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Payroll Protection Program: A lifeboat for LBK, but with some questionable holes in it

BLAKE FLEETWOOD
Guest Writer
blake@lbknews.com

Many well known Longboat Key businesses were kept alive by the federal Payroll Protection Program, but other LBK businesses, who got up to $2 million, have been hard to find.

Michael Garey of the world-renowned Lazy Lobster said that the $300,000 or so that he got from the PPP program was a lifeline for his restaurant.

“It’s hard to imagine what the hospitality industry would have done, if not for this program. We were able to stay open for lunch for May and June and half of July. 100 percent of the money we got was spent on our 43 employees.”

Other familiar restaurants which were kept alive by the program include Euphemia Haye, $150,000 – $350,000, to retain 47 employees, Dry Dock, $350,000 to $1 million, to retain 82 employees, and Harry’s, $350,000 – $1 million, employee retention unavailable.

Harry Christensen of Harry’s Deli, Restaurant and Corner Store said the program was extremely helpful and instrumental in helping his business and employees through a difficult time.

Michael Garey said there is no use pretending that there has not been much abuse in the program which was intended to help small businesses. “Banks were taking care of their big customers,” he said, “We had to go to Sabel Palm, a small local bank, because our regular bank, Bank of America, said they didn’t know anything about about the program.”

He is worried that a lack of future economic stimulus will put him once more on the brink. “The money is running out Sunday. We might be in trouble if the season doesn’t come back.”

According to the table above, 17 companies in LBK got PPP loans ranging from $150,000 to $2 million, but LBK News was not able to locate or communicate with half of them. Many of the companies do not appear to be the kind of businesses with jobs that PPP was intended to protect. They do not have web sites or listed phone numbers. Some promised in their applications to retain only zero to three jobs, yet still collected millions of dollars from the government.

For example, Sphyraena Ventures LLC  got up to $2 million to retain three jobs, according to their Small Business Administration application. The listed location is 672 Marbury Lane — a small one-story home — and it appears to be run by Robert Spanos, though no information about him is provided. They have no listed phone number, no website, and no commercial location on LBK.

Stasin Properties was approved for a $1-2 million loan and is headquartered in Condo Unit 505 at 1425 Gulf of Mexico Drive at The Players Club. Stasin does not have a website nor a phone number that can be easily accessed. Ned Sinder, who is associated with the company, could not be reached at the phone numbers listed because they were disconnected.

On the SBA applications, both Sphyraena and Stasin Properties are listed as “self-employed” and appear to be in real estate. Both applications were approved through Kabbage Inc., an online lending platform.

Joe Whalen, who runs Prime Source, a commercial printer company, was approved for $350,000 – $1 million, for promising to retain 48 employees, yet only a few of the employees actually work on LBK.

The Paycheck Protection Program loan was designed to provide a direct incentive for small businesses crushed by COVID-19 to keep their workers on their payroll. SBA will forgive loans if all employee retention criteria is met, and the funds are used for eligible expenses. But the program has allowed many scammers to exploit the PPP’s $650 billion budget.

One example of such scammers is David T. Hines, who rushed out to buy a super-luxury Lamborghini Huracan Evo for $318,497 after he got a $4 million loan from the PPP program, according to authorities. Hines also spent thousands of dollars on dating websites, jewelry and clothes in Miami Beach. Fortunately, this spending was curtailed after a timely arrest by Federal investigators.

PPP loans are forgiven if they are properly used by businesses. Congress is considering another major SBA loan infusion as the growing pandemic continues to maim small businesses in Florida. Tourist towns, restaurants, and hotels are particularly vulnerable.

Despite the need to show economic injury due to the coronavirus shutdowns, many lawmakers charge that the government is not bothering to check the claims in applications.

For example, The Ritz-Carlton Sarasota, got a $5.1 million “hardship loan” through PPP at KeyBank. Its owner got $126 million for other businesses, and is not giving it back. However, some companies facing bad publicity, have turned down their approved loans, including the LA Lakers.

PPP loans are a lifeblood for millions of small businesses trying to stay afloat in these catastrophic times, according to Michael Garey. If the government doesn’t come up with a stimulus plan for the next phase of this pandemic, many small tourist businesses will find themselves in a torturous death cycle.

About the LBK 34228 data in the table on page 1:

The data in this database was released by the SBA and includes all approved, active Paycheck Protection Program (PPP) loans worth $150,000 or more. Dollar amounts represent loan amounts approved by lenders and not necessarily the amount disbursed to businesses.

For loans worth less than $150,000, the SBA has not  released anonymized data by state or town.

While we have attempted to clean this data, it may still contain errors. If you identify information that you believe to be incorrect or outdated please let us know.

Sources: Small Business Administration, US Census Bureau, Internal Revenue Service, Bureau of Labor Statistics

Blake Fleetwood was a reporter for The New York Times and has written for The New York Times Magazine, New York Magazine, The New York Daily News, the Wall Street Journal, and USA Today.

 

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