Filipino Restaurant Estrellita Faces an Uncertain Future in Grant Park

For Filipino restaurant Estrellita, timing and location may have led to the denial of pandemic relief.

People who think the pandemic isn’t still affecting the bottom line at restaurants, should think again. And for the owners of Estrellita in Grant Park, it’s more than just rising food and overhead costs behind the financial stress. Qualifying technicalities in federal and local pandemic relief programs like the Paycheck Protection Program (PPP) and Resurgence Grant might have caused the Filipino restaurant to miss out on much-needed funding, leading to owing two months rent due COVID-related closures throughout its first year in business.

According to a post on social media, owners Hope Webb and chef Walter Cortado say they owe two months rent, plus fees and interest, after failing to qualify twice for PPP money and not scoring high enough to receive assistance from Atlanta’s Resurgence’s Grant Fund. The latter specifically targeted minority-owned businesses in the city suffering from pandemic financial losses.

Now, Webb and Cortado have set up a GoFundMe campaign in hopes of raising $30,000 to reconcile their accounts with the landlord. Webb tells Eater they are currently negotiating terms with Estrellita’s landlord to address the rent charges in arrears and associated accrued penalties and interest.

“For the incoming restaurateur class of 2020, it’s our duality. Make this ad look pretty or take this pretty picture and cover up the shame of our struggles,” Webb says.

Estrellita is the only full-service Filipino restaurant in the city of Atlanta, and one of only a few Filipino restaurants and food businesses operating in the metropolitan area.

Matt Wong

Webb and Cortado signed a lease for the tiny 550-square-foot space beside Manny’s on Woodward Avenue in late 2018. By the time the pandemic began over a year later, permits were fully in place and renovations on the 20-seat restaurant were already underway. Named by various Atlanta food publications, including Eater, as one of the city’s most anticipated restaurants, Estrellita quietly opened for takeout in early September 2020.

Over the next year, the restaurant faced temporary closures due to staffing shortages or illness and revenue losses as Webb and Cortado navigated operating a restaurant at the height of the public health crisis. Then, at the end of 2021, a surge in COVID-19 cases brought on by the highly transmissible Omicron variant once again crippled the restaurant industry, forcing many businesses to close for days at a time during the traditionally profitable peak holiday dining season.

“We barely qualified for PPP1 because there was no payroll for 2019, or PPP2 because we couldn’t show a loss in 2020,” the social media post reads. “Meanwhile, we suffered through the same crippling economic conditions and closed several times due to COVID exposures and outbreaks. As a result, we paid rent further and further in arrears.”

When Atlanta mayor Andre Dickens announced the renewal of the Resurgence’s Grant Fund in February 2022, Webb and Cortado quickly applied for relief. But after six months of waiting, their application was denied, receiving what they claim was a “D grade” based on the restaurant’s location.

Matt Wong

Matt Wong

Matt Wong

The renewal of the Resurgence’s Grant offered an additional infusion of $10.4 million in relief funds for small businesses, part of the American Rescue Plan and directed by Invest Atlanta, the city’s economic development agency. To qualify, businesses needed a valid 2022 Atlanta business license, employ fewer than 250 people, attest to not receiving Federal funding for the same pandemic losses or expenses being applied for, and provide proof of financial hardship as a result of the health crisis incurred after March 3, 2021.

Using a scoring matrix, businesses like Estrellita were then rated on a number of qualifying factors, including four qualifiers based on location, which made up 30 percent of the final score.

In order to qualify based on location, Estrellita needed to satisfy one or more of the following criteria:

• Located in an ARP-designated Qualified Census Tract (as deemed by the American Rescue Plan as a census tract with at least 50 percent of the households having an income less than 60 percent of the area median gross income) — 10 points
• Located in a Federal Opportunity Zone (low-income distressed area needing investment) — 10 points
• Located in disinvested NPUs (neighborhoods in which developers and builders no longer spend money for improvements, new housing, businesses) — 5 points
• Located in Tax Allocation District (TAD) or a City of Atlanta designated redevelopment area — 5 points

Estrellita is located on the border between Grant Park and Cabbagetown near Memorial Drive, areas experiencing exponential growth in the housing market and a boom in business and restaurant development spurred on by further expansion of the Beltline over the last decade. The location criteria in a program meant to bolster minority-owned businesses in the city, Webb and Cortado allege, ended up costing Estrellita the opportunity to take advantage of the relief funding. And it’s likely Estrellita isn’t alone in falling through the cracks or having lost out on pandemic relief money because of such qualifying technicalities in these loan and grant programs.

A denial letter sent to Estrellita from Invest Atlanta states that 2,473 applications were processed and evaluated for funding eligibility in this last round of the Resurgence Grant.

“It is terribly sad. It’s as if the government made a decision that most restaurants fail in the first two years anyway, so why invest in them,” Webb says, who also cites increased labor and food costs as aggravating financial factors for Estrellita. “Working hard and succeeding is the American dream. As Filipinos, we are no strangers to hard work. But this, this is every restaurateur’s worst nightmare.”

Matt Fogt, vice president of marketing and communications for Invest Atlanta, tells Eater that a representative provided Estrellita with information about other small business support programs available. Fogt also says Invest Atlanta recently opened the Atlanta Open for Business Fund, a $20 million program made possible by a grant from Wells Fargo. The grant offers resources to small businesses with a focus on “racially and ethnically diverse business owners” in Atlanta disproportionately hurt by the pandemic.

“The Atlanta Open for Business Fund is accepting applications with a mix of loan and grant programs, and we encourage all businesses who may benefit from them to explore this opportunity,” Fogt says. “In addition, Invest Atlanta offers other funding and technical assistance programs for small business owners.”