Over 300 Beach City businesses receive $150,000-plus federal payroll loans: Complete list

Restaurants, law firms, day care centers and churches are among the hundreds of entities in the South Bay to have received loans from the federal Paycheck Protection Program enacted to boost the economy amid the downturn associated with the coronavirus pandemic, according to data released by the government this week.

The information was released by the Treasury Department Monday in response to concerns that the program was plagued by cronyism and bungling, concerns that were not entirely allayed by the huge volume of information made available. Businesses associated with politicians of both major parties, as well as wealthy celebrities like Kanye West and militant critics of government spending like the organization Americans for Tax Reform, received funds.

But most economists also agree that something like the PPP was necessary to prevent the economy from spiraling out of control. In California, businesses applying for the loans represented about 6.5 million jobs, more than a third of the total in the state before employment figures plunged in April. In the South Bay, loans totalled tens of millions of dollars and, at least for a time, have enabled businesses to protect hundreds of jobs, according to the data.

The program, popularly known as PPP, was a central element of the CARES Act, which was signed into law on March 27. It offered businesses federally guaranteed loans of up to $10 million that could later be forgiven if certain percentages were spent on payroll, with the goal of stimulating the economy while many businesses were unable to operate due to orders from local public health officials. After the fund’s initial $350 billion was quickly exhausted, Congress approved an additional $310 billion. Demand has since slowed, and about $150 billion remains unallocated.

As was the case nationally, restaurants, which face significant operating limitations in California and a public that remains wary of the risk of contracting COVID-19, received a sizable portion of the funds. Hennessey’s Tavern, Inc., which operates Irish-themed bars in each of the beach cities and throughout Southern California, received between $2 million and $5 million, supporting 380 employees, the data state. Newman Hospitality Incorporated, received between $2.5 million and $5 million. The Hermosa Beach-based restaurant group oversees local establishments like Baja Sharkeez and Tower 12, as well as more than a dozen other bars and restaurants in Southern California. According to the data released by the government, the company retained 495 jobs during the pandemic.

Other businesses that received more than $1 million include Beach Babies, the Manhattan Beach based company that runs four South Bay childcare centers. It retained 193 jobs. Beach Cities Orthopedics and Sports Medicine, also based in Manhattan, which retained 134 jobs; and MBS Asset Management, the entity that controls Manhattan Beach Studios, and retained 325 jobs.

Business names were available for recipients only of loans greater than $150,000. In the four zip codes associated with Hermosa, Manhattan and Redondo Beach, there were about 3,500 loans for less than that amount. Many of them were sole proprietorships and independent contractors; one Hermosa corporation was identified as receiving $20. 

Several firms contacted for this story said there were errors within the listings. Les Beaux Interiors, a small furniture design business in downtown Manhattan Beach, was listed as having received between $5 million and $10 million despite having only nine employees, the single largest loan listed for a business in the area. Reached by phone, owner Nancy Russert was dumbfounded.

“Gosh, that is unreal,” she said. Russert said her firm did receive a loan under the program, but for substantially less. Business has definitely slowed down, she said, but she ran her business cautiously before the pandemic began, and felt lucky to be “one of those business owners that can ride this out.”

The amount of money a firm is eligible to receive is tied to payroll, and the errors appear to be concentrated among firms with small staffs. An audio engineering firm with three employees and an address listed as a residence in east Hermosa was identified as receiving between $2.5 million and $5 million; a person who answered the phone for the business said the figure was wildly wrong.

In other parts of the country, some news reports have identified businesses listed that never received funds at all. 

 “I’m not surprised that they made an error. They’ve sent stimulus checks to dead people,” Russert said.

The Treasury Department did not respond to requests for comment. ER