Lawsuit halts hope for emergency COVID-19 funding

OCEAN CITY, Md. – When the COVID-19 pandemic began, many business owners were left with a choice: Shut down and wait out the storm to avoid garnering too much debt – or stay open to keep supporting their employees and rack up the bills. Owner of Mother’s Cantina Neely James says she went with the latter. She says that’s because her staff is more than just that; they’re family. “I did the right thing. I made the right choices,” said James. “We had about $1 million in losses during COVID. About $300,000 was absorbed by PPP loans. But that still put us $700,000 in debt.”

James says the Small Business Administration’s Restaurant Revitalization fund was a sort of light at the end of the tunnel. She applied for that $700,000 in funding during a priority application period. The period allowed women, minority, and veteran owned business to apply before everyone else. “I applied as a priority applicant. So that means, as a woman and a veteran, I was able to apply 20 days prior to the application opening to the rest of the restaurant owner community,” said James.

But that funding is now stuck at a stand still because of a lawsuit filed by a group of white male business owners in Tennessee and Texas. That group claims they’re being discriminated against because they were not able to apply early. James says she understands their frustration, but its now put her, and many others, at a disadvantage. “I understand the frustration from that side. But the response has then thrown that equitable distribution back towards the other end of the spectrum,” said James. “Knowing that I was given an opportunity to be funded in an equitable way, and then pulling that out from under strictly women, veterans, and minorities – I do then, personally, feel discriminated against.”

James says that funding isn’t so much needed to keep the lights on as tourist season ramps up in Ocean City. She says it would more so help her to pay off the debt she accumulated during COVID-19. “We can maintain the business right now with this tourist population. What we can’t do is allocate that money to debt,” said James. It prevents me from giving my managers raises, which they might deserve. It will delay my ultimate retirement, which I had planned on in about 7 to 10 years. it pushes it out to potentially 15 to 20 years.”

James says as time and money runs out, so is opportunity to financially recover from COVID-19. “My application has been pushed to the end of the funding line, and $69 billion have been requested by the restaurant industry. Only $29 billion is available,” said James.

That’s why James says she’s been working with U.S. Senator Chris Van Hollen to find a way to secure a share of the emergency funding. Sen. Van Hollen tells 47ABC, as the lawsuit keeps things on pause, there’s still a lot of work to do to support small businesses like Mother’s Cantina. “It’s crucial to not only ensuring our local restaurants keep their doors open, but to help them sustain their businesses and build back our economy stronger overall,” wrote Sen. Van Hollen in a statement. The senator continued, “I’ll be pressing the Senate to take up the Restaurant Revitalization Fund Replenishment Act, and I’ll continue working to make sure restaurants across Maryland receive the resources they need to get back on their feet.”

The Ocean City Hotel Motel Restaurant Association says Jones isn’t the only business owner still reeling with the impact of COVID-19. The organization tells 47ABC they’re working with other businesses who are desperately hoping for more funding. “Restaurants operate on a really thin margin. So, there’s not a lot of opportunity to go one way or the other. You’re either going to go off the cliff or you’re going to stay on the mountain,” said Executive Director Susan Jones.

Meanwhile at Mother’s Cantina, Neely Jones says she isn’t anticipating having to close her doors for good. But she says those thin margins have only gotten thinner as the pandemic continues. “We have worked so hard to stay open, strictly to employ our staff, strictly to pay salaries to our management and maintain their employment through COVID,” said James. “There’s no way that a restaurant, that works on cash flow and narrow margins, can make up for those kind of losses.”

Categories: Business, Coronavirus, Local News, Maryland, Money