Tacoma bakery, closed since March, landed federal paycheck protection loan, records show

A Tacoma bakery that closed in March amid claims of mismanagement and pay discrepancies received up to $350,000 from the Paycheck Protection Program, according to data released Monday by the U.S. Treasury Department.

Tacoma Baking Co.’s application for a PPP loan between $150,000 and $350,000 was approved May 1 and was purported to retain 60 jobs. It was facilitated by Fountainhead, a Florida-based, non-bank lender specializing in Small Business Administration loans.

The bakery closed during the second half of March, and the logo on the facade of its building at 1316 Martin Luther King Way since has been painted over. The News Tribune could not determine when Tacoma Baking Co. applied for the loan, which was authorized as part of the federal CARES Act, signed into law by President Trump on March 27.

Jessica DeVisser, one of the bakery’s owners and its chief executive officer as of June 23, 2020, declined to comment for this story.

An automatic email reply from one of several emails associated with the business stated that effective May 20, Tacoma Baking Co. “has closed its operations in Tacoma, permanently.”

Weeks before the state-mandated shutter of dine-in business at restaurants, Tacoma Baking Co. was mired in controversy, as then-current and former employees claimed they had been paid late or in cash, as well as a host of other issues regarding management and the workplace environment.

Jessica DeVisser told The News Tribune for a previous story that the closure was due in part to the backlash that ensued as well as diminished sales related to COVID-19.

Congress has allotted $719 billion into the Payroll Protection Program to help businesses stay afloat and keep employees at work during the pandemic.

So many businesses applied that banks were overwhelmed with applications. Several local small businesses and nonprofits were not initially approved. One of them was Puyallup’s Step by Step, a nonprofit that helps new mothers. It laid off and furloughed staff at its Farm 12 restaurant as the pandemic took hold.

Additional funds were added to the program in April.

Recipients receive low-interest loans that can become grants if the business follows guidelines like retaining or quickly rehiring employees.

The program is intended to encourage businesses to keep employees on the payroll.

The award amount is determined by average monthly payroll costs, minus employees who make more than $100,000, according to the application.

In March and April, The News Tribune spoke with several TBC employees about missing pay. Front-of-house workers earned no more than $17 an hour, which at 40 hours a week would amount to about $32,000 before tax. The average baker salary hovers under $30,000, according to the Bureau of Labor Statistics.

Employees alleged they were often not paid in full or on time, and sometimes were paid in cash without pay stubs, a state requirement.

Brandon Chinn, who worked in the back-of-house, told The News Tribune this week that some time in May he received a check for $300 by mail in a plain white envelope. The check had Jessica DeVisser’s name on it and a name he did not recognize, he said.

Laurie Still, who also worked as a baker, said she received a “final paycheck” at the end of May.

The PPP application explicitly states that the loan must be used for one or more of the following: payroll costs, costs to continue health care benefits, mortgage interest payments, rent or utility payments, interest payments or refinancing a federal loan.

Nearly 5 million PPP loans have been approved, Treasury Secretary Steven Mnuchin said in a news release, with an average loan amount around $100,000, though they can reach $10 million. The federal government has disclosed detailed information about recipients for loans exceeding $150,000.

Precise terms of SBA loans typically differ from borrower to borrower, but in the case of PPP, all businesses were treated equally regardless of credit history.

How the federal government, as the loan creditor, will handle businesses that close after accepting the funding remains unclear.

Tacoma Baking Co. is a defendant in two active lawsuits, one by an investor alleging she gave $60,000 to the enterprise and another by two of the chefs and their spouses, whose firing set off the initial firestorm in early March. An equipment lender also sued the company in February for defaulting on that loan.

This story was originally published July 8, 2020 at 12:00 PM.