Member Update
April 24, 2020
What's Inside:
DEED Small Business Employer Emergency Loans
CALL TO ACTION
Alcohol To-Go Clarifications
In the News
DEED Small Business Employer Emergency Loans
Today the House Jobs and Economic Development and Finance Division heard a bill to expand the DEED’s Small Business Employer Emergency Loan Program, something that we have been advocating for several weeks.
The bill, authored by Rep. Zack Stephenson (DFL-Coon Rapids) proposes to add $55 million to the DEED loan fund; $50 million of which would come from the $2.187 billion Minnesota received through federal CARES Act dollars. On March 23, Governor Walz directed DEED to create a Small Business Emergency Loan Program, allowing businesses impacted by Executive Orders  20-04  and  20-08  to obtain zero interest loans up to $35,000, paid back over 5 years (and may be forgivable).
Yesterday, Hospitality Minnesota  sent a letter  to the committee, and other state leaders, asking the government to significantly expand eligibility, loan amounts and the state’s investment. We have been raising for weeks that the program must be expanded to include resorts, campgrounds, hotels and other hospitality businesses that are being financially crushed by the current crisis.
Rep. Kristin Robbins (R—Maple Grove) proposed  an amendment  to expand eligibility for the program to all small businesses harmed by the crisis. Although the amendment did not pass, we are encouraged that Rep. Stephenson indicated he is interested in working with Rep. Robbins to expand the program to other businesses prior to the next committee stop.
Chair Tim Mahoney (DFL—St. Paul), speaking to the bill, expressed his support for a larger package, noting that he would like to see a bill twice this size. He also expressed his frustration that the federal programs have not been sufficient to help small businesses saying, “The federal system has failed our small businesses...this bill is not large enough.” The bill now moves to the House Ways and Means Committee.
CALL TO ACTION
Support our efforts on your behalf: contact the bill author,  Rep. Stephenson  and the  members of House Ways and Means Committee and ask them to support:

  • Expanding eligibility to include hotels, resorts, campgrounds and other hospitality businesses that are taking the brunt of the economic crisis and “stay-at-home” order;
  • Immediately doubling the state’s investment—at a minimum—as suggested by Chair Mahoney. (The state has received $2.187 billion from the federal government and has additional surplus and reserve funds, some of which should be directed to help our industry since it provides 1 in 10 jobs); and
  • Increasing to the loan cap to $200,000 for hospitality businesses that can document their economic injury. The current cap of $35,000 is too limited to meet the financial obligations of many small hospitality businesses that currently have no or limited revenue.

Consider reminding the representatives that:

  • The federal PPP program does not work for hospitality businesses as they are currently not able to bring back their employees quickly as contemplated by the federal bill to obtain forgiveness;
  • Interest-bearing loans, such as the federal EIDL program are problematic for hospitality businesses that already carry a significant debt load;
  • Hospitality businesses are at best bringing in 0-20% of their normal revenue, yet their financial obligations continue to come due (tax payments, rent/mortgage, utilities, insurance, vendor payments, etc.) and they have no means to pay them; and
  • We need state assistance now. In a recent survey, over half of hospitality businesses projected they will be forced to close in the next one to three months at the current rate.
Alcohol To-Go Clarifications
Today the City of Minneapolis Health Department distributed incorrect information that restaurants with an on-sale license may sell certain amounts of beer  or  wine with to-go food orders. As we communicated on Monday, the law allows businesses to sell beer  and  wine with an order. We corrected this matter with the State Department of Public Safety on Monday, and now today corrected it with Minneapolis.

We’ve gathered further clarification on two additional issues: hours of sale and room service at hotels and resorts.

Hours of sale . Given that restaurants would normally sell through an  on-sale  license, many have questioned if their to go sales could follow those hours. Unfortunately not, the Department of Public Safety has confirmed that the newly allowed to-go sales are  off-sale  and so governed by Minn. Stat. 340A.504, which states:

Subd. 4. Intoxicating liquor; off-sale.
(a) No sale of intoxicating liquor may be made by an off-sale licensee:
(1) on Sundays, except between the hours of 11:00 a.m. and 6:00 p.m.;
(2) before 8:00 a.m. or after 10:00 p.m. on Monday through Saturday

Room Service at Hotels and Resorts.  Regarding what is currently allowed regarding room service for hotels or resorts under executive order 20-04 , a lodging facility with an off-sale license may provide a  sealed  alcoholic beverage to a guest in their room per the terms of the off-sale license and laws related to off-sale. The only way that a hotel or resort can provide alcohol to-go via its restaurant through an on-sale license would be  with a food order  per the terms of the new law. Unfortunately, the law does not yet allow for sale of tap beer or mixed drinks.
In the News
Our Member Updates are generally sent to members only. In the interest of public health and the health of our industry, we encourage you to share this update widely. Additional resources can be found on our  website  and through our social media posts on   Facebook , LinkedIn  and  Twitter .