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Fine Print Makes Iolani Palace Ineligible for $16B Shuttered Venue Grant Program

Cory Lum/Civil Beat

Iolani Palace’s financial struggle due to the pandemic appeared to find a lifeline in the $16 billion Shuttered Venue Operators Grant program run by the Small Business Administration, but the fine print makes the National Historic Landmark ineligible to receiving funding.

The palace closed in March 2020 along with museums and event venues across the country, causing industry layoffs and millions lost in revenue. It reopened in June, but it only had enough money to operate for a few months.

Paula Akana, executive director of the Friends of Iolani Palace, started her position in summer 2019.

"There wasn’t any endowment here at the palace when I came in. So when the pandemic hit, we were really just devastated financially and mentally by everything that was going on," she said.

The palace recently had its first Paycheck Protection Program loan forgiven by the SBA and it applied for the second round, Akana said.

Community donations have also helped, but Akana said the funds usually last for a couple of months and then they have to put out a call again.

Akana said the palace was pretty excited about the new $16 billion grant program because the money is unrestricted and does not have to be paid back.

The palace would have received $1.5 million, probably lasting them until summer 2022, Akana said.

“Then they released the information on it and you have to have a video or lecture room, which we have here at Iolani Palace. But you have to have fixed seating and we can't have fixed seating in the palace," she said. "We probably could have put it in the barracks but it’s after the fact. We can’t do that."

Museums must have "at least one auditorium, theater, or performance or lecture hall with fixed audience seating and regular programming," according to the SBA.

She called the SBA and Hawaii's congressional delegation. The delegation asked for an exception as the palace is a National Historic Landmark, but the bill was unchangeable--signed into law in December.

“It was like, 'No, we can't make an exception.' It was really heartbreaking," she said.

Museums were pleased to even be included because the program was established mainly for live concert venues, she said.

“They added the museums in, but there wasn’t anything to say, ‘Hey that’s a wonky thing to write in there about museums.’”

Some people think the bill was trying to exclude roadside attractions, she said.

The state Senate has proposed adding more than $720,000 to the budget for next year. During the pandemic, the Hawaii Tourism Authority provided the palace $290,000 to help recover from a bee infestation in its tower and to repair the Coronation Pavillion.

"The state is definitely hurting, but we are too and I think they’re trying," Akana said.

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