How local businesses used the Paycheck Protection Program to keep their employees
FRISCO — The federal Paycheck Protection Program was equated to being as close to a “free lunch” as business people will ever experience by Swift Communications CEO Bill Waters, which owns the Summit Daily News. The program was meant to provide funds to struggling small businesses amid the COVID-19 shutdown by funding up to eight weeks of payroll costs and benefits. Funds were also able to be used to pay interest on mortgages, rent and utilities. While the program was technically a loan, if certain rules were followed, loans could be fully forgiven.
The Breckenridge Outdoor Education Center was one of the first organizations in Summit County to put a pause on operations due to the outbreak of the novel coronavirus, announcing program closures on March 13 — a day before Gov. Jared Polis ordered widespread closures of ski areas.
The program was conservative in what it applied for, and according to Executive Director Sonya Norris it received $150,000. The money was used to cover the payroll of its 11 full-time, year-round staff and prevented layoffs of core staff. About 20-25 seasonal ski instructors, however, were laid off when the program shut down. The nonprofit took funds out of its general operating budget to pay a severance to each of these instructors.
“We just felt that that was the right thing to do at that time,” Norris said, adding that at the time the team had no idea that the CARES Act would exist. “There was so much uncertainty then so that took a big chunk out of our operating budget at that point from general operations … and the PPP loan augmented that so then getting the PPP loan really helped us to then cover salaries that we had taken out of general funds for those instructors.”
Retaining core staff allowed the center to ramp up programming as soon as the program was able. For example, the nonprofit has partnered with Building Hope Summit County to aid the local teenager population. The education center is approaching opening this winter with some trepidation, but is working to put adequate precautions in place for the upcoming ski season. Norris said she isn’t sure if the nonprofit would apply for a second round of loans if it is offered, but she hopes that the first loan will be fully forgiven.
Dick Carleton, owner of Hearthstone Restaurant and Mi Casa Mexican Restaurant & Cantina, said the restaurants were lucky enough to get in on the first round of funding and were able to bring over 90 employees back onto payroll. According to the U.S. Treasury database, Hearthstone Restaurant Inc. received $150,000 to $350,000 to retain 30 jobs, and Mi Casa Inc. received $350,000 to $1 million, retaining 50 jobs. While the management team stayed on throughout the shutdown, other employees had to be furloughed in March.
“It kept them whole until June when we were able to reopen,” Carleton said of the funding that put employees back on the payroll. “It helped the workforce, the team, tremendously and it helped us a lot to help offset some of those expenses that don’t go away when you’re not open.”
Carleton noted that the restaurant was closed for three months, which is the longest he’s closed one of the restaurants in 39 years. As employees were brought back before the restaurants reopened, hourly employees underwent some training, which Carelton said was mostly to stay in touch with employees. The management team was also able to accomplish a few administrative projects.
“I wouldn’t have been able to pay everybody without that money and I suspect a lot of them would have had to leave town which would have really stunk,” Carleton said. “It would have been awful because they didn’t have a lot of options.”
Pure Kitchen General Manager Niall Jensen said the restaurant, which opened in December of 2018, was just getting into its groove when the shutdown hit. The restaurant received $150,000 to $350,000 in funding, retaining an estimated 29 jobs. Jensen said the paycheck program helped the restaurant keep most of its full-time staff while some employees moved away for personal reasons.
“It definitely allowed us to keep the staff that we worked a year on establishing and solidifying,” Jensen said.
Jensen said the loan went fully to paychecks and that without it the restaurant could have lost some — if not all — of its employees. He said that while the restaurant sees mostly tourists these days, he is thankful for the local community that came out to support Pure Kitchen with takeout orders during the shutdown.
Peak 8 Properties LLC, which is the development portion of Breckenridge Grand Vacations, was at the top of the local list, receiving $5 to $10 million in funding. Breckenridge Grand Vacations is the largest year-round employer in Summit County, according to CEO and co-owner Mike Dudick. While it was estimated that the funding saved about 500 jobs, Dudick said this number is closer to 650 as the company applied through one entity but has multiple subsidiaries.
Dudick said that the company was able to retain over 90% of its employees while without the funding, only about 70% to 75% of employees might have been retained. He said almost everyone on the operations side of the business was brought back, although there was some “permanent displacement” on the real estate side.
Employees retained with the loan were able to work on various projects before lodging facilities reopened. For example, Dudick explained that the IT team was able to pursue a software project that otherwise wouldn’t have happened during the pandemic.
“(Paycheck) Protection Program, it lived up to its name. It saved jobs,” Dudick said. “The PPP money that was received throughout this community was an essential part of being able to return our site to some level of normalcy. There’s restaurants that are open and retail shops that are open that, who knows what would have closed had it not been for the PPP money.”
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