UNITE HERE Local 11 Asks Small Business Administration Questions Regarding $1.5 million in Paycheck Protection Program Loans to the Los Serranos Golf Club

CHINO HILLS, Calif.--(BUSINESS WIRE)--UNITE HERE Local 11 wrote to the Small Business Administration (“SBA”) regarding $1.5 million in PPP loans that the SBA authorized for Los Serranos Golf Club in Chino Hills, California with questions about these loans that cannot be answered on the basis of publicly available data.

JC Resorts manages Los Serranos Golf Club under a management agreement. As of June 16, JC Resorts listed job openings for the following positions at Los Serranos Golf Course: Food & Beverage Manager, Golf Shop Assistant, Banquet Bartender, Restaurant Food Server, Banquet Manager, Outside Services Attendant, Banquet Server, Steward (Dishwasher), Greenskeeper/Jardinero, and Line Cook. According to WARN notices filed with the State of California, “JC Resorts–Los Serranos” gave notice that it permanently laid off 29 employees from Los Serranos Golf Club effective August 10, 2020. These were among 547 permanent or temporary layoffs for which JC Resorts or entities with “JC Resorts” in their names filed WARN notices at various locations effective from June 15, 2020 to January 1, 2021.

According to data released by the SBA on March 2, 2021 and last updated June 1, 2021, Los Serranos Golf Club was approved for two PPP loans. Los Serranos Golf Club was approved for a $948,642 loan on May 1, 2020 tied to 103 jobs. The data states that $948,642 in loan proceeds were assigned to payroll at origination. Los Serranos Golf Club was approved for a second PPP loan on February 11, 2021, this time for $548,642 and tied to 72 jobs. The data states that $548,640 in loan proceeds were assigned to payroll at origination.

Los Serranos Golf Club is a California-corporation. JC Resorts is not identified in published information as having a connection with either of the PPP loans.

PPP loans are generally available only to entities that employed 500 employees or fewer. But large hospitality chains won an exception to this rule: entities with NAICS codes beginning in 72 (accommodation and food services) could receive loans for every location they operated that did not exceed 500 employees, even if together the firm employed more than 500 employees. At the same time, employers with the NAICS code for golf courses (713910) are not permitted to aggregate employees employed at different locations. In July 2020, the National Golf Course Owners Association wrote that although the golf course industry received 6,000 PPP loans, “we must realize that approximately 40% of our businesses failed to participate in the program, mainly due to being ineligible to meet the PPP loan criteria.”

Local 11’s letter to the SBA asked the following questions:

• Who actually employs the employees at Los Serranos Golf Club that served as the basis for nearly $1.5 million in PPP loans? JC Resorts? Los Serranos Golf Club?
• Could Los Serranos Golf Club be eligible for a PPP loan on the basis of employees employed by JC Resorts? What facts would need to be present for that to be so?
• What were the loan proceeds used for? If they were used to support payroll, whose payroll?
• Were the 29 employees that JC Resorts reported as laid off effective August 10, 2020 among the 103 jobs to which the May 2020 PPP loan was tied?
• Would JC Resorts be subject to the 500 employee limit for all locations as a golf course operator, or can it avail itself of the rule for accommodation and food services?
• Given that WARN data indicates that 547 employees were laid off between June 15, 2020 and January 2021 by JC Resorts or entities whose name included “JC Resorts” (for example, JC Resorts—Los Serranos Golf Club, JC Resorts—Rancho Bernardo Inn, JC Resorts—Cathedral Canyon Golf Club), how many employees did JC Resorts employ across its system?

UNITE HERE Local 11 also released a research brief profiling JC Resorts, which provided information on golf courses that the firm has stopped managing over the last three years.

Click here for the updated research brief.

UNITE HERE Local 11 is a labor union representing over 32,000 hospitality workers in Southern California and Arizona that work in hotels, restaurants, universities, convention centers, and airports.