Landry's CEO Tilman Fertitta asks Trump to set aside PPP money for large restaurant chains
Fertitta asked for "a category for the larger private restauranteur" that would put funding "in a different bucket" to avoid taking PPP money from small businesses.
Landry's CEO and Houston Rockets owner Tilman Fertitta says while bringing the Paycheck Protection Program through the Small Business Administration was 'an unbelievable idea,' he explains how he couldn't take advantage of the program because he's a billionaire.
During President Trump's meeting with restaurant industry executives at the White House on Monday, Landry's CEO Tilman Fertitta urged the president to offer more help through the Paycheck Protection Program to large restaurant chains impacted by the coronavirus pandemic.
Fertitta told the president that the coronavirus has been “devastating” for his company, resulting in 40,000 employees from his chain of full-service restaurants being laid off in March. He asked if the administration would consider adding "a category for the larger private restauranteur" that would put funding "in a different bucket" so that larger restaurant chains aren't taking PPP money away from struggling smaller businesses.
"I don't have the ability to put those 40,000 people back to work," Fertitta said. "So I just wish that, don't add any money, but just divide it up."
RESTAURANTS STRUGGLE WITH RENT UNDER CORONAVIRUS RESTRICTIONS IN NEW YORK CITY
Tilman Fertitta, chairman and CEO of Landry's Inc., speaks during a meeting with restaurant industry executives about the coronavirus response, in the State Dining Room of the White House, Monday, May 18, 2020, in Washington. (AP Photo/Evan Vucci)
The billionaire acknowledged that he recently borrowed $300 million at 12 percent interest from the PPP because he “needed the liquidity to keep the company afloat”, but he decided to return the money, saying that he had been criticized for the layoffs, but was worried he would be perceived as “that billionaire who took the money from the little business.”
“I took the money and sent it back,” he said. “And didn’t spend a dollar of it.”
RESTAURANTS RAISE PRICES AS CORONAVIRUS FORCES MEAT SHORTAGE
Treasury Secretary Steven Mnuchin said it was “a complicated issue", and that while he was sympathetic, the Paycheck Protection Program is "for companies that were not necessarily quite as big.”
But Trump, who called Fertitta a long-time friend, said he had a "unique situation" and the administration would look into it.
"If he had 600 owners and he franchised them out or something, but he had 600 owners, they qualify. If he has, you know, if he owns it, it's a different situation," Trump said. "I can understand what he's saying. So let's take a look at it."
Landry’s, which operates well-known restaurants like Del Frisco’s, Rainforest Cafe and Bubba Gump Shrimp Co., owns 600 restaurants across 40 states.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
The news comes the same day restaurant executives asked for the administration to change the rules of the Paycheck Protection Program so that they have more time to spend the money from their loans in rehiring employees.
Under the plan’s current rules, loans are forgiven as long as borrowers spent 75 percent on payroll within eight weeks of getting the money and only 25 percent of the loan can be spent on rent, mortgage interest, and utilities. Executives are asking the White House and Congress to extend the period to at least 24 weeks.
“If those changes are made that will be the thing,” said the Independent Restaurant Coalition's Will Guidara, the restauranteur behind New York’s Eleven Madison Park. “We need to build the house first.”
The restaurant industry expects to lose $80 billion in sales by the end of April and up to $240 billion by the end of 2020 and 61 percent of operators say existing federal relief won’t prevent more restaurant layoffs, according to a recent survey by the National Restaurant Association.