Houston experts: What business owners need to know about navigating government aid

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Now is the time to analyze and manage costs and investments, which will be crucial to capitalize on as we head into an upswing in business. Photo by Hero Images

Although the world may be going back to normal and it feels like we can see the light at the end of the tunnel, business owners across the country are seeing lasting negative effects of the COVID-19 pandemic on their companies. Especially in the restaurant industry, local business owners are having to rely on government aid to make sure employees and rent are paid, keeping stress levels very high.

Our company, Cerboni, is a financial firm that works with clients to relieve the burden business owners face by taking things like back-office work, inventory management and more off their plate to give them the freedom to focus on their trade. To help alleviate some of this stress, we are taking an in-depth look at some of the options available to business owners working to navigate government aid applications, along with opportunities for future prosperity.

Don’t let financial opportunities fall through the cracks

While business owners are often pulled in many directions, it's important to make sure you are taking advantage of any help that is available to you. Currently, the Restaurant Revitalization Fund, Employee Retention Credit and the Paycheck Protection Program are available to qualifying business owners. Taking the time to figure out which opportunities you should apply for and which ones are the best fit, will greatly benefit your company in the long run.

What to know about the Restaurant Revitalization Fund

The Restaurant Revitalization Fund provides funding equal to pandemic-related revenue loss up to $10 million per business and no more than $5 million per physical location for eligible restaurants, bars and other qualifying businesses where onsite sales to the public make-up at least 33 percent of gross sales receipts. Recipients have two years to use these funds, and the money can be used for business expenses such as payroll, mortgage obligations, rent payments, maintenance expenses, construction of outdoor seating and more.

The most important thing to know about this fund is how to calculate the funding amount. For those operating prior to or on January 1, 2019, applicants will calculate the 2019 gross receipts minus 2020 gross receipts minus PPP loan amounts. Applicants that began operations partially through 2019 should average the 2019 monthly gross receipts and multiply by 12, subtract 2020 gross receipts and then subtract PPP loan amounts. Businesses that began operations between January 1, 2020 and March 10, 2021, or those who have not yet opened but have incurred eligible expenses as of March 11, 2021, should calculate the amount spent on eligible expenses between February 15, 2020 and March 11, 2021, subtract 2020 gross receipts, then subtract 2021 gross receipts (through March 11, 2021) and, lastly, subtract PPP loan amounts.

Utilizing Employee Retention Credit

The Employee Retention Credit is a fully refundable tax credit for "qualified wages" paid to employers that were ordered to suspend operations fully or partially during 2020 or experienced a significant decline (below 50%) in gross receipts during the calendar quarter. The purpose of the Employee Retention Credit is to encourage employers to keep employees on payroll during the pandemic. Recipients can receive up to $5,000 for each full-time employee retained between March 13, 2020 and December 31, 2020 and up to $14,000 for each employee retained between January 1, 2021 and June 30, 2021. Qualified wages depend on the size of the operation. If the employer averaged more than 100 employees in 2019, the wages are only paid for the time the employee is not providing services. If the employer has less than 100 employees, the wages are paid to any employee during any period of hardship due to the pandemic. Recipients of PPP are not eligible for Employee Retention Credit.

Future prosperity

The restaurant industry was greatly impacted by the pandemic, but if you survived, you now have a great opportunity ahead of you. People are starting to return to a sense of normalcy and want to get back to enjoying things like events, shopping, eating out with friends and family and more.

Now is the time to analyze and manage costs and investments, which will be crucial to capitalize on as we head into an upswing in business. Understanding all of these financial nuances can seem daunting, so Cerboni can assist with knowing how to make the right investments in order to increase sales and profitability – this could be through marketing and advertising, changing up the menu to minimize cost of goods sold or managing operating costs.

For those who want to grow their footprint, the market is hot, and it's the perfect time to expand your market presence through negotiation of better lease terms and lower interest rates. Use this time to strategize on how to not only cut costs, but how to increase sales, and how to ultimately grow.

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Maria Degaine and Joshua Santana are co-founders of Houston-based Cerboni.

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Eli Lilly breaks ground on $6.5B pharmaceutical factory in Houston

lilly lands

Leading pharmaceutical company Eli Lilly broke ground today, Sept. 21, on its $6.5 billion manufacturing site at Houston's Generation Park.

The 236-acre, state-of-the art factory is expected to come online in 2030 and will manufacture Foundayo, the company's first synthetic oral GLP-1 medication, as well as other advanced therapeutics.

"We are thrilled to break ground on our latest ‘medicines made in America’ site in the great state of Texas," David Ricks, Lilly chair and CEO, said in a prepared statement. "This $6.5 billion investment will help change the game for tens of millions of people suffering from overweight, obesity and its consequences like diabetes. We will make and ship Lilly’s latest products from Texas to people here at home and around the world.”

Houston was up against more than 300 locations in the U.S. for the factory, as part of Lilly’s $50 billion investment in domestic medicine production that has launched 10 manufacturing sites since 2020. Lilly first announced Houston had been selected for the site last September.

Photo via gov.texas.gov

As Abbott mentioned, the site is expected to create hundreds of jobs, and will hire engineers, scientists, operations personnel and lab technicians once up and running. It will create 4,000 construction jobs while being built.

In an effort to support workforce development, Lilly also announced a $12.5 million commitment to Houston's San Jacinto College in addition to a $2.5 million charitable donation to the San Jacinto College Foundation. The funding will go toward hands-on training, equipment and facilities to support future technicians, operators, maintenance professionals, and other manufacturing talent, according to Lilly. The charitable donation will fund scholarships for students.

"This relationship will build a strong, sustainable talent pipeline for Lilly while creating meaningful, high-demand career opportunities across our region,” Brenda Hellyer, chancellor of San Jacinto College, said in the release.

"When you invest in a place like Houston, you invest in its people first," Edgardo Hernandez, executive vice president and president of Lilly Manufacturing Operations, added. "This facility will run on the talent of this community, powered by our relationship with San Jacinto College. We're hiring across the greater Houston area to help residents build careers close to home."

Rendering courtesy Eli Lilly

Lilly previously said it chose Generation Park, a 4,300-acre, master-planned commercial district near Lake Houston, because of factors such as financial incentives, access to utilities and transportation and the region’s business-friendly environment. Generation Park is home to campuses for San Jacinto College and Lone Star College.

Since Lilly first announced plans for the site, another fellow pharma giant has made plans to move into Generation Park. Bristol Myers Squibb Co. announced last month that it would build a $2.3 billion factory in the district. The site is expected to manufacture small molecule, biologic and antibody-drug conjugates and will also come online around 2030. Read more here.

UH Health names leader of new digital health institute

new exec

Recently launched UH Health has named the first-ever executive director of its new Institute for Digital Healthcare Transformation at the University of Houston.

Beto López has been tapped to lead the new initiative that aims to help develop and commercialize health care technologies centered around university research.

Launched in August, the Institute for Digital Healthcare Transformation leans on experts from UH’s engineering, medicine, business, law and other departments and will connect with industry partners. It will initially focus on mobile health applications, sensors, wearables and artificial intelligence, according to UH.

“Most digital health initiatives and commercialization efforts start with the technology and hope adoption follows. But the translation gap isn't a science problem — it’s a scaffolding problem between researchers, the community and the market,” López said in a news release. “I've spent the past 10 years building that scaffolding in places that weren’t wired for it, and I'm looking forward to building it here at UH to help ensure new health care technologies reach the people and communities that can benefit from them most.”

López previously spent 10 years at San Francisco-based innovation consultancy company IDEO, where he led over 100 projects for Fortune 500 companies and public agencies. He co-founded and served as managing director of the Design Institute for Health at UT Austin’s Dell Medical School; and also co-founded a social venture studio/venture capital fund focused on health care innovation. He worked alongside Houston’s Legacy Community Health during the COVID-19 pandemic.

“Beto understands that breakthrough technology alone doesn't transform health care — it has to be designed around the needs of patients, providers and communities and have a clear path into practice,” Jonathan McCullers, vice president for health affairs at UH, added in the news release. “His experience spanning academic health care and venture capital equips him to bring together researchers, health care organizations, entrepreneurs and investors. This makes him uniquely suited to lead this institute and help turn the university's innovation into solutions that improve people's lives.”

The University of Houston launched UH Health, its new cross-disciplinary academic venture, in July. It aims to bring together the university's health-related education, research and community impact under one umbrella.

ExxonMobil gets approval for $5B Texas Gulf Coast carbon capture project

CCS Expansion

Spring-based ExxonMobil has won approval from the Texas Railroad Commission for a $5 billion carbon capture and storage project in East Texas.

Dominic Genetti, senior vice president of CCS at ExxonMobil, told The Financial Times, which broke the news, that the Railroad Commission’s action is a “major milestone” that lets the company keep expanding along the Gulf Coast. In a 2-1 vote, commissioners authorized a carbon sequestration permit for the project.

“The Railroad Commission clearly recognizes the important role carbon capture and storage can play in meeting growing global demand for lower-carbon products while supporting new jobs and economic growth,” Genetti said.

The U.S. Environmental Protection Agency (EPA) approved ExxonMobil’s Rose CCS project last year.

The project will enable the company to inject about 53 metric tons of industrial customers’ carbon emissions into three underground wells it drilled in the Beaumont-Port Arthur area. Over a 13-year period, ExxonMobil plans to inject about 4 million metric tons per year into the Fleming and Upper Frio rock formations, according to Carbon Herald.

ExxonMobil says it owns the world’s first and largest CCS system, comprising 1,300 miles of CO2 pipeline and secure storage sites. Seventy percent of the pipelines are along the Gulf Coast.

The company ramped up its CCS business in 2023 with the $4.9 billion purchase of Denbury, which owned about 1,000 miles of CO2 pipelines.

“Our expertise, combined with Denbury’s talent and CO2 pipeline network, expands our low-carbon leadership and best positions us to meet the decarbonization needs of industrial customers while also reducing emissions in our own operations,” ExxonMobil Chairman and CEO Darren Woods said when the deal closed.

In January, Genetti wrote in a post on ExxonMobil’s website that the company is committed to CCS “for the long haul.”

“CCS is not new technology, but it’s flown relatively under the radar compared with the attention that production of hydrocarbons commands,” he wrote. “Now, as the world becomes more aware of the need to reduce emissions, CCS finally has a brighter spotlight and a broader runway to scale up.”

The company also announced this week that it has begun CCS operations at a direct reduced iron facility in Convent, Louisiana. The project will capture, transport and store up to 800,000 metric tons of CO2 per year, according to the company.

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This article first appeared on EnergyCapitalHTX.com.

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