According to a new set of data released by the Small Business Administration, the highly acclaimed California restaurant, The French Laundry, received more than $2.4 million in tax-payer funded loans through the Paycheck Protection Program. This is 18 times more than what the average Bay Area restaurant received.
The 3-Michelin-star restaurant in Napa Valley has been the site of recent controversy after California’s Democratic Gov. Newsom attended a 12-person dinner party there, essentially violating his own coronavirus lockdown rules. San Francisco Mayor London Breed was also spotted there during a COVID-19 surge. “Do as I say not as I do,” right?
The posh restaurant, opened by celebrity chef Thomas Keller, offers an outdoor dining experience starting at $450 per person and dinners priced as high as $1,200, according to online reservation services. The French Laundry received a $2.24 million loan used to keep 163 employees on payroll and a second loan on the same day for $194,656 to retain five employees.
The reports prompted a backlash from business owners, such as Dennis Berkowitz, who struggled to receive a $318,000 loan to retain 50 employees. The loan could not keep his restaurant, San Mateo Restaurant Vault 164, afloat and he was forced to sell in July.
“That’s a lot of money. But, what can I do about it? I’ve had a 40-year run in the restaurant business, so I consider myself fortunate. I really feel bad for the next generation of restaurateurs because they’re screwed,” Berkowitz said.
Reports also revealed that bigger businesses got access to loans before small business owners. 91% of restaurants with 300+ employees got their loans approved in April, versus only 52% of restaurants with 100 or fewer employees. Larger businesses benefited from having their accountants help with the loan application while small mom and pop owners didn’t have in-house financial help.
At least five restaurants and bars, four Napa Valley wineries, a ski resort, and retail establishments were connected to Gov. Newsom and received millions of dollars through the PPP Program. The SBA requires that companies spend at least 60% of the loan money on wages.
Sean Moulton, a senior policy analyst with the nonpartisan Project on Government Oversight, pointed out that it is unexpected for a company with few employees to receive nearly a million dollars. He said that President Trump’s purpose behind the PPP Program was to save entry-level jobs and to stop unemployment.
“It seems to be a small business but it has a lot of money. I’m not sure how the company justifies taking that much money when there are a lot of companies looking to get assistance. You hope they’re using it wisely because there’s an opportunity cost there — that money didn’t get used for another small business that may be out of business now,” Moulton said.
Moulton suggested that Gov. Newsom gave special treatment to the restaurants and businesses he had invested in. This is hardly surprising since the elite Democrats live by a completely different set of rules than the vast majority of Americans.
There is far too little accountability in what Gov. Newsom is doing to small businesses. The government has lost all credibility at this point while the radical left continues to take advantage of an economic crisis for a couple of bucks.