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Dozens of Pa. companies received federal loans meant to save jobs, but laid off workers anyway | FOX43 Reveals

Paycheck Protection Program loans were intended to help companies pay their employees during coronavirus shutdowns. Some loan recipients still laid off workers.

HARRISBURG, Pa. — Tens of thousands of companies across Pennsylvania received loans from the federal Paycheck Protection Program (PPP). The money was intended to help companies pay their employees during coronavirus shutdowns. The loans were forgivable as long as 60 percent went to payroll expenses.

Yet, thousands of Pennsylvanians lost their jobs anyway. FOX43 Reveals that their employers received PPP loans and still laid off workers.

“The intention was to keep people employed. It was to avoid unemployment,” said Katharine Cristiani, Executive Vice President for Unite Here Local 274–a union representing hospitality workers.

Many union members were laid off during the pandemic, despite their employers receiving millions of dollars in federal bailouts.

“To find out that their employer took money from the government, their tax money, with a commitment to keep them employed and then didn’t fall through on that commitment is really disheartening and upsetting to people,” Cristiani said.

PPP loans were touted as a “job-saving program,” but many companies did not use the money to keep workers on the payroll—a requirement for the loan to be forgiven.

In March 2020, Luz Paredes was laid off as a housekeeper at the Sheraton Great Valley Hotel in Frazer, Chester County. A few weeks later on April 3, her employer received between $1 million and $2 million in PPP loans.

“They haven’t given us any type of incentive. They haven’t given us any type of raise. They never said ‘Oh, we received this money and it’s for you.’ They haven’t given us absolutely anything at all,” Paredes said.

GF Hotels & Resorts, which owns the hotel, has not responded to FOX43 Reveals’ requests for comment. The U.S. Small Business Administration initially told FOX43 Reveals companies that laid off employees would have to pay the loans back with interest.

“If that’s the case, then they’re not going to get that loan forgiven and actually they shouldn’t have applied for it to begin with,” said Steve Bulger, former SBA Regional Administrator for the Atlantic Region 2 & Mid-Atlantic Region 3.

FOX43 Reveals cross-checked state layoff notices with federal PPP data. Forty companies statewide laid off at least 4,200 workers despite collectively receiving nearly $70 million in PPP loans.  Those employees included restaurant servers, manufacturing workers, and hotel staff.

Cristiani said hotels are now becoming busier than ever, but only a portion of employees have been hired back by their employers.

“I’m very concerned there’s going to be an attempt to eliminate jobs permanently and that the number of hotel jobs is going to go down in the long run,” Cristiani said. “I hope employers see the importance of getting back to high employment levels, ensuring that, in a sector that’s primarily black and brown workers, hardest hit communities, that those jobs can come back.”

Despite these layoffs, the Paycheck Protection Program did help hundreds of thousands of Pennsylvania workers keep their jobs during the pandemic.

These companies received PPP loans and issued layoffs:

Cameron Mitchell Restaurants received a $10 million PPP loan and laid off 90 workers.

Phelan Hallinan Diamond & Jones received a nearly $4 million PPP loan on April 12, 2020, and laid off 48 workers on March 27, 2020.

The Kimmel Center received between $2 million and $5 million on April 7, 2020. It did not specify how many workers were laid off in its state Layoff Notification/WARN notice.

The Franklin Institute received more than $2 million on April 14, 2020, and laid off 21 workers.

The Doubletree Hotel Center City received a more than $2 million PPP loan on April 27, 2020, and did not specify how many employees it would retain. The hotel laid off 126 workers.

Pond Lehocky Giordano, LLC received a $2 million loan on April 8, 2020, and laid off 76 workers permanently on June 1, 2020.

Parc Restaurant Partners received a nearly $2 million loan on April 11, 2020, and laid off 263 workers. According to PPP data, the employer stated the loan was used to retain 255 workers.

Fitler Club received nearly $2 million on April 6, 2020, to retain 271 employees. The company laid off 238 workers.

OTG Management received between $1 million and $2 million on April 28, 2020, and laid off 271 workers on March 16, 2020.

Hilton Garden Inn Center City in Philadelphia, formerly owned by GF Hotels & Resorts, received more than $1 million on April 3, 2020. Management laid off 106 workers on March 20, 2020.

El Vez restaurant in Philadelphia received a nearly $1 million loan on April 10, 2020. The restaurant laid off 172 workers permanently on March 23, 2020.

Talula's Garden in Philadelphia received a nearly $1 million PPP loan and the restaurant laid off 149 workers on March 23, 2020. 

The Bunker LLC, which is doing business as The Love in Philadelphia, received $811,480 in PPP loans on April 10, 2020. The restaurant laid off 113 workers on March 23, 2020.

The Dandelion restaurant in Philadelphia received nearly $1 million and laid off 118 workers.

Costar Partners, which runs the Buddakan in Philadelphia, received a nearly $1 million PPP loan on April 11, 2020, and laid off 97 on March 16, 2020.

SBI Restaurant Partners, which owns the Butcher and Singer, received between $350,000 and $1 million on April 10, 2020, and laid off 91 workers on March 16, 2020. According to PPP data, the loan was used to retain 96 employees.      

Barclay Prime, received between $350,000 and $1 million and laid off 79 workers.

Chestnut Street Venture, doing business as Morimoto in Philadelphia, laid off 85 restaurant workers on March 23, 2020. The company received between $350,000 and $1 million on April 10, 2020.

Sansom Restaurant Group Partners, doing business as Pod, laid off 71 workers on March 23, 2020, and received between $350,000 and $1 million in PPP loans on April 11, 2020.

1623 Restaurant Limited Partnerships, doing business as Alma de Cuba in Philadelphia, received between $350,000 and $1 million on April 10, 2020. The restaurant laid off 78 workers on March 16.

700 Chestnut Restaurant, doing business as Jones, laid off 72 workers on March 23, 2020, and received between $350,000 and $1 million on April 10, 2020.

Big City Restaurant Group received between $350,000 and $1 million on April 10, 2020 for El Rey in Philadelphia. The restaurant laid off 78 workers on March 23, 2020.

Bierfish Restaurant Partners received between $150,000 and $350,000 on April 10, 2020, for Frankford Hall in Philadelphia. The company laid off 50 workers on March 23, 2020.

Continental Restaurant Partners, doing business as The Continental Restaurant and Martini Bar in Philadelphia, laid off 83 workers on March 23, 2020. The company received between $150,000 and $350,000 in PPP loans on April 10, 2020.

Select Restaurant Partners received between $150,000 and $350,000 on April 10, 2020, for Pizzeria Stella in Philadelphia. According to PPP data, the loan was used to retain 54 employees. The restaurant laid off 42 workers on March 23, 2020.

City Winery in Philadelphia received between $150,000 and $350,000 on April 9, 2020 to retain 113 employees. On June 21, 2020, the restaurant laid off 79 workers permanently and 64 temporarily.

Back on South Restaurant Partners, doing business as Serpico in Philadelphia, laid off 31 workers on March 23, 2020. The company received a $150,000 to $350,000 PPP loan on April 10, 2020.

Fette Sau restaurant in Philadelphia received between $150,000 and $350,000 in PPP loans despite laying off 22 workers.

Our Lady of Fatima in Delaware County laid off 91 workers on May 7, 2020 and received between $150,000 and $350,000 in PPP loans.

Cheetah Chassis Corporation in Berwick, Columbia County, received between $1 million and $2 million on April 11, 2020, to retain 147 employees. The company laid off workers on June 29, 2020. It did not specify how many workers were laid off in its state Layoff Notification/WARN notice. 

Snyder's Gateway, Inc. in Breezewood, Bedford County, received between $1 million and $2 million on April 15, 2020, to retain 155 employees. The company laid off 66 workers.          

Scott's Corporate Services in Erie received between $350,000 and $1 million on April 15, 2020. The company did not specify how many employees it would retain using the loan. The company laid off 27 workers at the Comfort Inn on March 16, 172 workers at Scott’s Splash Lagoon on March 16, 37 workers at Hawthorne Suites on March 20, and 86 workers at Scott’s Hot Cakes/IHOP on March 22, for a total of 322 workers.

Eat’n Park Hospitality Group, which operates Parkhurst Dining Locations laid off 335 between March 6, 2020, and March 17, 2020. Impacted locations including Meadville, Pittsburgh and Gwynedd Valley. The company received a $5 million to $10 million PPP loan on April 3, 2020, to retain 500 employees.

Hudson Group in Mercer County received between $350,000 and $1 million on April 9, 2020, to retain 33 employees. The company laid off 74 workers.

Marty Sussman Organization in Montgomery County, which operates five different car dealerships, laid off 137 workers on March 20, 2020. The company received between $350,000 and $1 million on April 14, 2020.

American Medical Depot in King of Prussia received a more than $2 million PPP loan. The company did not specify how many workers were laid off in its state Layoff Notification/WARN notice. 

Amazon delivery contractor Prime EFS, owned by Transportation and Logistics Systems Inc. in Langhorne, laid off 114 workers after receiving a nearly $3 million PPP loan.

DeliverOL Global, also owned by Transportation and Logistics Systems Inc., received a $2.5 million PPP loan and laid off 41 workers.

Novum Pharmaceutical Research Services in Pittsburgh laid off workers on March 23, 2020. The company did not specify how many workers were impacted, despite the state making an attempt to contact the company regarding this information. The company received a more than $3 million PPP loan on April 16, 2020.

The YMCA of Reading and Berks Counties laid off 228 workers on April 1, 2020. The organization received between $1 million and $2 million in PPP loans on April 6, 2020, to retain 254 employees.

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