Federal lending program provided more than $590 million to more than 1,500 Sonoma County businesses

A zoo. A west county health clinic. An Anderson Valley casino. A Baptist Church in Windsor.

They are a few of the more than 1,500 small businesses, nonprofits and other firms in Sonoma County and the surrounding area that recently received more than $590 million through the U.S. Small Business Administration’s Paycheck Protection Program.

Congress approved the $669 billion federal assistance package for employers with 500 or fewer workers to retain their staffs and have a stronger chance of surviving the coronavirus pandemic. For businesses that use at least 60% of the windfall on their payrolls, they can turn the loans into grants they don’t have to repay.

In June, the SBA published a national list of any recipient who received from $150,000 to the maximum $10 million loan through the program to stem mass layoffs during the ongoing economic upheaval.

“We have seen every possible industry,” said Michael Sullivan, executive vice president of Santa Rosa-based Exchange Bank, which approved $260 million of the loans for area commercial customers. “There were some really interesting small businesses out there that I wasn’t that familiar with.”

The area list of recipients provides a window into how the program provided a critical financial lubricant in every segment of the local economy. There are of course the restaurants, brewpubs and retailers, many whose stories have been chronicled since the pandemic began in March. In addition, accountants, a steam-cleaning firm, a car wash, doctors, lawyers and many other enterprises selling products and services for local consumers and other businesses got money. Taken together based on their workforces when they secured the loans, the financial aid helped retain 64,000 area jobs.

That job retention number becomes even more significant when considering the county’s job losses, numbering many thousand, during the pandemic. The hope is many of these services jobs will come back at some point, but it’s clear there are an untold number of local positions that will be permanently eliminated.

The uniform reaction from loan recipients interviewed was the money provided a much-needed lifeline for their businesses.

“That was a major lifesaver I have to say,” said Nancy Lang, co-owner of Safari West animal park, which secured $1.2 million to help retain 150 jobs.

The animal park shut down on March 17 and furloughed some workers, but still needed others to help take care of its animals, ranging from its giraffes to hornbill birds.

Support staff also was critical. “Our phones still had to be answered because we had probably thousands of calls over the months that we were closed and people needed to keep in touch (and) cancel and reschedule reservations,” Lang said. “There’s so many calls and emails to find out what was going on.”

Safari West was able to reopen almost a month ago and should be able to manage through the summer since all of its activities are outside, she said.

Without the loan “it would have been difficult to get by,” and Lang and her husband might have had to take out a second mortgage, she said.

Only nine area businesses received between $5 million to $10 million. They included more well-known employers such as winemaker Francis Ford Coppola Presents, YGrene Energy Fund, Ghilotti Construction Co. and internet provider Sonic. The SBA didn’t disclose the specific loan amounts for firms in this or other high ranges.

O’Reilly Media in Sebastopol also received between $5 million to $10 million to retain 340 jobs. But that didn’t stop the company from implementing permanent layoffs of 75 employees, primarily workers from its conferences team who worked from the company's local and Boston offices. The company made its mark in technology book publishing and its now-defunct events business, but now has a digital focus.

“The activities that those employees were engaged in disappeared almost overnight, as we had to cancel all in-person events not just for the remainder of the year but for the foreseeable future,” Laura Baldwin, president of O'Reilly Media, said in an email, noting all cash flow from a $35 million line of business dried up, but not disclosing the amount the company received.

In fact, the publisher of the newspaper you are reading also was a beneficiary, as Sonoma Media Investments, parent company of The Press Democrat, received a $3.4 million loan that helped avert layoffs and retain 273 jobs. The money was critical to make payroll and helped provide a cushion since retail advertising has sharply declined.

“That loan was absolutely a lifesaver for this business,” said Steve Falk, the chief executive officer. “Half of our business is advertising based. Half of our business is subscription based. And the advertising base literally evaporated when retail establishments were forced to close.”

The company posted soft June revenue, but July so far looks promising, Falk said.

One bright spot has been the newspaper’s daily news and enterprise coverage of the local coronavirus outbreak, and its implications for the community, and that has driven a strong increase in digital subscriptions, he said.

Certain area business sectors have been affected by the pandemic to a greater degree, especially those that rely on drawing large numbers of customers inside their businesses. That’s the case with River Rock Casino near Geyserville that received between $2 million to $5 million to save 331 jobs.

David Fendrick, chief executive officer, said the loan was helpful yet the casino, owned by the Dry Creek Rancheria tribe still had to furlough employees. The tribe has maintained health insurance for those temporarily released, then brought most of them back when the casino reopened on June 29.

“It created a lot of stability for our employees and eliminated a lot of stress,” Fendrick said of the SBA loan, which he said was at the midpoint between $2 million and $5 million. “At the end of the day the people who benefited were the team members.”

Meanwhile, the federal pandemic relief provided a big boost to local nonprofits, with 84 of them each securing $150,000 or more.

West County Health Centers got a $3 million loan that will be turned into a grant to help retain 200 jobs for the community health clinic, said Jason Cunninghman, chief executive officer.

That money helped relieve some financial pressure for the clinic that sees about 15,000 patients annually. Because of COVID-19, about 80% of its patient visits are now on video or by phone, Cunningham said.

“What the PPP did for us is gain some strategic thinking, which made all the difference. We were able to say, ’How do we send all of our staff home? How do we invest in technology and video,’ which allowed us to quickly see patients,” he said.

That also applied to Catholic Charities for the diocese of Santa Rosa, which got a $2.1 million loan to retain 182 jobs. The nonprofit does a lot of contract work for federal and local government services and the reimbursement of such funding had slowed as a result of pandemic, said Jennielynn Holmes, chief program officer.

“When you're a nonprofit pinching every penny and being very thoughtful around the tight purse strings you have, the PPP helped us manage through those lags in reimbursement rates, and manage through the uncertainty of what funding was going to look like,” Holmes said.

The largesse from the federal government included loans less than $150,000, but the U.S. Department of the Treasury did not disclose those recipients. However, local bankers said most of the loans they approved were below the $150,000 threshold.

For example, Redwood Credit Union only had 9% of its 1,900 SBA paycheck loans exceed $150,000, said Ron Felder, chief financial officer. Its average loan through the program was for $68,000, he said.

You can reach Staff Writer Bill Swindell at 707-521-5223 or bill.swindell@pressdemocrat.com.

Area companies that received $5 million to $10 million loans from the U.S. Small Business Administration’s Paycheck Protection Program

Francis Ford Coppola Presents, Geyserville, 469 jobs retained

YGrene Energy Fund, Petaluma, 229 jobs retained

Star H-R, Petaluma, 400 jobs retained

Petaluma Health Center, Petaluma, 405 jobs retained

Vintage Wine Estates, Santa Rosa, 488 jobs retained

Ghilotti Construction Co., Santa Rosa, 348 jobs retained

Sonic, Santa Rosa, 500 jobs retained

O’Reilly Media, Sebastopol, 340 jobs retained

Royal City Bell, Sonoma, 500 jobs retained

Source: U.S. Small Business Administration