Milwaukee-based theater and hotel giant, Marcus Corp., is a great example of who the PPP was meant for, and should have gone to: real small businesses.
In April, publicly-traded Marcus Corp. received $11 million in federal Paycheck Protection Program money. But the money was designed for small businesses, those with less than 500 employees.
When some questioned Marcus Corp.’s receival of the money, considering they have 7,500 employees on their payroll, Marcus Corp. said it “would keep up to 1,500 employees on the company’s payroll for up to three months,” as if that meant the money wasn’t better off in the hands of real Wisconsin small and family-owned businesses.
From reporting by Wisconsin Public Radio, guidance was released in May that companies that had access to funding outside of the PPP should return the money. This made Marcus Corp.’s refusal to return the funding more damning, considering that the company had also received “a new $91 million bank loan in April to help […] deal with the economic effects of the COVID-19 pandemic.”
Nevertheless, Marcus Corp. has backed down on their promise to maintain staff levels for three months. According to the article, “Marcus Corp. will permanently lay off 425 workers at hotels in Milwaukee, Madison and Lake Geneva as the coronavirus pandemic continues to affect the tourism industry. Workers will lose their jobs at the end of July, when a federal aid package adding $600 to weekly unemployment benefits is set to expire.”
Why did the Fed not step in for a case as egregious as this? Not only did Marcus Corp. clearly not fit within the parameters of a PPP recipient, but they now will have to pay back their PPP funding just like any other loan. That money, which was uniquely protected under COVID-19 regulations, could have gone to a small business owner that kept their payroll, got the loan fully forgiven, and subsequently stayed afloat.
In this case, the previously “paycheck-protected” money has been wasted. You can read the full piece in WPR and how Marcus Corp. executives are responding — or not responding — to the matter here.