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National Independent Venue Association Pens Open Letter To Congress Calling For Federal Intervention

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WASHINGTON D.C. (CelebrityAccess) — The newly-formed National Independent Venue Association brought its lobbying efforts to Capitol Hill on Wednesday with an open letter calling for targeted legislative and regulatory assistance to help the independent venue community survive the financial catastrophe crisis facing the industry.

“Our passionate and fiercely independent operators are not ones to ask for handouts,” said Dayna Frank, NIVA Board President and owner of First Avenue in Minneapolis. “But because of our unprecedented, tenuous position, for the first time in history, there is legitimate fear for our collective existence.”

The letter, addressed to congressional leaders, called Congress to throw a lifeline to independent music venues across North America, who have been struggling after the concert industry came to a halt almost overnight as the Nation’s governors imposed bans on mass gatherings around the country in response to the pandemic.

Among the measures NIVA calls for are ensuring that the Small Business Paycheck Protection Program Program services business most in need. This week, many Americans were surprised to learn that businesses such as restaurant chains owned by private equity investors were among the largest recipients of loans from the program and that banks were taking percentages of as much as 5% from issuing the loans on behalf of the government.

NIVA also called for the PPA loans to be extended until they are no longer needed and to create a fair forgiveness program to help recover.

As well, NIVA called for tax relief, including deferral of federal taxes for shuttered businesses and making revenue from tickets taxed as derived from ‘distressed inventory’ for tax purposes.

The closures have led to a complete cessation of revenue for the foreseeable future for many venues and will likely make it impossible for them to survive. The situation is compounded by the facts that many of the venues were among the first businesses to be closed and will likely be among the last to re-open as the pandemic wanes.

NIVA, which launched last week, is comprised of more than 800 independent live music venues and promoters across 48 states and Washington, D.C. who have united to leverage resources for its members and provide a voice for small business owners in the live entertainment world with both the Federal and State governments.

The organization is led by a board of directors that includes First Avenue Productions CEO Dayna Frank, World Cafe Life Founder/President Hal Real, (Le) Poisson Rouge Co-founder Justin Kantor, Heard Presents Managing Partner Stephen D. Sternschein, and Marauder Co-founder Rev. Moose.

The full text of NIVA’s open letter

Dear Speaker Pelosi, Leader McCarthy, Leader McConnell, and Leader Schumer:

On behalf of the National Independent Venue Association (NIVA), we are writing to thank you for your strong leadership in addressing the detrimental impact of the COVID-19 pandemic on our nation. We share your concerns about this serious health crisis and stand behind your valiant efforts to protect American lives while stabilizing our economy. As you continue these efforts, we look forward to using our members’ powerful and united voices, which reach more than 100 million Americans, to help accomplish these critical goals.

NIVA is comprised of more than 800 of the most influential independent music venues and promoters across 48 states and Washington, D.C., including Kentucky Performing Arts (est. 1983) and Headliners Music Hall in Louisville (est. 1998); the Bowery Ballroom (est. 1998) and City Parks Foundation’s SummerStage (est.1980s) in New York City; the Great American Music Hall (est. 1907) and Bill Graham Civic Auditorium (est. 1915) in San Francisco; Fox Theater in Bakersfield, CA (est. 1930); and the 9:30 Club (est. 1980) and the Anthem (est. 2017) in Washington, D.C.

Each year, thousands of independent venues host millions of events, staffed by hundreds of thousands of employees, and attended by hundreds of millions of concertgoers across all walks of life. Our entertainment hubs are important economic multipliers for our local economies and tax bases as employers and tourism destinations, and revenue generators for neighboring businesses such as restaurants, hotels, and retail. One Chicago impact report estimated that for every $1 spent on a ticket, a total of $12 in economic activity was generated. In New York City alone, our ancillary impact is more than $500 million. While we are small businesses, the estimated direct annual economic impact we bring to our local communities is nearly $10 billion.

The cultural impact of our venues on our local communities is priceless. We are the steadfast incubators and launch pads for the most popular talent in the world. Our stages give artists like Adele, U2, Keith Urban, Prince, Lizzo, the Eagles, Wu-Tang Clan, and Foo Fighters their start. The world could be without the next Lady Gaga, Kenny Chesney, Chance the Rapper or Bruce Springsteen if we cease to exist. Independent venues and promoters are crucial components of the music industry’s ecosystem, without whom there will be dire ramifications for artists as fan spending plummets.

Our businesses were among the first to close as COVID-19 spread across the country, and unfortunately, are also likely to be among the last to reopen. Recently, leaders in both California and New York expressed skepticism about the return of concerts and live events until at least 2021, which means that in order to protect lives, our employees and artists may remain without jobs and we may be without revenue for an entire year or more. Even once venues are permitted by the government to reopen, our industry will require months to return to usual schedules, due to the intricate and complicated process of artists’ planning, scheduling, and tour routing. Further, capacity limitations and other restrictions will likely inhibit our ability to fully recover for years. Many believe this will not happen until a vaccine is readily available to the public. Others worry that even if they can hold on through the shutdowns, they will not be economically viable if they have to operate at 25 or 50 percent occupancy.

We truly appreciate the tremendous response and swift action taken by Congress to support many industries across America, but unfortunately, the programs that were enacted provide little relief to independent venues and promoters. In our present situation, in order to ensure public health, we have no opportunity to generate revenue and we have no work to offer most of our employees. The current programs are designed for businesses that will potentially be able to return to normal business operations in the coming weeks and months. They fail to sustain an industry like ours. With your help, we will resume normal operations and our businesses and employees will come back stronger and more resilient than ever. But right now, without your help, thousands of independent venues will not survive to see the day when our doors can open to the public again. While we have no income, we do have essential employees, employee benefits, debts with personal guarantees, rents or mortgages, utilities, insurance, local, state and federal taxes, and the massive burden of ticket refunds for more than 100,000 canceled shows
due to COVID-19.

Many of our members, such as Pabst Theater in Milwaukee (est. 1895), the UC Theatre Berkeley (est. 1916), the Wilma in Missoula (est. 1918), Cain’s Ballroom in Tulsa (est. 1924), Newport Festivals in Rhode Island (est. 1954), the Troubadour in Los Angeles (est. 1957), Preservation Jazz Hall in New Orleans (est. 1961), First Avenue in Minneapolis (est. 1970), Exit/In in Nashville (est. 1971), Antone’s in Austin (est. 1975), the 40 Watt in Athens, GA (est. 1979), and Metro Chicago (est. 1979) are historic, iconic institutions that have withstood normal business cycles and economic hardships. Our passionate and fiercely independent operators are not ones to ask for handouts. But because of our unprecedented, tenuous position, for the first time in history, there is legitimate fear for our collective existence.

In short, our members, employees, artists and local communities are facing an existential crisis as a result of the COVID-19 pandemic and are in urgent need of targeted legislative and regulatory assistance. In particular, as you continue to work to address the COVID-19 crisis, we respectfully request that you consider the following solutions to address the unique situation facing our industry:

Ensure the SBA PPP Loan Program Helps Those In Greatest Need. Modify the existing PPP program, including with a separate allotment of funds for businesses that are completely closed in accordance with government-mandated social distancing guidelines and are severely distressed, or create a separate program for these businesses.

Important features needed specifically for shuttered businesses like ours include:

  • Increase the loan cap to at least eight times the average monthly cost of all qualified uses of the loan.
  • Build-in flexible loan forgiveness by (1) allowing the use of loan proceeds on payroll, rent, utilities, ticket refunds, working capital, insurance and debt obligations with no minimums on the percentage dedicated to any one expense; and (2) waiving the requirement for loan forgiveness to be contingent on employee retention if companies have no work to offer employees.
  • To the extent loan pay-back is required for any portion, ensure that payments are not required and interest does not accrue until one year after the industry is able to resume normal operations at full legal capacity.
  • Amend the program to expand the multiple location provision and affiliation waivers to entertainment businesses (NAICS Codes 711310 and 711320) with multiple physical locations, but less than 500 employees per location, to receive PPP loans.
  • Extend the program until shuttered businesses are able to resume normal operations at full legal capacity and allow eligible companies to apply for multiple PPP loans.
  • Ensure quick processing through SBA based on information and data already submitted to SBA through initial applications.

Tax Relief

  • Ticket Revenue. Consider tickets sold by small and medium-sized promoters for canceled and postponed events to be considered “distressed inventory” for tax purposes and provide a tax credit for refunded ticket prices where a patron has opted for a refund rather than a voucher for a future event.
  • Employee Retention Payroll Tax Credit. Expand eligibility to include shuttered businesses who are recipients of PPP loans and continue this benefit until the industry is able to resume normal operations at full legal capacity.
  • Tax Deferral. Request that federal taxes for shuttered businesses be deferred until at least six months after the industry is able to resume normal operations at full legal capacity.

Unemployment Insurance.

Continue additional federal support for unemployment insurance for employees of shuttered businesses, including contract workers and artists who otherwise do not have access to relief.

Mortgage and Rent Forbearance.

Develop a solution to allow commercial rent and mortgage payments to be abated without lease cancellation until shuttered businesses are able to resume normal operations at full legal capacity.

Business Recovery Fund.

Establish a grant-funded business recovery fund.

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