 Welcome to Think Tech, Restaurants Hawaii. Today, June 15, 2021, and it's lunch hour in Hawaii. My name is Cheryl Matsuoka. I am the Hawaii Restaurant Association's Executive Director, and today I have two guests. Our first guest is Mark Spain, who is the District Director for the State of Hawaii Small Business Administration. The second guest is Shabon Garcia, Hawaii Restaurant Association's Executive Assistant. So I'll have Shabon go ahead and introduce Mark. Yes, thank you. We want to welcome today, just as you said, Mark Spain. He is the SBA District Director for the State of Hawaii, the territories of Guam and American Samoa, the Commonwealth of the Northern Mariana Islands, the Federated States of Micronesia, the Republic of Palau, and the Republic of the Marshall Islands. Yes, Mark. So today's topic, Mark, is the recent court case where payments to the Restaurant Revitalization Fund grant recipients were suspended. And these recipients were qualified under the priority designation of the Restaurants Act. And to me, this demonstrates that Congress needs to replenish the RRF, the Restaurant Revitalization Fund, and my message to restaurant tours is to stay motivated and to contact your Washington delegation to finish the mission and fully fund the RRF. Mark? Well, I'll tell you what, we'll answer your last statement first. The fact is it will be funded. We do know that there's two, both House and Senate, are proposing a $60 billion addition to the $28.6 billion that was already funded for the program. I think it's important to point out that for the priority group, $28.6 billion was allocated for the entire restaurant group, of course. Of that $28.6 billion, nearly $26.8 billion has already been allocated to the priority group. Now, the problem is that the applications total over $300,000. We know that the amount of money to meet the balance of the applications indeed is right around $61 billion, $60 to $61 billion give or take. And that would be fully replenishing the fund necessary to fund all categories of restaurants, whether priority or standard. Back to you, Cheryl. Yes, and Mark, as I mentioned, when the court ruling happened on Friday, my phone, the texts and the calls didn't stop. So one of the questions that I received from a Hawaii Restaurant Association member is, how does the court ruling affect those restaurant tours that received the notice last week, but that they have been approved, but they have not seen their funds in their bank account yet? So how does this affect those restaurant tours that hasn't seen the money, but has received the approval notice? Yeah, there's almost 3000 approved restaurant tours in the priority group that have had, because of the court injunction, have had their funds held in suspense. I think very candidly, the solution to that is going to be the additional funding coming from Congress, so that all categories of restaurant tours can be taken advantage of. But right now, with the injunction, and I will provide to your membership for you to distribute, Cheryl, both the comments from the SBA Chief Legal Officer and also a summary. Some people can probably Google it themselves, but I'll send you both documents so you can share with your membership in greater detail than perhaps I can comment on the program today. Three solutions. Number one, Congress, you have to find the balance. Number two, when you do, I think the litigation will be dismissed or modified out of court settlement. Number three, then the funds dispersed that are being held in suspense will be dispersed. Wow. Wow. So that's, yeah. The other question that I received was, and this is a really burning one, because some of our members has received the funds in the bank. So now with the court ruling, will they have to refund the money? Is there any slim chance that they won't be able to keep it? That was the burning question. Not to worry. Based upon the information I have on page two of this document that I'm sharing with you later, the fact is the funds based upon the law are in compliance with the law. Now, with the actual $60 billion advance, I do feel there will be some clarification language, not to worry about the removal or the resending back the money, not at all, but merely to make the intent of Congress more clear that no discrimination was intended by the statute. All we were trying to do is reach out to those who did not necessarily have the resources as other restaurateurs would have to make their happening. It was merely a timing decision. It wasn't an exclusion decision, but because of the funding being short, obviously it meant that those who are not in the priority group are basically being deferred. It's not much different than the PPP program last August the 8th when Congress did not move forward until the 27th of December when President Trump at that time approved the PPP to resume. We don't want to see that happen for the restaurant revitalization, but it shouldn't happen because it's not alone. It is a grant. And I feel at this point, no worries on any of your membership should be focused on the concern about returning the money back to the SBA for that purpose. Looking forward, we hope to take care of everyone's needs. Back to you. That's a big few for a lot of our members that I've heard from Mark. So thank you for that reassurance. I'm going to turn it over to Siobhan. She also had a few questions. So one of my questions, too, would be the $60 billion that you're mentioning. Do we have any idea on a timeline of when this will be funded and when people can start to expect to see those monies that have been approved in their bank account? I think it's probably safe to say that the Department of Justice once does not want to deal with this, Siobhan, any longer than it has to. I have a feeling that Congress will be on a fast track. Not much different than what we experienced last April and May when the initial recovery monies were made available through the economic entry disaster loan. So I would hope before, and I'll say this with no certainty on my part, but just being around the Congress for the last 50 years of my career, that they want to do it before the 4th of July holiday. Fund it. Wow. So soon. We hope so. Okay. And then another question that we've kind of had or has kind of been circling around is, you know, when you purchase a home, right, there's all these protected classes and you can't prioritize based off of things like marriage or sex or anything like that. So with that said, how did something like the RF, how did they get approval to kind of say that people were socially disadvantaged when it does seem like everybody during COVID was socially disadvantaged? I'll give you a response. It's based upon what we call in the SBA, the 8A program. That's a contracting program that literally provides guidance to federal contracting officers who do business to small business firms who do federal subcontracting. There is a very strict guideline based upon almost 35 years of protocol and legislation. That way, if you are allowed to enter the program, you know you're coming in because you're either socially or economically disadvantaged. You're a women owned firm or you're a veteran owned firm that needs additional protection in order to be able to compete in the contracting world with larger firms, those that don't qualify as a small business by a statute. In this case, Congress had no precedent for this particular grant. What they chose to do in the hurry after the inauguration of President Biden was try to reach out in a very forceful way. The lack of wisdom, if I were sitting across from the Congressman case or Congressman Cahilly or Senator Herano and Senator Schatz was the incomplete assessment of what the need was. When we're talking about a $2 trillion to sell $6 trillion annual expenditure, it would probably be safe to say, except for certain states where the lockdown wasn't severe, that the money of $28.6 billion just did not compute. There are resources on Capitol Hill that can definitely allocate and they do it very well, what will be the probable amount that would be due and they use an assumption. And this assumption process was not used to the full extent of its capability. So as a result, you have a suit, a lawsuit filed that says discrimination, discrimination, because number one, there was a timing priority, that's fine. But when you don't have any money to go into the non priority group, this is what caused the litigation to happen. And I feel again, it can be resolved when Congress passes the $60 billion, all of the people who are in the queue and ready to be given money under the non priority group will receive their funds as well for planning. And Mark, our message to our members is right now the National Restaurant Association's Restaurant Act initiative is something that we really need support. And so if there's any viewers out there, email me at info at whaterestrat.org if they'd like to put their name in the hat and tell our national delegation that we really need that additional fund. It's something that we all need to get behind because I feel that we get a louder voice when there's more voices. Absolutely. And I think the process really deals with what occupies Congress's time, Cheryl. Frankly, this RF, when it was launched, I was working inside the pods at that time, one of the 10 pods that served the nation. And we're working uncharacteristically government hours, such as 20 hour days. My staff doesn't work those hours, they can't, they don't, they can't because of their restrictions. But I will tell you that this has been like watching a storm go across the Pacific from the Mexican coast to our local waters. We've been able to track this for quite some time. In my opinion, my opinion, I hope that Congress will learn from this that we plan ahead, not plan from the rear. And I mean, it's pretty straightforward. I know that Congressman Case, in my view of his comments, he's one of 526 people. And in some of the delegations that we have where states were not locked down, Florida comes to mind, Texas to a lesser degree, the upper plain states, they don't see that sense of urgency because their restaurants were not precluded from being operable. And so part of this is you know, running the risk of partisanship. Well, the blue states locked down and the red states didn't. I'm hoping that doesn't come into that kind of dialogue. I do know in the article I referenced with this one, some of those dialogues are mentioned in terms of the congressional feedback that other states have provided to their delegations as well. I think one thing for sure, all of the restaurants are united across the United States. We need help. They're not blue or red in their nature. They want their union. They want their constituents and brethren and brothers and sisters, if you will, in the business to be given the help they need, because this pandemic was not of their making, nor was the government policy of their making. Now I'm speaking as a as a business planner, owner, and a good old Marine. Very nice. That's it, strategy. I love it. And one of the earlier conversations that we did have with Senator Hirono was, you know, when the funds were distributed, wouldn't it have been nice if they took the demographics of the population of restaurants in each state and divided it equally according to the demographics of restaurants so that each of the states could have a fair piece of the pie, right? Instead of the whole amount of money is being put in a big pot, and now everybody's going for that pot. If we just had our little piece of the pie and we could have then all asked for just a bite. Yes, that's very true. And I think that the resources to do that, the actual data to do that is available and has been quite some time. And so quite well taken. Yes, yes. There's been so many discussions around how well the SBA has launched this program, how well the positive feedback that I got after that first day, I was with you down at the Blaisdell Center, and people were already in the portal uploading all of their documents, how well the SBA. So I want to just say a huge mahalo and congratulations to the SBA for really a great execution of a very difficult initiative. Thank you for that. And frankly, to give credit to, because we have had several initiatives there, the Idle Program being a former banker, as I often say, a recovering banker, because that was part of my career. I've had four careers in my life, including my government service. So looking at that career is very important to match resources with the need of what you're attempting to accomplish. Jerry Herata, a name that of course has gone from our scene because he passed away in a team, he had the best mantra, he said, adapt, improvise, and overcome. And our staff, Mary Dale, Val Cabota, Cynthia Yamasaki, our AO, Joyce Quinn, who's been with the agency for 35 years and has served seven presidents in her career. It is just amazing how the team has pulled together because we empowered them to serve. And it's that kind of continuity that I'm very proud of in our local staff. Most people don't know. We normally have a staff of 11 people. We only have seven right now. And so you took at the structure. And then one of our colleagues in Guam just came down with COVID-19. So basically we're operating at 50% of capacity, but the will, the strength, the heart is there. And we thank you for your comments because it is definitely one that we do compassion. Oh gosh, a lot of persistence, that's for sure. And a little bit of patience thrown in. That's the cherry on top of the sundae if you want to know the truth. Very nice. And I also know a lot of the other programs that the SBA is providing are local not only restaurateurs but businesses in general. So maybe you want to cover some of those programs to let you know of all the other resources that the SBA has. No problem with doing that. I think the additional economic advantage and I'll make sure I quote them directly. I don't have a teleprompter so you'll have to forgive me a little bit here looking down. But the additional economic relief is available. We still administer programs such as the Economic Entry Disaster Loan. That is one that actually is a 30-year loan. It is a 3.75% interest rate. If you were to go to the local banks here, you would find your probably 250 basis points or approximately 2.5% lower than a conventional loan that you would get from your local banking community. In addition to that, based upon again low-income location based upon the IRS deal met, you have targeted advances that came with the idle program up front. It was a grant and it was at $10,000 and then over a period of two months it was said oh we can only do $1,000 per employee. Well now it was reversed and it's coming back to those who only got maybe one or $2,000 as a small business for two employees. For example, the $8,000 difference is being funded as well. Not a big number compared to restaurant revitalization for sure. And then what we're looking at is how we can look what we do with the loans that were capped originally at $150,000 for the Economic Entry Disaster Loan. We're seeing those now being increased based upon merit to $500,000 and that's been a help for a lot of our local businesses who don't mind getting a loan just so it's the low interest cost. And they think with the return of healthier times, with today for example, inner island travel no longer being restricted for purposes of COVID-19. We look forward to still providing those programs as well. I also will announce on this broadcast that tomorrow we will have my former position deputy district director being filled by a person that is known to the local community. I can't she's embargoed until tomorrow morning but I will share that with you Cheryl tomorrow and she is a known entity. She's coming to us. She's returning home. A little bit of a tease. She worked on the big island before. A known name to a number of constituents. So I'm glad that now I have one position filled and I don't have to worry about the long hours. She'll share them with me. But we're very pleased that this individual, I had four very competitive positions. One from within our office, for example, one from the embassy in Beijing, a very well pronounced commercial services officer. One from the U.S. post office in Washington D.C. who wanted to come back home after being many years on the mainland. And then one of course, who came from we'll call it Northern California. Okay, San Francisco area. But I've been very blessed. We'll have that announcement tomorrow. And that'll help us even better off of the programs and services that we've been short staffed to provide since the first of the year. What do you, Cheryl? Yes, and especially during this time as businesses, restaurants included, you know, are trying to now reevaluate all of their business structures and what they are offering. So this is a great time to reach out to the SBA because of all the resources that they have. They're a partner in our community. And so this is a great opportunity for businesses to take some advantage and look at the SBA for resources and support. Would you like one more piece of breaking news or would Siobhan like to ask a question? No, no breaking news. I can ask the question after. We are going to be empowered. I'm putting together a very extensive document for those not only just in Hawaii, but we serve, you know, 20 different communities in the western Pacific. We're looking forward starting in September 30th of the end of the fiscal year to broaden our staff to have all the positions filled. Number one, number two, we're going to be more aggressive and doing outreach in the neighbor islands because I tease my California colleagues. I said I can't drive from here to Kahalui, but I know you can drive from San Diego up interstate five to LA, but I can't. Everything I do has to have funds for air travel. So we're looking forward to really broadening again. We call it operation footprint. Now that's part of my Marine Corps heritage. So forgive me for that, but operation footprint is going to do a renaissance in the district and how we meet and serve people. And we're going to be out in a month. So that means the Hawaii Restaurant Association, get ready to have a few more, maybe Paul Haunas here and there that will be sort of welcoming back normalcy for our small business community as we go into the fall. We look forward to that, Mark. That is, that's awesome. And as I mentioned earlier, the support that the SBA has given during this very challenging time has been above and beyond. You know, you and I are down there at the blaze of 5 a.m. in the morning, you know, just trying to get the information out, just like today's podcast, you know, we're talking about how the SBA can help not only restaurants, but small businesses. Well, I tell you one thing for sure. There may be a question and you know it better than most of the Hawaii Restaurant Association. There may be a question from my leadership, Bob Blaney, who is the regional administrator for all of Region 9 that covers Hawaii, Nevada, Arizona and California. And then our national leadership, they may want to do a road test, if you will. How has Spain been doing in the local community? So all I'm going to do is just say, talk to Cheryl. And at this point, I'm going to do the same with a couple of others who've really helped us from the neighbor islands as well. But we want to be more robust here in the islands. And I'm looking forward to creating a team based upon the current staff that I have that will even be much more, shall we say, capable so that when I transition from the leadership role here in the district, some years in the future, I won't say how long. But if I do, I want to make sure that I have a very capable team so that when I leave the district, when I do, that the team is already better than when I first walked in. And that's how I want to continuously improve our performance. And thank you for your confidence in our efforts. Back to you, Cheryl. And you have left huge shoes, footprints to fill. You know, huge because of all that you've done, Mark, for our restaurants and our small businesses. And for any of the viewers that are watching, you know, just a few ideas, you know, the restaurants, even though things have picked up, Mark, since March, Mark, you know, things a little busier now, you see the tourism coming back here in June. But yet, COVID left a huge hole in their financials. You know, all of 2020, there was no revenue. So there's still digging out of that huge hole. So if anyone can support the restaurant industry, they have a graduation gift they have to buy, consider a restaurant gift card, Father's Day, consider a restaurant gift card, a birthday, you know, any support to a restaurant supports not only the restaurant themselves, but the whole food chain. It supports the farmers, the fisheries, all the suppliers through that restaurant. So we want to continue if this, you know, our viewers could support the restaurants. It supports a whole industry in our community. Yes. So I'm getting messages here that we only have a few more minutes. And as always, it's a pleasure. It's a pleasure to have you on and thank you so much, sir, for all your dedication and time and energy that you've taken the restaurants through this. Well, I thank you. I thank you for that. Can you just let everyone know where they can apply for these programs that you were mentioning? Yes, the best thing to do, Siobhan, is to have them a go to sba.gov. And then there's COVID-19 related. And what will happen is they'll be directed to landing pages, whether it's the idle program or the idle advance or the targeted advance, or even the RRF, assuming that maybe there is a possibility of it being reopened. I don't want to give false hope that it will. But I feel personally that the sba.gov, now going beyond that, if they want to reach out to me, they can do so. You have my email address. Feel free to share with your membership. And only share how do I give my phone number to but I'll be honest with you. If you want to publish the phone, I do carry it. It's right here, okay, 808-284-6433. And yes, I do office hours past Monday through Friday, nine to five. Very nice. Thank you, Mark. Thank you. Then I go to Roy Yamaguchi's restaurant to celebrate that for a good birthday. Thank you so much. And as I mentioned, any of the viewers, if they'd like to contact me, it's info at hawaiirestaurant.org. We are the Hawaii Restaurant Association. And again, our partner, the Small Business Administration, and Mark Spain. Thank you so much, Mark. The hollow new law.