For Nelson’s Catering, the COVID-19 pandemic was an economic disaster but one that the longtime Springfield business survived.
Sales were down 80% in 2020 after the pandemic hit Illinois in March of that year. Receipts in 2021 were 60% below previous norms. Even in 2023, when hospitals saw big drops in COVID-19-related admissions and deaths, and vaccines and new medical treatments made people more comfortable gathering in groups, sales were still down 15%.
“It was desperate times,” said part-owner Mindy Beeler, who works as an event planner at Nelson’s, 3005 Great Northern Road.
The 29-year-old business, which serves food prepared in Springfield to customers in 50 central Illinois counties, remained in business by scrambling and capitalizing on its name recognition and good reputation, Beeler said. A few competitors went out of business, as well, and Nelson’s earned some new customers, she said.
Funding from the federal Paycheck Protection Program helped Nelson’s retain full-time staff, she added. The $50,000 grant Nelson’s received in 2023 from the Illinois Department of Commerce and Economic Opportunity’s Back to Business program didn’t mean life or death for the company, but she said the money was appreciated.
“We are spending on equipment replacements and raising hourly pay to retain good employees,” Beeler said.
The money – part of federal funds funneled through DCEO – was used for employee wages and training programs to deal with the turnover in the hospitality industry that increased during the pandemic, she said. Nelson’s also used the money for advertising and set aside some for future replacement of its fleet of aging vans.
Beeler said Nelson’s would welcome more rounds of grants, though whether more money will materialize from Congress or the Illinois General Assembly is uncertain as attention to the long-term impact of the pandemic wanes.
“I don’t think the government realizes the enormous need in the hospitality industry,” she said. “Labor costs have gone through the roof … and we’ve had to boost prices because of food costs.”
More financial help is needed; that’s undeniable, according to Sam Toia, president and chief executive officer of the Illinois Restaurant Association.
But Toia said: “Every little bit helps. The B2B program provided by Gov. (JB) Pritzker and the Department of Commerce and Economic Opportunity definitely was a vital lifeline for businesses. The support helped stabilize the finances of small businesses.
“For a lot of restaurant owners and food service operators, it wasn’t a ‘grand slam,’ but it was a solid ‘single’ or ‘double.’ … These grants kept thousands of people employed who would have lost their jobs or lost hours without it.”
DCEO officials declined Illinois Times’ requests for interviews, but DCEO spokesperson Eliza Glezer said in an email that DCEO has allocated about $1.5 billion in pandemic-related support for businesses and local governments, including $406 million in Back to Business programs and $286 million in Business Interruption Grants.
All of the funding for B2B programs and the BIG program came from federal American Rescue Plan funding, Glezer said.
The governor said in a March 2023 news release: “In the three years since COVID-19 brought our state, our nation and our world to a standstill, Illinois businesses have come back swinging – in part thanks to our Back to Business program. My administration is committed to helping small business owners move past survival and onto long-term success.”
The B2B programs, based on legislation passed by the General Assembly, provided federal relief funding to restaurants, hotels and the “creative arts” industry both during and after some of the worst months of the pandemic, Glezer said.
“Businesses have made incredible strides,” she said, “but these industries were disproportionately impacted due to the nature of their businesses.”
Hospitality industry still struggling
Toia and Michael Jacobson, president and chief executive officer of the Illinois Hotel & Lodging Association, said many businesses in the hospitality industry, a major part of the state’s economy, will require years to recover.
They said many businesses are still struggling because of the debt they had to take on and the inflation, increased competition for workers and higher payroll costs they now must contend with as society emerges from the pandemic.
The restaurant and food-service industry in Illinois accounts for more than $30 billion in annual sales. Before the pandemic, the jobs total in Illinois was 596,000 and has now declined to 569,000 jobs, though the number is still increasing monthly, Toia said.
The food-service industry saw average revenue declines of 28% during the 2020-2022 period, he said. Revenues have increased since then, but many customers haven’t returned. Part of the revenue increases reflect higher prices that businesses have had to charge, and that trend, in itself, can deter potential patrons, Toia said.
Inflation in all sectors of society means many customers don’t have as much disposable income to eat out, he said.
The B2B arts and B2B restaurants and food service grant awards were determined based on revenue declines, as reflected on tax returns, with the maximum restaurant and food service awards set at $50,000. The hotel funding was allocated based on the number of guest rooms.
Springfield businesses were happy to receive the help, said Mike Murphy, president and chief executive officer of the Greater Springfield Chamber of Commerce.
“Lots got significant money that would help them with the challenges they faced the last couple of years,” he said.
Tim Timoney, part-owner of Corner Pub & Grill, 3271 W. Iles Ave., said the Springfield business employed as many as 48 people, most of them part time, before the pandemic, and all but 18 were laid off after the pandemic hit.
“I tried to keep as many employees employed as possible,” he said.
Timoney, a Springfield resident, said money from the PPP program and federal Employee Retention Credit provided cash flow to help achieve that goal and to provide a tent, and later a mostly enclosed patio, so Corner Pub could serve as many customers as possible while complying with state operating restrictions that were designed to reduce the spread of COVID-19.
The $50,000 B2B grant that Corner Pub applied for and received was used for operating expenses, Timoney said. Food costs have gone up, he said, and the recent hike in the state’s minimum wage to $14 per hour has only increased the upward pressure on payroll costs for his workers.
Corner Pub’s number of employees has almost returned to pre-pandemic levels, but there’s more turnover now and fewer people applying for jobs. “I have no idea why,” he said.
Timoney said he appreciated the grant. “Everybody could use more money,” he said, adding that the grant helped him avoid passing more of his costs on to customers through higher prices.
Toia commended DCEO for trying to make sure the grants included women-owned and minority-owned businesses that “historically have had a harder time accessing capital. So we were very grateful for that. The feedback we have received has been very positive.”
In Springfield, food-service businesses receiving $50,000 grants included Boyd’s New Generation, 1831 South Grand Ave. E.; Top Cat’s Chill & Grill, 3211 E. Sangamon Ave.; Sky Lounge, 3254 W. Iles Ave.; and Charlie Parker, 700 W. North St.
Creative arts groups that received B2B funding included the Dana-Thomas House Foundation ($95,000), Springfield Municipal Opera ($35,000), Illinois State Museum Society ($55,000), Illinois Symphony Orchestra ($50,000), Illinois State Historical Society ($45,000), Springfield Ballet Company ($25,000) and Legacy Theatre ($20,000).
A questionable grant
Tenoch’s Tamales, a business that listed its address as a mailbox rented at Box & Go, 3309 Robbins Road, Springfield, received a $30,000 grant, but it’s unclear whether the business has operated in the Springfield area. Neither Tenoch’s nor the owner has obtained a food-service permit required to operate in Sangamon County, according to county officials.
Tecoch’s Tamales is a sole proprietorship operated by Ann Marie Sartain, according to information provided by DCEO in response to an Illinois Freedom of Information Act request from Illinois Times. The business only recently established a basic web page.
But the state agency refused to provide personal addresses and what it called “confidential taxpayer and financial information,” citing a section of the FOI law.
Tenoch’s Tamales “provided all required documentation and information for this program,” Glezer wrote in her email. That information, she said, included tax returns for 2019, 2020 and 2021, reflecting business income for all three years and showing a loss during the pandemic.
The business also provided “the appropriate licensure to serve food or beverage,” which, in the case of Tenoch’s Tamales, included an active permit for Sartain from the Illinois Department of Public Health to serve food.
Glezer indicated that Tenoch’s Tamales doesn’t operate out of a bricks-and-mortar address. When asked why it was appropriate for the business to list an address at a Box & Go, she replied, “It’s important to note that mobile businesses, food trucks, etc., operate differently than brick-and-mortar restaurants, and it is reasonable for mobile businesses to provide (a) P.O. box as an address given that they travel throughout regions and/or the state.”
Sartain said in a Dec. 10 email to Illinois Times, in response to a request for an interview sent to the business’ email and rented mailbox, that she lives in Chicago and “decided to go into business for myself with the encouragement from my girlfriend, who is a chef, having made tamales since 2012 for friends and families as holiday gifts and for parties.”
She said her girlfriend lives in the Springfield area.
Sartain said she “started my business in Springfield with a dedicated business address to become official and because some places don’t allow you to use your home address as a business address.”
Sartain said she has been “fortunate enough to be able to cook for people between Springfield and Chicago.” It’s unknown whether she has obtained legally required food permits in counties where she has operated. She didn’t respond to a request for further comment.
Sartain said in her email that the B2B grant program “is a godsend to businesses.” She added that she was surprised by an Illinois Times reporter’s lack of understanding of “how immigrant businesses and sole proprietorships like tamaleras across the country can not only survive but thrive through word of mouth and consistent quality.”
A deep hole for hotels
In the hotel and convention industry, many businesses benefited from the PPP and federal employee retention credit programs, but recovery in the form of convention-goers and hotel rooms booked has varied by region of the state, said Jacobson of the Illinois Hotel & Lodging Association.
“Everybody’s still going through PTSD,” Jacobson said. “Some hotels were closed for up to 18 months. It’s going to take more than three years to dig out of that hole.”
There are more than 1,500 hotels in Illinois, and the hotel industry generates $51 billion in annual business sales and $8 billion in federal, state and local tax revenues, Jacobson said. The B2B grants to hotels, which were awarded in 2023, provided an average of $866 per guest room to eligible hotels, he said.
The largest recipients of B2B hotel grants in Sangamon County didn’t return phone calls seeking comment. They were Wyndham City Centre, 700 E. Adams St., Springfield, which received $321,410; Hilton Garden Inn, 3100 S. Dirksen Parkway, Springfield, which received $101,911; and Route 66 Hotel & Conference Center, 625 E. St. Joseph St., Springfield, which received $92,329.
Jacobson said 70% of Illinois hotels are owned by small business owners. The B2B program helped some hotels avoid going out of business because of the pandemic, though many are selling for “pennies on the dollar” because of the debts incurred by their owners.
Darin Dame, president of the Springfield Hotel and Lodging Association, said some area hotels have devoted their B2B grants to help them afford delayed maintenance projects.
“Anytime you get money, it is a big help, especially for the large hotels,” he said.
Many local hotels went 12 to 15 months with little or no revenue and incurred significant debt at the beginning of the pandemic.
Hotel occupancy in Springfield has almost returned to pre-pandemic levels, he said, but many hotels continue to dig themselves out of debt.
Dame is a partner in SpringHill Suites by Marriott, an 80-room hotel at 3921 S. MacArthur Blvd. in Springfield. SpringHill earmarked its $69,682 B2B grant for payroll and benefits, he said.
The improvement in cash flow allowed the ownership group to make extra payments on the property’s mortgage to make up for reduced payments during the pandemic, he said.
Employment at the hotel, which has about 30 workers, is back to the pre-pandemic level, he added.
New funding for new businesses
The Illinois Hotel & Lodging Association doesn’t plan to push for more grant funding for its members during the spring 2024 session of the General Assembly. The state’s federal pandemic recovery funds have largely been depleted, Jacobson said.
The association instead will focus on legislation to continue promoting Illinois as a business and leisure tourism destination and minimizing government intrusion on hotel operations, he said.
Toia said the restaurant association will renew its push in the legislature this spring for more assistance for food-service businesses.
“Can we get there? I don’t know,” he said. “Everyone’s trying to take a bite at the apple.”
Pritzker and DCEO announced in November that they would make an additional $25 million available, through individual grants of up to $30,000, for new businesses that launched in 2020 or 2021. The deadline for applications is Jan. 11.
A DCEO news release said the Back to Business NewBiz program is justified because businesses that started up during the first two years of the pandemic and remain in operation “have faced significant impacts during the pandemic, but they have not been eligible for other federal or state relief programming since they were not operational prior to the pandemic.”
The Democratic governor said in the Nov. 16 news release, “Small business owners contribute to our thriving state economy every day, often taking on enormous risk to do so – but no business owner could have been prepared for the effects of the COVID-19 pandemic.”
Glezer said DCEO has no plans for future B2B rounds of grants to support businesses.
Beeler, the Nelson’s Catering event planner, said December 2023 was the first time the business employed a full staff of caterers, though corporate sales are still down 20% from before the pandemic, and the market demands the business pay more for staff.
“We hire at $16 to $18 an hour now. We used to hire at $12 to $14 an hour,” she said. “You still have a lot of companies that don’t have as many people in the office. Companies that used to order meals for 50 people now order for 15 or 20 people.”
Dean Olsen is a senior staff writer at Illinois Times. He can be reached at dolsen@illinoistimes.com, 217-679-7810 or twitter.com/DeanOlsenIT.
This article appears in Getting back to business.
