (D-Detroit) voting no.

Said Steven Johnson after the vote to MIRS, “It would be better if we just did a tax cut for everyone at this point.”

Rabhi said he felt it was wrong that the state was taking care of venues when musicians, performers and artists have been suffering as bad, or worse. His no vote was an objection to leaving these struggling individuals “out in the cold.” Also, a portion of the bill stopped Detroit venues from applying for the money. Rabhi called that provision “exclusionary” and didn’t belong in the bill.

The bill – which has not been negotiated up to this point with the Senate and Governor — comes after business officials told the House Appropriations Committee about how the Governor’s shutdowns to prevent COVID-19 spread crippled their respective industries.

Bars and restaurants lost roughly a third of their workforce during the shutdowns, said Scott Ellis, executive director of the Michigan Licensed Beverage Association. With revenues down 38%, it’s difficult for his members to cover the three-year training courses new servers are sent to for health and safety lessons.

At the Detroit Metro Convention & Visitors Bureau, 70% of staff was laid off during the height of the pandemic, and it wasn’t alone.

The tourism industry in Grand Rapids went from 10 consecutive years of record-setting business to the “floor dropping out,” said Doug Small, president and CEO of Experience Grand Rapids.

Three properties in the Grand Rapids area closed for a few months. Roughly 3,000 restaurants closed.

“We want to get these people back to work,” Small said.

Alyssa Tushman said she went from having three fitness centers to one fitness center and two landlords coming after her with lawsuits. Of the 1,100 gyms in Michigan as of February 2020, 30% are closed for good. The percentage seems to be growing, not shrinking.

“This industry is a mess,” Tushman said. “And this industry needs to stay because we need to help the health care delivery system to take care of people.”

Corey Jacobsen, the chief financial officer of Phoenix Theaters, noted that they were shut down during most of 2020. Even when they were back open, they couldn’t sell popcorn, which is a “profit center” for them.

Now, after businesses started picking back up in 2021, omicron has come back to hit the traffic coming into movie theaters.

“A grant program is more important than it was six months ago,” he said.

Scott Hammontree, president of the Michigan Independent Venue and Promoter Association, said concert venues lost 90% of their revenue after being closed for 15 months and are now facing more challenges.

Live music venues did receive $3.5 million in grants, which was a lifeline that helped keep their doors open. However, Hammontree said, independent venues took on significant debt and are having trouble getting back on their feet.

“It will be nine to 12 months, at best, before revenues will begin to stabilize for these smaller live venues. For many venues and promoters, a return to normal won’t happen, at best, until the end of the year,” said Chris Meyer, co-founder of Meyer Entertainment Group.

Thursday, Democrats offered four amendments that were defeated.

– Rep. Nate Shannon (D-Sterling Heights) wanted a $1 billion investment into “hero pay” for frontline workers

– Rep. Rachel Hood (D-Grand Rapids) wanted $150 million into affordable housing

– Rep. Julie Rogers (D-Kalamazoo) waned $10 million for museums and $5 million for artists

– Rep. Jim Haadsma (D-Battle Creek) asked for a wording change to the bill to make sure YMCAs and other nonprofit gyms are eligible for the health center grants.

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