Research institutes, tech companies and hotels were among the Midpeninsula’s biggest beneficiaries of the federal Paycheck Protection Program, with some recipients getting loans of more than $5 million, according to data released this week by the Small Business Administration and the Treasury Department.
While ostensibly targeting small businesses, the program also provided millions of dollars to large foundations, research firms and nonprofit groups focusing on health care and education, the data shows. The list does not include specific loan amounts but reveals the range.
The SETI Institute, a Mountain View-based organization dedicated to searching for extraterrestrial life, received a loan. Bill Diamond, president and CEO of SETI Institute, said the amount was $2.4 million. Many of its scientists work in research labs in NASA Ames Research Center in Mountain View, which has been shut down since mid-March, he said in an email.
“For these scientists, the inability to access labs means the inability to do much of their research, which in turn impacts their income and the indirect costs that support institute administrative and facilities expenses,” Diamond wrote. “As such, PPP funds have been used to maintain these researchers on full salary, where laboratory time has been replaced by proposal writing for new and continued research.”
Diamond also said that the loan funds allowed the institute to continue to lease its headquarters in Mountain View. Without the loan, he wrote, SETI would have undertaken “significant layoffs of both research and administrative staff.
“In our case the PPP funds precisely fulfilled the purpose they were intended for,” he said, adding that SETI expects to pay back as much as 20% of the loan that has not been used.
Other research groups also benefited from the business program. Institute of the Future, a nonprofit based in downtown Palo Alto, received between $1 million and $2 million, while Palo Alto Veterans Institute for Research got a loan between $2 million and $5 million. The Fogarty Institute, a medical research hub located at El Camino Hospital, received between $150,000 and $350,000.
Local developers were also on the receiving end of the aid program. Spieker Companies, a property manager that focuses on multifamily housing, received between $1 million and $2 million. Sand Hill Property Company, a major commercial and residential developer with various properties in Stanford Research Park, received a loan of between $350,000 and $1 million, as did Hohbach-Lewin, an engineering design firm.
In at least one local case, the federal data was incorrect. It stated that the Silicon Valley Community Foundation received a loan of between $2 million and $5 million, but in a statement, the foundation said that its loan was $259,756 and was for the nonprofit Raising A Reader. The foundation offers administrative support to Raising A Reader, which provides literacy and parental engagement programs. The foundation applied for a loan on Raising A Reader’s behalf.
In explaining the discrepancy, the foundation stated that the bank determined that it was eligible for a loan of more than $2 million, based on the foundation’s budget.
A full list of Midpeninsula beneficiaries of PPP loans can also be viewed online at tinyurl.com/midpen-ppp.
Menlo College, a private school in Atherton, also received a loan between $2 million and $5 million. The funds were used to maintain its personnel, according to a representative from the college.
“The pandemic is taking a significant toll on the finances of our school,” a Menlo College spokesperson said in an email. “The loan is therefore critical for us to continue educating our students. … We are grateful to have access to these funds.”
Embarcadero Media, the parent company of The Almanac, Palo Alto Weekly and Mountain View Voice, received a loan of $675,000.
The program also assisted numerous local restaurants, big and small. The British Banker’s Club in Menlo Park received a loan of between $2 million and $5 million, while Asian Box, which has locations at the Town & Country Village in Palo Alto and on Castro Street in Mountain View, received between $1 million and $2 million.
Three companies sharing the same P.O. box in Palo Alto and headed by Conrad Freeman, who owns 16 McDonald’s franchises along the Midpeninsula, also benefited from the federal program: Con-Lee Restaurants, named after Conrad and his wife, Lee Ann Freeman, got a loan of between $2 million and $5 million; Freeman Management received $150,000 to $350,000; and Con & Con Inc. received $350,000 to $1 million.
Palo Alto restaurants Fuki Sushi, Sundance Steakhouse and Protege all received between $350,000 to $1 million each, and Jin Sho, Café Pro Bono and Taro each got between $150,000 to $350,000.
According to the Treasury Department, the data covers nearly 75% of the loan dollars approved under the $660 billion program that federal lawmakers approved in March in response to the fallout from the COVID-19 pandemic and the ensuing economic shutdown. It only provides names of companies that have received loans of greater than $150,000, according to the department’s news release.
The nationwide organization Small Business Majority released a statement Monday saying that serious questions remain about how well the federal relief has served the “smallest, most vulnerable businesses” during the coronavirus pandemic, and that some struggling businesses have received a pittance through the PPP. It noted that in California, more than 2,500 small businesses received less than $1,000, including some receiving as little as $1.
“Underfunding has been a pervasive problem for borrowers since PPP launched,” according to the group. “About one in every four small businesses in our network have reported receiving a lower loan than what they requested. Many business owners received no explanation for why they did not receive the full loan amount, while others were told to accept less than what they would qualify for to move things through the process quickly.”
The majority of the most generous loans were approved in the early days of the federal relief program — either in April or early May — while the bulk of the smaller loans were dolled out in May and June. The first few weeks of the PPP were marked with frustration among small business organizations who felt that well-resourced companies had an edge, and that banks were either unhelpful or unprepared to handle an onslaught of loan applications.
