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Bell's Brewery, MEA, DSO recipients of large Paycheck Protection loans

High-profile businesses and nonprofits, including the Michigan Education Association, Crain Communications Inc., the Detroit Symphony Orchestra and Bell's Brewing Inc. are among the 120,000-plus Michigan organizations to receive funding through a federal small-business loan program aimed at shoring up payrolls amid the coronavirus crisis.

That's according to data released Monday by the U.S. Small Business Administration, the administrator of the Paycheck Protection Program. In all, 121,135 loans totaling nearly $16 billion were approved in Michigan as of the end of June, according to the SBA. 

The Detroit Symphony Orchestra retained 214 jobs under the program.

The Detroit News examined data on Michigan organizations that received more than $2 million in funding. The SBA did not report specific loan amounts businesses received, but provided ranges that began at $150,000 to $350,000, to as high as $5 million to $10 million. Some of the prominent recipients include:

$5 million to $10 million:

  • Albion College, a small liberal arts college in Calhoun County, 498 jobs retained
  • Bell's Brewery Inc., 500 jobs retained
  • Crain Communications Inc., 500 jobs retained
  • Michigan Education Association, 285 jobs retained
  • Detroit-based law firm Miller, Canfield, Paddock and Stone PLC, 313 jobs retained

$2 million to $5 million:

  • Archdiocese of Detroit, 206 jobs retained
  • Detroit Symphony Orchestra, 214 jobs retained
  • Detroit Institute of Arts, 200 jobs retained
  • Detroit Zoological Society, 165 jobs retained

Honigman LLP, a large Detroit-based law firm, is listed as receiving a $5 million to $10 million loan, but when contacted by The Detroit News, said it had decided in May to return the money.

The figures on jobs retained are based on what the companies listed on their applications.

The Detroit Zoological Society was among the major recipients of federal business loans.

The list of businesses and institutions in this story is by no means comprehensive, and is simply a sampling of well-known recipients in the state. The full list can be downloaded from the SBA's website.

The Michigan Education Association, an East Lansing-based labor union representing teachers, faculty and education support staff, said it received a $6.4 million loan: "With 285 employees across Michigan, we’re proud that we’ve been able to do the right thing and continue to pay employees during the pandemic, despite uncertainty on the horizon," spokesman Doug Pratt said in statement to The News. "The PPP program has helped us do that."

Pratt said teachers continued to pay their union dues while staying on the payroll during the pandemic. Asked why the MEA needed the loan if dues continued to be paid, he responded by email, "There is pandemic-induced uncertainty on the horizon relative to the funding situation for public education. We hope the U.S. Senate addresses the funding needs for Michigan’s students and educators."

Comstock-based Bell’s Brewery received a $7 million loan, which prevented the business from laying off about 130 people, according to Larry Bell, president of the brewing company. Close to 40% of Bell’s business comes from bars and restaurants, he said. With those shut down during the stay-at-home order in Michigan, Bell’s business was hit hard in April and May: “We pretty much lost 38% of our business overnight."

The shutdown came at the worst time for the brewery, which was looking forward to celebrating the release day for its seasonal beer, Oberon: “We had about 38,000 kegs of Oberon ready to go out in the marketplace for Oberon opening day, which is one of our biggest events of the year all over the state and the Midwest,” Bell said. “So, overnight we lost an incredible amount of business and we found ourselves in a position where we were going to have to buy back beer that couldn’t be used.”

The loan has been “essential” for the brewery, Bell said: “There were some dark days there … looking at how many people were going to lose jobs."

Detroit Symphony Orchestra event cancellations due to COVID-19 "significantly impacted our revenue, and the economic uncertainty made the Paycheck Protection Program loan necessary to support ongoing DSO operations," spokesman Matt Carlson said in a statement. "The loan helped us to retain all full-time employees, continue to provide health insurance, and, together with across-the-board salary reductions and a board-led Resilience Fund campaign, has provided stability for the organization and anticipation of a balanced budget."

KC Crain, president and chief operating officer of media publisher Crain Communications, said in a statement, "The program did exactly what it was designed to do. It assisted Crain by covering the majority of our payroll and rent expenses, allowing us to maintain staffing levels and pay throughout the covered eight-week time period." 

Ned McGrath, director of public affairs for the Archdiocese of Detroit, said in a statement, "The PPP helped retain thousands of workers" in six southeast Michigan counties. "These workers include office managers who maintain essential day-to-day operations in our parishes, program managers who kept food pantries open, and teachers and staff who administered and delivered distance learning for tens of thousands of students.”

The other listed recipients could not be reached for comment or did not respond by press time.

The release of the data trove follows conflicting statements by President Donald Trump's administration about how much information it would release about loan recipients. Treasury Secretary Steve Mnuchin previously caused an uproar about the transparency of the program by telling Congress the government would not release the names of borrowers, a statement he later walked back.

Monday's release, however, is not complete; for loans of less than $150,000, the SBA is not providing the names or addresses of recipients. Those recipients make up the majority of borrowers, although the SBA and Treasury Department noted that loans of more than $150,000 account for nearly 75% of the loan dollars approved.

In Michigan, the majority of loans — nearly 102,000 — were for less than $150,000.

The program, created as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was signed into law in March, was designed to help small businesses, many of which had to close their doors because of stay-at-home orders, keep employees on payroll at organizations with up to 500 workers. If they meet certain criteria, employers can apply to have the loans forgiven. The loan amount an organization is eligible for is based on the size of its payroll.

"While the pandemic has greatly impacted our economy, in the true spirit of entrepreneurship, small businesses have shown they are resilient and stronger," Rob Scott, administrator of the SBA's Great Lakes region, said in a statement Monday. He noted that thanks to a recent extension, businesses now have more time to seek a loan. The program's application process reopened Monday and will remain open through Aug. 8, with $131 billion in funding still available.

The program has stirred controversy over complaints from some small business owners who reported difficulty in applying, especially during the first round of the program, and because a number of publicly-traded companies were revealed to have received funding.

The Washington Post reported Monday that some 90,000 businesses received loans, despite not reporting how many jobs they would retain or stating they would not retain any jobs. Further, the Post found, millions of loan dollars went to private equity-backed chains and to companies owned by members of Congress.

The data on Michigan recipients indicates that some businesses in the state also did not report how many jobs they would retain with the loan money, or in some cases reported zero jobs would be retained.

jgrzelewski@detroitnews.com

Twitter: @JGrzelewski

khall@detroitnews.com

Twitter: @bykaleahall