Pepino's owner Susan Stephenson gets ready to hand off a to-go order to a customer at the Bangor restaurant on June 12, 2020. Credit: Natalie Williams / BDN

As the majority owner of a Bar Harbor movie theater and restaurant, Lisa Burton had been approved for COVID-19 financial relief through a federal restaurant relief program, but now she’s been told she’s not getting the money.

Burton, who with her husband Chris Vincenty opened Reel Pizza Cinerama in downtown Bar Harbor in 1995, had applied for a federal grant through the Small Business Administration’s Restaurant Revitalization Fund. She was told the fund, created as part of the American Rescue Plan Act, would cover the difference between what the business had earned in revenue in 2019 and what it had earned in 2020, when the COVID-19 pandemic kept customers away and forced many restaurants to close down, some of them permanently.

In Burton’s case, that difference is roughly $425,000, which she said would have been “a game changer” in allowing her to attract the staff she needs to start showing movies again, among other things. Reel Pizza has been open through the winter with a skeleton crew offering takeout only, selling pizza and other items off its menu that customers either can take home or consume at picnic tables set up in the theater parking lot.

Burton had been told by administration staff that, because she owned 51 percent of the business, Reel Pizza qualified as a female-owned business and would be given priority among other restaurants applying for the same grant. But then some other restaurant owners sued the federal agency, saying they were being discriminated against because they were not women, veterans or another kind of “socially and economically disadvantaged individuals” granted priority status.

A conservative legal group founded by former President Donald Trump aides Stephen Miller and Mark Meadows filed a lawsuit in Texas on behalf of the owners of a Texas restaurant, arguing that the Biden administration’s efforts to prioritize applicants on the basis of race and gender was unconstitutional, Reuters reported.

The federal court in Texas then issued a preliminary injunction requiring the Small Business Administration to keep approving funds for non-priority applicants, Reuters reported. Earlier this month, the administration said it would not provide approved funds to more than 2,900 small businesses owned by women, veterans and disadvantaged people to comply with the injunction.

And this week, citing “overwhelming demand,” the administration said it was shutting the program down because it has disbursed all of the $28.6 billion Congress had approved for the program — though it did say it will retain applications it has received in case Congress allocates more money for the fund.

Proposals to replenish the fund with $60 billion have been introduced in the U.S. House and Senate.

The Small Business Administration told Burton in May that she had been approved to receive funding and that the money would appear in her bank account in three to 10 days. Later, that timeframe grew to 10-14 days, she said.

“They said we were approved,” Burton said. “Then it was ‘just be patient.’”

Sen. Angus King, who last year cosponsored a bill that would have provided $120 billion in COVID-19 relief to restaurants, supports additional aid for eateries that continue to feel the pandemic’s effects, a spokesperson said Thursday.

Susan Stephenson, who runs and has a 50 percent ownership interest in Pepino’s restaurant in downtown Bangor and Pepino’s Taco Stand in Brewer, also applied for a grant through the program but ended up not getting any money. Pepino’s is not a majority female-owned business, however, so she did not qualify for the priority status.

Stephenson said she hoped to get $30,000 through the federal program. If she had received the money, she would have spent some of it on facilities upgrades and would have offered bonuses to help keep her core staff who stuck with her through the worst of the pandemic, when at first she could only offer takeout and then had reduced-capacity seating.

Instead, on Wednesday, she received an email from administration saying the program was being shut down.

“Our industry has been crushed,” Stephenson said, adding that Pepino’s has been in business for 43 years. “A lot of [restaurants] need the funds to continue to operate and stay in business.”

Burton, whose business gets most of its income from food sales rather than movie tickets, said she and Vincenty have been losing money through the winter, paying three longtime employees whom they rely on to run the business, and need to start showing films again. She only needs about a week or two of lead time to have movies lined up for showings, she said.

The bigger challenge is being able to offer competitive pay to attract workers in an extremely competitive labor market that employers say has left them short-staffed. Had the business administration sent the funds to Burton back in early May, she would have had an easier time finding and hiring employees, she said. Now that it is July, even if she had the administration money, filling positions is nearly impossible.

“We’ve been trying to hire people for a month-and-a-half,” she said. “We need kitchen staff.”

Stephenson said that staffing also now is the biggest challenge her Bangor-area eateries face. Maine restaurants were allowed to return to 100 percent capacity seating in late May, when many seasonal restaurants also were hiring for the summer, but she has been unable to fill all the available positions at Pepino’s. Staffing shortages also have hampered the restaurant industry’s wholesale suppliers, she said, making it difficult to keep some menu items in stock.

“We are all trying to make it work, but it is under incredibly difficult circumstances,” Stephenson said. “I have never seen anything like what I have seen in the past three months.”

Stephenson said she is hopeful that Congress will allocate more money to fund the program. The restaurant industry in Maine is “incredibly diverse,” she said, and it is often the glue that helps to hold the local community together in Maine’s small towns and larger cities.

“I believe we make the world go round,” Stephenson said.

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Bill Trotter

A news reporter in coastal Maine for more than 20 years, Bill Trotter writes about how the Atlantic Ocean and the state's iconic coastline help to shape the lives of coastal Maine residents and visitors....