Big churches, elite law firms, private schools get COVID loans
Some of Palm Beach County’s biggest churches, elite law firms and private schools were approved for millions of dollars in federal aid under a loan program designed to help struggling businesses amid the coronavirus pandemic, while beloved local charities and restaurants mostly claimed six-figure loans, according to data recently released by the Small Business Administration.
Congress created the Paycheck Protection Program to help small businesses stay afloat and keep employees on the payroll during the coronavirus pandemic. Details of the $660 billion aid program recently released in response to pressure from Congress and the media reveal loans approved for well-to-do and well-connected businesses in Palm Beach County.
The identities of businesses approved for less than $150,000 were not made public. Employers approved for amounts over $150,000 and up to $10 million were named.
The data do not reveal the actual amounts for the loans but instead provide a range approved by the lenders. In some instances, businesses took out smaller loans than approved by lenders.
The loans were available to employers with fewer than 500 employees who could demonstrate economic injury due to the coronavirus business shutdown. Employers were also required to say how many jobs the loans would save.
In Florida, 393,028 loans totaling $32 billion saved 3.2 million jobs as of June 30, according to the SBA. Overall, 96 percent of the estimated small business payroll in the state was covered by PPP loans — the highest in the nation, according to SBA data.
Only three other states have received more money than Florida — California, New York and Texas. In Palm Beach County, loans of at least $150,000 kept an estimated 175,000 workers on the payroll.
The program came under harsh criticism when the loan pool ran dry and filings with the Securities and Exchange Commission revealed large, nationwide businesses with thousands of employees having received millions in loans.
Those returning loans included: Shake Shack, $10 million; Drive Shack $5.2 million; Fiesta Restaurant Group, owner and franchiser of Pollo Tropical and other fast food restaurants, $15 million; the Los Angeles Lakers, $4.6 million; and Ruth’s Chris Steakhouse $20 million, according to a list compiled by NBC News.
Law firms
In Palm Beach County, some of the biggest loans went to some of the best-known, well-to-do law firms.
The Gunster law firm, with offices in Palm Beach and West Palm Beach, qualified for one of the largest loans, up to $10 million. Clients of the firm include U.S. Sugar, FPL, AT&T and Well Fargo, according to the firm’s website. The loan was approved by one of Gunster’s own clients, Capital City Bank.
Gunster did not respond to a request for comment. The amount of the loan and how the firm used it is not known. According to SBA data, the loan enabled Gunster to retain 424 jobs.
Boies Schiller Flexner LLP, the law firm headed by high-profile litigator David Boies, was also approved for maximum loan of $10 million. The firm’s client list includes Facebook, the New York Yankees, Chevron and NASCAR.
Boise negotiated billion-dollar settlements for American Express in antitrust lawsuits and is best known in Florida for his unsuccessful representation of former Democratic presidential candidate Al Gore in the legal battle over the November 2000 election recount.
Although the firm has 14 offices throughout the United States and in London, the application was filed using one of its smaller office in Fort Lauderdale. A company spokesman said the company does not comment on its financials. The loan helped the firm retain 490 employees, according to SBA data.
The Jones Foster law firm in West Palm Beach was approved for a loan up to $2 million, which the firm said in its application would help retain jobs for 76 employees. Asked how much money the firm received and how it will be used, Lara Hillman, the firm’s marketing director, said the firm “preferred not to comment.”
Other local law firms receiving loans of up to $2 million included the West Palm Beach firms of Lewis, Longman & Walker, with five offices in Florida and Lytal, Reiter, Smith, Ivey & Fronrath. Neither firm replied to requests for comment.
Schools
Three of the county’s priciest and most exclusive private schools received the largest of the 47 loans that went to local private and faith-based schools.
The St. Andrews School of Boca Raton, The Benjamin School in North Palm Beach and Oxbridge Academy — which was founded by Palm Beach billionaire Bill Koch — qualified for maximum loans of $5 million.
The Benjamin School, attended by the children of golf legends Jack Nicklaus, Tiger Woods and Greg Norman, received a $3.1 million loan, according to a statement released by the school.
The school is a non-profit and employs 201 full-time faculty and staff. Tuition ranges from $18,150 for pre-k and kindergarten to $31,550 for high school. The school currently has $16 million in savings and cash investments, according to its website.
“Due to COVID-19, the school’s finances have been significantly impacted,” according to the statement. “By taking this loan, the School has been able to keep our teachers and staff employed during this time of uncertainty.”
Churches and faith-based schools
Nationwide, 88,411 religious groups received $7.3 billion in loans, saving 1 million jobs, according to the SBA. Local loans went to churches and schools representing a variety of denominations
Mega-Church Christ Fellowship received a loan between $2 million and $5 million, according to the public relations firm that represents the church. The church declined to disclose the amount of the loan or how it was used. On its loan application, the church said the money would save the jobs of 448 employees.
SBA data showed that Grace Fellowship, a church affiliated with Berean Christian School, qualified for $10 million loan. However, an employee of the church said the church was not approved for that amount and received only a “small fraction” of that total. The actual amount the church received is not known.
Seven Catholic schools, including Cardinal Newman High School, Pope John Paul II and Rosarian Academy, and three Catholic churches also received loans, along with the The Diocese of Palm Beach, which was approved for a $2 million loan.
Other churches, temples and synagogues that received loans include Bethesda-by-the-Sea Episcopal Church in Palm Beach, where President Donald Trump attends services, Temple Beth El in Boca Raton, Temple Torat Emet in Boynton Beach, the Reform Temple of Jupiter and Tequesta and Temple Emanu-el in Palm Beach.
Non-profit organizations
Traditionally, non-profits are not eligible to receive SBA-guaranteed small business loans but the PPP enabled many non-profit organizations to access loans to support their employees.
The Lord’s Place, one of the county’s leading agencies providing services to the homeless, was able to keep 141 employees on the payroll thanks to the $1.2 million PPP loan it received, said CEO Diana Stanley.
The pandemic forced the group’s thrift shop and catering businesses to close and with 20 percent of its staff former homeless clients at the center, Stanley said it was especially important to keep the paychecks coming.
“I don’t know what we would have done without it,” Stanley said. “We don’t want somebody working for us and then suddenly at front door needing services.”
Other essential community groups received far less. The Palm Beach County Food Bank, the Child Protection Team, Seagull Industries for the Disabled and COMPASS, an LGBTQ resource center in Lake Worth received loans under $350,000.
Big business
Two well-known local media companies whose leaders have ties to President Trump also qualified for seven-figure loans. Newsmax, the conservative media empire founded by Christopher Ruddy, a Mar-a-Lago member and friend of the president, received a loan between $2 million and $5 million.
Three companies owned by American Media Inc., publisher of the National Enquirer, the Globe, Men’s Journal and Soap Opera Digest, were approved for loans up to $5 million. AMI publisher David Pecker grabbed headlines in 2018 for his role in a catch-and-kill operation to buy exclusive rights to stories that might embarrass Trump, a longtime friend.
Neither Newsmax nor AMI responded to requests for comment.
Two large construction businesses in West Palm Beach also landed hefty loans. Both Kast Construction Company and Maschmeyer Concrete qualified for maximum loans of $10 million.
Maschmeyer CFO Randy Hough said they company does not comment on specific financial matters but said the loan enabled the company to keep all of its 400-plus employees working at full pay and benefits despite the company’s largest ever project being put on hold.
The loan also enabled the company to continue smaller projects that kept subcontractors on the job, Hough said.
“In many cases, our Team Members have shared with us that they are the only ones in their families still working,” Hough said.
Restaurants
From fine dining to lunch counters, restaurants have been especially hard hit by the pandemic. Nearly 300 restaurants and corporations owning multiple eateries filed for loans in Palm Beach County.
Only one, Duffy’s Holdings, qualified for a $10 million loan. Five others received loans up to $5 million. Overall, sixty-two percent received loans no more than $350,000.
The list receiving less than $350,000 includes Howley’s, the funky West Palm Beach diner that served thousands of free meals to unemployed food service workers even though its own doors were closed.
Buccan in Palm Beach, another notable restaurant that prepared and packed more than 75,000 meals for social service agencies during the early days of pandemic, qualified for a $1 million loan.
Data reporter Chris Persaud contributed to this story.