Nearly 1,800 Colorado restaurants received $480M in federal grants

This spring and summer, 1,762 restaurants, bars, breweries, wineries and caterers in Colorado received a combined $480 million in grants from the federal government — money that doesn’t need to be repaid and can be spent on a wide array of business expenses.

Four Colorado businesses received $10 million each, the largest amount possible: Mission Yogurt, based in Westminster; The Kitchen American Bistros in Boulder, which has four restaurants and is owned by Elon Musk’s brother; Breckenridge-Wynkoop breweries in the Denver metro; and Illegal Pete’s, according to data released Monday by the U.S. Small Business Administration under the Freedom of Information Act.

Among the 75 largest beneficiaries in the state – which received a combined $191 million – 74 are along the Front Range (the other is in Aspen). In Denver, 423 companies received $183 million. In Boulder, 97 took in $47 million. In Colorado Springs, 139 businesses received $33 million.

Businesses across the country quickly drained the $28.6 billion Restaurant Revitalization Fund, which was created by Congress in March, to the point that companies in other states are complaining and suing in search of their share, citing the fund’s preference to provide money to women and people of color.

For those who received the cash, it’s a boon to an industry decimated by pandemic-related closures over the past 17 months, allowing them to reopen, rehire and repair.

“Denver Milk Market is only open right now because of the revitalization fund. So, thank god for that,” said co-owner Jacqueline Bonanno, whose business received $3.7 million on May 29.

But the program is not without its problems. Rhein Haus, a German restaurant in Denver’s LoDo neighborhood, erroneously received $5 million rather than $1.9 million due to a government data error, according to a company spokeswoman. It’s working to return the money, she said.

“A little bit of security”

Ryan Cobbins sat at home last year and cried as he struggled to determine whether Coffee at the Point, his coffee shop in the Five Points neighborhood, would survive. He can remember the embarrassment he felt when his wife put her hand on his shoulder and told him he could walk away from the business he started a decade before.

He couldn’t.

“Without this, to me, I am nothing. It’s that motto: Either you’re going to find me at the top or on the side of the road dead. That is really how I feel about this place,” he told Small Business Administration head Isabella Guzman and U.S. Sen. John Hickenlooper last month. Coffee at the Point received $88,953 from the fund and Cobbins spent much of it on raises for his 15 employees.

“This support has been life-changing for businesses that have been so heavily impacted during COVID,” Guzman told reporters that day. “Through no fault of their own, they had to shut down or get creative to stay open and they were already operating on small margins as it was.”

The grant amounts are calculated by subtracting a business’ 2020 gross receipts from its 2019 gross receipts. For places that opened in early 2020, the government subtracts post-pandemic receipts from pre-pandemic receipts.

The money can be spent on nearly any business expense.

“We need additional furniture. We need equipment. So, we’re looking at how we can utilize that money for those types of things,” said Beth Gruitch, a co-owner of five Denver restaurants and recipient of $272,050 from the Restaurant Revitalization Fund.

“It gives us a little bit of security, to be honest with you,” she added. “During the pandemic, we dwindled all of our accounts down. We had to. We didn’t have the income coming in and we still had expenses.”

Businesses have until March 2023 to spend the money. Will Frischkorn, co-owner of the food market Cured on Boulder’s Pearl Street, plans to spend his $111,342 grant soon. Other restaurateurs, weary of the uncertain year ahead, are deliberating.

“There’s a tension between bringing as many people back as quickly as we can and also trying to make sure that the money is there for as long as the pandemic continues,” said Bonanno at the Denver Milk Market, which employs 190 people. Two hundred and 60 people worked there pre-pandemic.

Race and recovery

Across the U.S., 5% of the businesses who received grants got 40% of the money, according to an analysis by The Counter.

At Breckenridge-Wynkoop, the $10 million in taxpayer money will mostly be spent on payroll and operating costs, spokesman Alex Bunn said, and a small portion will be used to construct patios to take advantage of Denver’s looser rules.

Mission Yogurt’s $10 million will allow the company to continue employing more than 500 people in this pandemic year, according to president and owner Rod Tafoya. His dozen restaurants in Denver International Airport saw a $30 million decline in sales last year.

The two other Colorado companies that received $10 million did not respond to requests for comment.

Notably, two of the top four recipients have ties to Hickenlooper, who is an outspoken supporter of the Restaurant Revitalization Fund.

The freshman senator, who sits on the U.S. Senate’s Small Business Committee, cofounded the Wynkoop Brewing Company in Denver in 1988 before entering politics and selling his stock. And The Kitchen restaurant group was cofounded by Kimbal Musk, a friend of Hickenlooper, who officiated Musk’s wedding in 2018 and flew on Musk’s private plane.

Hickenlooper’s office says he never discussed Restaurant Revitalization Fund applications with owners of Breckenridge-Wynkoop or The Kitchen before they were approved.

Most Coloradans receiving the grants have something in common: They are not white men. After the fund was created in March, women, military veterans and “socially and economically disadvantaged” individuals, like people of color, were allowed to apply early.

By the time non-veteran white and male business owners applied, most of the money was gone, prompting lawsuits. Several federal judges determined the policy was discriminatory.

In Colorado, more than 75% of recipients belong to the priority demographics, including 741 women, 462 members of socially and economically disadvantaged groups and 128 veterans, according to an analysis of SBA data by Hickenlooper’s office.

The amount of RRF funds “is clearly not enough,” Sonia Riggs, president and CEO of the Colorado Restaurant Association, said last month.

For the Colorado business owners who did receive money, it has been a light at the end of the darkest financial tunnel their companies have ever known.

“This is amazing, it is a game changer,” Gruitch said. “It really, truly is.”

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