by Laura Smythe | Philadelphia Business Journal

A bill aiming to alleviate the financial impact that Covid-19 has had on the Keystone State’s independent live music venues is working its way through the Pennsylvania House of Representatives.

HB2894, dubbed the Pennsylvania “Save Our Stages” Act, would earmark $200 million of Cares Act funding for grants available to independent venue operators, theaters and promoters that have had business interrupted at the hands of the pandemic.

Introduced by Rep. Jake Wheatley, a Democrat representing the Allegheny County area, the proposed legislation would affect Pennsylvania’s roughly 225 independent live music venues, which include high-profile locations like the Mann Center for the Performing Arts.

Eligible recipients would include those that organize, promote, produce, manage or host ticketed live concerts, comedy shows, theatrical productions or other events by paid performing artists. Selected businesses would have fewer than 500 full-time employees, not be publicly traded, and not operate venues in more than 10 states, among other criteria.

Grants would be no greater than 45% of gross revenue from 2019 or $2 million (whichever is less) and could be applied to expenses incurred from March 1 through Dec. 31. The funds could be applied to various costs including payroll, rent, utilities, mortgage interest payments, insurance, personal protective equipment and existing loans.

HB2894 is under review by the House Commerce committee.

Many live music venues are faced with dwindling viable survival strategies as the Covid-19 pandemic drags on. Throughout the crisis, many venues were temporarily shuttered for months amid shutdown orders and social distancing restrictions. Now even with restricted occupancies allowed, venues are still on the hook for fixed expenses such as rent and utilities despite drastically reduced revenue.

The state bill follows in the footsteps of a national effort of the same name that aims to secure $10 billion in grants for independent venues, producers, promoters and talent representatives in the federal Heroes Act that is under negotiation in Congress. Some live music venues are especially hurting after being left out of the federal Paycheck Protection Program, as the bulk of the loans were intended for payroll to qualify for forgiveness, but entertainment destinations stood closed.

“Covid has been detrimental to almost every industry in the Commonwealth, and few have been hit harder than live music venues, especially small independently owned venues,” Wheatley said. “These businesses have experienced and sustained a complete loss in revenue through this health emergency, and there is no end in sight. Accordingly, this industry needs assistance.”

Pennsylvania’s live music venues generated $1.36 billion in business in 2019 and employed over 10,000 workers, most of who are now out of work, Wheatley noted. The venues range in capacity from about 100 to 2,000 people and sold 5.3 million tickets last year.

Overall, the businesses generated $238 million in direct economic impact and also helped drive traffic to restaurants and hotels, he said.

Sean Agnew is the owner of Philadelphia-based R5 Productions, the company behind programming and event promotion at venues in the city including Union Transfer and the First Unitarian Church.

Agnew said he fears that if funding for the industry doesn’t pass now, there won’t be another shot until the new congressional session of 2021 — and that timeline could spell doom for some businesses.

“In the last seven months since our last show, it's like someone has taken a vacuum cleaner to our bank account,” Agnew said. “With hundreds of thousands of dollars in refunds and no opening date in sight, we are running out of time. [We are] not months, but weeks away.”

Over at World Cafe Live, a multilevel music hall in University City, remaining cash reserves from PPP and the business’ savings are quickly drying up, according to CEO and founder Hal Real.

“Without relief, we will have to close permanently,” Real said. “As one of the first businesses to be closed by government order, we have had no revenue for seven months. For valid public health reasons, we will not be able to resume normal operations until well after there is a proven, widely accepted and distributed vaccine.”

The same is true for many venues across the state. In Stroudsburg, the root of the challenge for Sherman Theatre is having to finance rent, mortgage loans and other fixed costs while being unable to bring in income, said Executive Director Rich Berkowitz.

“Venues rely on traveling artists who, without a national plan, can’t work the economies of scale to affect touring,” he added. “In addition, the scale required to create acceptable margins normally requires people to be in close proximity to each other, and the social distance spacing inhibits that from happening.”

Click here to read the story on Philadelphia Business Journal.