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HomeMy WebLinkAbout5.1 Small Business Assistance Emergency Program TO: Economic Development Authority FROM: Christine Costello, Economic Development Director DATE: May 7, 2020 RE: Potential Small Business Emergency Grant Program Introduction Over the past months several Federal and State loan and grant programs have been developed to assist small businesses struggling during the COVID-19 pandemic. These loans and grants are available through the Small Business Administration (SBA) and the State of Minnesota Department of Employment and Economic Development (DEED). The Federal programs consist of the Paycheck Protection Program (PPP) which on it’s second round of funding and is thought to exhaust those allocated funds soon. The second Federal program is the Economic Injury Disaster Loan (EIDL) which is unable to accept new applications based on the appropriation of funding. The State also has two programs available through DEED for businesses. The Small Business Emergency Loan Program, which provided a 0% interest rate for loans from $2,500 to $35,000 and impacted by Executive Orders 20-04 and 20-08. The State legislature allocated $30 million for this program but the funds have been exhausted and DEED is waiting to see if the State Legislature will add additional funding. The second program is Small Business Loan Guarantee Program, which provides an 80% guarantee up to a maximum of $200,000. A fee of .25 percent on the guarantee loan principal is charged for each loan enrolled into the program. DEED still has funding available for this program. It is important that businesses continue to apply for relief from Federal and State resources since they can provide larger funding resources for businesses. It is also important that communities encourage their Federal and State elected officials to increase funding of the programs referenced. The concern is with smaller businesses who have smaller cash reserves, and who do not have an existing SBA lender for use of Federal programs, as well as those ordered to close due to the Governor Walz’s Stay at Home Orders, who are potentially at a higher risk of business failure. Discussion In response to the more immediate short term issue, staff is recommending that the City Council consider allocating between $200,000 and $300,000 of the existing EDA Trust fund balance to assist businesses with forgivable loans (grants) of up to $10,000 per business. The following outlines other business assistance programs in the metro area:  City of Edina budgeted $100,000 for 10 grants up to $10,000,  City of St. Louis Park budgeted $200,000 for 40 grants up to $5,000,  City of Minnetonka budgeted $225,000 for 30 grants up to $7,500; and  City of Maple Grove budgeted $250,000 for 25 grants up to $10,000 grants. Economic Development Authority Proposed Small Business Emergency Grant Program May 7, 2020 Page 2 of 6 The intent of the small business emergency grant program is to provide grants to businesses that can provide evidence of a loss of income during COVID-19 and proof of profitability before the pandemic. The grant is to ensure the preservation of employment opportunities through the prevention of business closure to promote long-term economic vitality in the community. While this effort focuses on business stability, it also assists those workers employed by a small business and allows them to continue to make rent and mortgage payments to stay in their home. Small businesses regularly employ residents of the community and by providing assistance to a small business one is also allowing that resident who may work at that business the opportunity to pay their mortgage or rent. The process can be circular in helping business survive and preventing foreclosure. The proposed small business emergency program would provide qualified locally owned and operated small businesses (those with 3 to 25 employees and under $1 million dollars in annual revenue) with a one-time emergency grant of up to $10,000 to be used for working capital purposes defined as wages, employee health benefits, leave payments, mortgage/rent payments, utilities and/or property taxes and other critical business expenses that can’t be paid as a direct result of the current COVID-19 pandemic. Program Considerations To receive small business emergency funds a business must demonstrate that it has been directly and adversely affected by COVID-19 and/or whose industry is named in Governor Walz Executive Orders 20-04 and 20-08. Other non-essential businesses not specifically addressed in the Governor Executive Orders should be considered as well since they have equally faced financial hardship due to the pandemic. Thus, it will be required for a business to provide proof of lost revenue as one of the criteria for consideration of a grant. Applicants of the potential program would also be encouraged to work with landlords and/or loan holders to defer rent and loan payments, and to applicants would be required to provide proof of application submittal, acceptance, approval and/or denial of Federal and State emergency financing programs in order to qualify for the City’s program. Upon a successful grant application being awarded the applicant would be required to enter into a Grant Agreement with the Cottage Grove EDA under which the applicant agrees to abide by the program’s requirements. The funds would be available based on a lottery system implemented by a third-party organization such as Minnesota Consortium of Community Developers (MCCD), Ehlers and Associates, or the Community Reinvestment Fund (CRF). The application period would be open for one week and then completed applications would be picked on a lottery system until the funds available are exhausted. It is anticipated that awarded funds could be distributed within one to two weeks after application approval depending on how grant recipients elect to receive funds. All grant recipients, as a condition for receiving grant funding, would be required to submit a brief report to the EDA specifying how the entirety of the grant funds were utilized within two months of receipt of funds. Staff would follow-up with grant recipients over the six months following funding award to provide additional support and ensure the businesses are aware of resources and how to access them. Number of Employees Program Considers The SBA defines small businesses as those with 250 or fewer employees. Most businesses in Cottage Grove fall into that category. The potential program sets the number of full-time Economic Development Authority Proposed Small Business Emergency Grant Program May 7, 2020 Page 3 of 6 employees at 3 to 25 because those smaller businesses are likely facing greater financial hardships. The proposed program also requires that eligible small businesses have no more than $1,000,000 in gross sales annually, which further focuses the program to smaller businesses (typically those with less than 25 employees). Supporting small businesses keeps people employed and ensures there are jobs available when the Stay at Home Executive Orders are lifted. Frequently businesses with 0-2 employees are self-employed and/or 1099 contract employees and work out of their home. Currently, self- employed individuals are eligible to receive unemployment compensation, plus the additional $600/week from the Federal government CARES Act. Many self-employed and 1099 contract employees do not have brick and mortar stores/offices; however, for those that do, they can work with their landlords to request rent deferrals. Staff recognizes that there are many types of businesses and many variables to consider. Therefore, the program specifically states that businesses with fewer than 3 people may apply and will be considered on a case-by-case basis. Application Acceptance/Review The basis for accepting applications is a challenging question. It would be important to disburse funds to small businesses as quickly as possible since many small businesses potentially do not have enough cash to get through the next few weeks. It is suggested that the application period be open for one week and applications would be completed online through the City’s website and be sent directly to the third-party organization for consideration. Then applications could be reviewed and scored based on pre-determined criteria (program guidelines) for completeness then a business would sign a grant agreement and agree to the program guidelines, from there the EDA and City Council would take action on applications and finally funds could be disbursed. In researching small business emergency programs during COVID-19 applications were being reviewed on a first-come first-served basis as well as a lottery system. When a program is awarded on a first-come, first-serve basis funds would be awarded to those who completed their application and met the program criteria first. With a program such as this a business must submit several financial documents that then become public if received by the City. Many businesses whether successful or not, would not be interested in having this information become public record. Also if applications were received by any City elected official, staff, or taskforce developed to review the applications this could be seen as being bias towards certain businesses in the community or that the program was “handpicking” businesses to receive the grant funds. It is proposed that in order to remain impartial to which businesses receive grant funds that a third- party organization review the program applications for completeness and disburse program funds through a lottery system. This would ensure that funds are not disbursed or perceived to be disbursed against any small business. A lottery system allows for an even “playing field” for all those that choose to apply to the program. Submittal to a third-party organization also allows the financial data of the business to remain private and not a part of public record. Program Timeline The proposed timeline is aggressive but allows businesses the working capital to hopefully “reset” their business with the assumption that Stay at Home Orders begin to be lifted and businesses can begin full business operations prior to the pandemic period. The proposed timeline is as follows: Economic Development Authority Proposed Small Business Emergency Grant Program May 7, 2020 Page 4 of 6 Action Item Date Council Consideration of Program May 6,2020 EDA Consideration of Program May 12, 2020 Program Roll Out and Application Submittal May 13-20, 2020 Third-Party Review and Selection May 21-27, 2020 Council Approval of Grant Agreements June 3, 2020 EDA Approval of Grant Agreements June 9, 2020 Disbursement of Funds June 11, 2020 Two Month Report from Grant Awardees to August 11, 2020 EDA Program Funds To fund the potential program, one year’s allocation of the EDA Trust (donation from LSP) could be used, which would allow for program funds of $200,000 to $300,000. The intent of the funds from the EDA Trust are to provide for economic development activities within the City. The current balance in the EDA Trust as of April 30th is $3,572,165. The EDA and City Council may choose to increase this amount at a later date if the number of applications warrant or based upon needs expressed by applicants. With a fund of $200,000 to $300,000, the proposed grant amount to consider is a maximum of $10,000, which could serve 20-30 small businesses in the community. This could provide working capital to help a small business stay afloat over the next couple of months. The grant is designed to be used in conjunction with other assistance such as rent/mortgage, utility, and loan deferrals until other resources such as those offered through Federal and State agencies can be accessed. Forgiveness of the grant could be include forgiven by the EDA upon successful completion of the following: 1. A business maintains operations within the City for six (6) months upon award of a grant. 50% of the loan shall be forgiven; 2. If the business returns employment levels to that of pre-pandemic levels within six (6) months upon award date, the remaining 50% shall be forgiven. A risk of the grant program even if requirements are made to for a small business to repay the grant that these funds essentially become a gift, there is no way for the EDA to get these funds back if a small business closes even after assistance is provided. The cost to the EDA to implement this program would be the services of the third-party organization to review the applications, implement the lottery system, award the grants, and communication with businesses. To process a grant fund that is $200,000 to $300,000 and awards approximately 20-30 grants would cost approximately $20,000 to $40,000. In addition to the third-party organization services, there are legal services required that are outside the retainer of LeVander, Gillen, and Miller. Legal services include research into the legality of a grant program, resolution and grant agreements for the EDA and City Council. Legal services for the grant program are estimated to be approximately $8,000. Economic Development Authority Proposed Small Business Emergency Grant Program May 7, 2020 Page 5 of 6 Program Marketing If a program is implemented there will be a need to distribute information that these funds are available to businesses as quickly as possible. Economic Development staff would be able to email program information out to businesses as well as promote the program via various outlets, such as the City’s social media platforms, City’s website, Cottage Grove Area Chamber of Commerce, Open to Business, and asking EDA and City Council members to get the word out in their contacts with businesses in the community. Program Analysis PROS CONS Preserve employment opportunities in Loss of $300,000 to EDA Trust Cottage Grove. Applications are reviewed by a third party No legal requirement that the EDA will removing local basis and consideration based continue to receive donation from LSP strictly on application and program guidelines through a lottery system Loan allows small business to continue to Loan would be a write off – difficult to recover operate. funds. Business can make payments to payroll and Washington County has no plans for employee health insurance, etc. emergency financial assistance for small businesses. Targeting small businesses that have been No other community in Washington County profitable (1-2 years) prior to COVID-19. implementing emergency financial assistance program Business has to have a physical commercial Edina, Minnetonka, St. Louis Park, Maple address – not located in a residential Grove, Minneapolis, St. Paul, Hennepin neighborhood. County and Ramsey County only places providing emergency financial assistance programs. No interest rate or repayment of loan. Image to community of using EDA Trust funds and misconception they are a part of the general levy. Small businesses with no SBA lender will be No interest rate or repayment of loan. easier to apply and potential obtain funding. Economy will be facing a recession; funds will Would funds be better served towards a larger assist businesses with working capital. portion of the community such as low income residents and seniors. Program focuses on business retention during Federal and State stimulus programs provide an economic downturn, which financially is a larger funding ability. better investment versus business recruitment after businesses closure. Assists businesses with 25 employees or less, leaving potential businesses out of the running for simply having 26+ employees but in similar financial situation. Economic Development Authority Proposed Small Business Emergency Grant Program May 7, 2020 Page 6 of 6 At the May 6th City Council meeting a workshop was held with City Council to discuss the proposed small business emergency assistance program. The City Council discussed that by providing financing to assist local businesses that it may help the business sustain their operations, preserve employment, and prevent business closures, all in effort to promote long term economic vitality in the community. The City Council recommended moving forward with establishing a program Recommendation Consideration of the implementation of a small business emergency assistance program funded by the EDA Trust to aid local businesses adversely impacted by the COVID-19 pandemic and related emergency orders. Attachments Resolution Program Guidelines Memo for Legal Counsel Business List per Executive Order 20-04 and 20-08 Business List of Brick and Mortar & HomeBased COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY WASHINGTON COUNTY STATE OF MINNESOTA RESOLUTION NO. 2020-002 A RESOLUTION APPROVING ECONOMIC DEVELOPMENT AUTHOIRTY’S EMERGENCY ASSISTANCE GRANT PROGRAM TO ADDRESS THE IMPACTS OF COVID-19 ON SMALL BUSINESSES WITHIN THE CITY OF COTTAGE GROVE Whereas, the spread of COVID-19 in the United States and Minnesota has raised serious public health concerns and resulted in a great deal of uncertainty. Much remains unknown about the virus and how it spreads: Whereas, on March 11, 2020, The World Health organization determined that the COVID- 19 outbreak constitutes a pandemic. On March 13, 2020, President Trump declared a national state of emergency as a result of the pandemic. Whereas, on March 13, 2020, Governor Tim Walz issued Emergency executive Order 20- 01, declaring a stat of peacetime emergency to address the COVID-19 pandemic in Minnesota. The Governor’s Executive Order triggered activation of the City’s emergency management plan and enabled the City to exercise its emergency powers. The Governor has subsequently issued 23 additional Executive Orders to combat the impacts of COVID-19, within the State of Minnesota, which include closures of schools, bars, restaurants, and other place of public accommodation, and directing Minnesotans to stay at home (with exceptions for obtaining necessary supplies, healthcare, and similar needs) Whereas, on March 15, 2020, theMayor and City Council approved Resolution 2020-044 declaring a local emergency and formally authorizing the City to implement its Emergency operations Plan and Pandemic Response Plan. These plans provide the basic strategy of the City to mobilize resources, conduct activities to guide and support local emergency management efforts, and authorize city staff to take actions deemed necessary to protect the public health and safety. Whereas,the Economic Development Authority (EDA), in and for the City of Cottage Grove,Minnesota has the economic development authority and may provide forgivable loans to businesses for purposes of preventing blight and preventing substantial and persistent unemployment. Whereas, in order to retain small businesses in the City, The EDA has determined to create the COVID-19 Small Business Emergency Assistance Program to assist with the expenses incurred and specifically caused by the impact of the Governor’s Emergency Executive Orders. NOW THEREFORE BE IT RESOLVED that, after due consideration, the EDA President and EDA Executive Directorof the EDA hereby express their approval of the proposed COVID- 19 Small Business Emergency Assistance Program. th Passed this 12day of May, 2020. Myron Bailey, President Attest: Jennifer Levitt, Executive Director COTTAGEGROVESMALLBUSINESSEMERGENCYGRANT PROGRAM PURPOSE TheCityofCottageGroveEconomicDevelopmentAuthority(EDA)hasestablishedafundto provideforgivable,nointerestloansofupto$10,000toassisteligiblesmallbusinesses impactedbyCOVID19pandemic.Thepurposeofthesefundsistoensurethepreservationof employmentopportunitiesintheCityofCottageGrovethroughthepreventionofbusiness closurestopromotelongtermeconomicvitalityinthecommunity. Grantfundswillbeavailableonalotterysystemandtheapplicationperiodwillbeopenforone week.TheprogramissubjecttofundingavailabilityfromtheEDA.TheEDAretainsthe authorityanddiscretiontoapproveordenyanapplication,andreservestherightto subsequentlyaddfurtherpriorities,changeeligibilitycriteria,ordiscontinuetheprogramin responsetochangingcircumstances. ELIGIBILITY TobeeligibletoreceiveSmallBusinessEmergencyAssistancefunds,abusinessmust beendirectlyandadverselyaffectedbytheCOVID19 demonstratethatitsoperationshave HealthPandemicand/orthatitoperatesinacategorynamedinExecutiveOrders2004and20 08.Allapplicantsmustmeetthefollowingcriteria: 1. Eligiblebusinesstypesincludelocallyownedandoperatedbusinessesnotedin and2008,suchasthoselistedbelow. ExecutiveOrders2004 Restaurants,cafes,coffeehouses,andotherplacesofpublicaccommodation offeringfoodorbeverageforonpremisesconsumption. Taverns,brewpubs,microbreweries,distilleries,wineries,tastingrooms,and otherplacesofpublicaccommodationofferingalcoholicbeveragesforon premisesconsumption. Gymnasiums,fitnesscenters,indoorsportsfacilities,indoorexercisefacilities, exercisestudios,businessesofferingmassagetherapyorsimilarbodywork,spas, salons,nailsalons,cosmetologysalons,andbarbershops.Thisincludes,butisnot limitedto,allsalonsandshopslicensedbytheMinnesotaBoardofCosmetologist ExaminersandtheMinnesotaBoardofBarberExaminers. Artandmusicstudios. Bowlingalleys,skatingrinks,andothersimilarrecreationalorentertainment facilities CottageGrove SmallBusinessEmergencyGrantProgram (DuringCOVID19) OtherbusinessesdeemednonessentialunderExecutiveOrders. OtherbusinessesasapprovedbytheEDA. 2. Thebusinessshallhaveaphysicaladdress(proofofaddressrequired)withinthecity (andnotlocatedinaresidentialneighborhood)andhavebeenoperatingwithinthecity longenoughtodemonstratefinancialviability. 3.Thebusinessshallemploybetween3and25FullTimeEquivalent(FTE)employeesprior totheissuanceoftheStateofMinnesotaEmergencyExecutiveOrder2004(March16, 2020)andmake$1millionorlessinannualgrossrevenue.Businesseswithlessthan3 employeeswillbeconsideredonacasebycasebasis. 4.ThebusinessmusthavebeeninoperationforaleasttwoyearspriortoMarch1,2020. 5.Allbusinessesmustservethegeneralpublicandbeaconforminguseunderthecurrent zoningregulationsofthecity,mustnotbeinviolationofthezoningcode,and mustnothaveanydelinquenttaxes,bills,orchargesduetothecity; 6.Applicantsarestronglyencouragedtoclaimallapplicableprivateandpublicinsurance andutilizeallothersourcesofapplicableassistanceavailablefromotherprivateand publicsources,includingbutnotlimitedtorequestsforrent/mortgage,utilityand/or loandeferrals/forgiveness.Applicantsmustsupplyevidencethattheyhaveappliedfor FederalandStatedisasterfinancialassistancethroughtheSmallBusiness Administration(SBA)andSmallBusinessEmergencyLoanthroughtheMinnesota DepartmentofEmploymentandEconomicDevelopment(DEED)priortoapplyingfor thisgrant. 7.Assistancecannotbeprovidedtobusinessesornonprofitsthat: DonothaveaphysicaladdresswithintheCityofCottageGrove AgriculturalRelated(croporlivestockproduction,etc.) Purchaseofmachineryorvehicles. Movingexpenses. Landacquisitionforspeculation. Nonprofitorganizations. Selfemployed,independentcontractors,orbusinesseswithnoemployeesother thananowner(s). Corporatechains,multistatechains. BusinessesindefaultconditionspriortoFebruary29,2020. Deriveincomefrompassiveinvestmentswithoutoperationaltiestooperating businessesorwhoseprimarysourceofrevenueisfrombusinesstobusiness transactions;realestatetransactions;propertyrentalsorpropertymanagement; billboards;orlobbying. Primarilygenerateincomefromgamblingactivities. Generateanypartofitsincomefromadultorientedortobacco/vapingrelated activities. Havenocurrentorhistoricalfinancialstatements. Previouslyreceivedemergencyfundsfromthecity. CottageGrove SmallBusinessEmergencyGrantProgram (DuringCOVID19) PROGRAMGUIDELINES 1. Amount:Businessmayapplyforaonetimeemergencygrantawardnottoexceed $10,000.Staffwillrevieweachrequestforloanfundstodeterminethelevel ofassistancethatwillbeprovided. 2. Uses:Fundscanbeusedexclusivelyforworkingcapitalpurposesdefinedapayingfixed debts,currentpayroll,accountspayable,taxesandpayingdirectbusinessrelatedbills suchasrent,mortgage,orutilityfeesandothercriticalbusinessexpensesthatbe paidasadirectresultofthecurrenthealthemergency.Awardedfundsmaynotbeused forpersonalusesorexpenses. 3.Term:Allgrantfundsmustbeutilizedwithintwomonthsoftheloanagreementbeing fullyexecuted. 4. ProofofNeed:Allapplicantsmustdemonstratefinancialneedforgrantfundspriorto approval.Thisincludesbutisnotlimitedtothepreviousannualgrossrevenue, averagemonthlygrossrevenuepriortoCOVID19,andprojectedmonthlygrossrevenue forthenextthreemonths.Additionally,applicantsarerequiredtoprovideevidenceof applicationsubmittal,acceptance,approvaland/ordenialofStateandFederal emergencyfinancingprograms.Thiscouldsimplyincludeanemailresponsefromthese agencies. 5. ProofofExpenses:Applicantshallprovideproofofeligibleexpenserequestedtobepaid withgrantfunds.Thisincludes,butisnotlimitedtocurrentpayroll,unpaidinvoices, mortgageprincipalandinterest,rent,utilitypayments,propertytaxesand/orother unpaidbusinessrelatedexpenses. 6. DisbursementofFunds:Fundsshallbedistributedwithintwoweeksafteraloan agreementhasbeenexecutedbyallrequiredparties. 7. Termination:TheEDAretainstherighttoterminateanyagreementunderthe EmergencyAssistanceProgramifagrantrecipientisfoundtobeinviolationofany conditionssetforthinthegrantguidelinesorgrantagreement. 8. RighttoDeny:TheEDAretainstherighttodenyanyapplicationforgrantfunding. 9. GrantAgreement:Uponanapplicantbeingawardedfunds,thegrantrecipientshall enterintoagrantagreementwiththeCottageGroveEDA.Fundswillnotbedistributed forayawarduntiltheapplicantprovidesproofofexpensesandagrantagreementwith theCottageGroveEDAhasbeenexecutedbyallrequiredparties. 10. Reporting:Asaconditionforreceivinggrantfunding,allgrantrecipientsarerequiredto submitabriefreporttotheEDAwithintwomonthsafterreceivinggrantfunds, specifyinghowtheentiretyofthegrantfundswereutilizedandprovidingevidencein theformofpaidinvoices,statements,orsimilardocumentation. 11. FundingAvailability:TheSmallBusinessEmergencyAssistanceprogramhaslimited amountoffundsavailable.Fundsareawardedviaalotterysystemaftertheoneweek CottageGrove SmallBusinessEmergencyGrantProgram (DuringCOVID19) applicationperiodisclosedoruntiltheearlierofthedatethefundisexhausted,orthe citydeclaredstateofemergencydeclarationislifted. 12.Indemnification:AllgrantrecipientsshallberequiredtoindemnifytheCityofCottage Grove,theCottageGroveEDA,andanyofficersactingontheirbehalf. APPLICATIONPROCESS Priortoapplying,pleasereviewtheProgramGuidelinestodetermineifyourbusinessiseligible. 1. Applicationsareavailableonthewebsite:www.cottagegrovemn.gov 2. Applicationrequirementswillinclude: Basicdetailsaboutthebusiness. BasicEmploymentandannualgrossrevenueinformation. Informationoncurrentoperationsincludingwhetherthebusinessiscurrently closedorisprovidingreducedservices. Narrativedescriptionsandestimatedcalculationsofthenegativeimpactsofthe businessduetoCOVID19. Anarrativedescriptionofthecurrentplansforresumingoperationsfollowing theCOVID19crisis. Evidenceofapplicationsubmittal,acceptance,approvaland/ordenialofState andFederalemergencyfinancingprograms.Thiscouldsimplyincludeemail responsefromtheseagencies. Supportingdocumentationandapplicationattachments. 3. Fullycompletedandesignedapplicationsalongwithrequireddocumentsmaybe submittedonlineto:(EmailAddress).Hardcopieswillnotbeaccepted. 4.Uponsubmissionofapplication,applicantswillreceiveamemailconfirmationreceiptof application. 5. Theapplicationwillbereviewedforeligibilityuponreceipt.Ifadditionalinformationor documentationisnecessaryEDAstaffwillcontacttheapplicant.Duetoanexpected highvolumeofapplications,youmayconsideryourapplicationscompleteifstaffdoes notrequestadditionalinformationwithin5businessdaysafterapplicationacceptance. 6. Fundswillbedistributedonalotterysystem. Ifyouhaveanyquestionsorneedassistancecompletingthegrantapplication,pleasecontact: ChristineCostello,EconomicDevelopmentDirector CityofCottageGrove Ph:6514582824 Email:ccostello@cottagegrovemn.gov CottageGrove SmallBusinessEmergencyGrantProgram (DuringCOVID19) FUNDINGPROCESS Ifapplicationisapprovedandfundsareavailable,businesseswillbenotifiedwithin510 businessdaysandprovidedwithanelectronicgrantagreementforsignature. Fundsshallbedistributedwithinonetotwoweeksafteragrantagreementhasbeenexecuted byallrequiredpartiesdependingonhowgrantrecipientselecttoreceivefunds. Smallbusinessesreceivingfundsmustcommittousingthefundsforeligibleprogramexpense andmustagreetodocumentandreportspecificusesofthefunds.Accordingly,allgrant recipientsarerequiredtosubmitabriefreporttotheCottageGroveEDAwithintwomonths afterreceiptoffunds,specifyinghowtheentiretyofthefundswereutilizedandproviding evidenceintheformofpaidinvoices,statements,orsimilardocumentation(seesamplereport formattached). FOLLOWUPANDADDITIONALRESOURCES Forbusinessesneedingadditionalresourcessuchastechnicalassistance,largerworkingcapital other,staffwillprovideongoingassistancetobusinessesofallsizesandtypes, loans,or workingwithpartnersandotherlevelsofgovernmenttoaccessresourcesavailable,suchas SBAandStateofMinnesotaDEEDloans. Staffwillconductcheckinwithgrantrecipientswithinoneyearofthedistributionoffundsto learntheeffectofthegrantandbusinessoutcomessuchaseconomicimpactofthegrant program,(including,butnotlimitedto,employeesretainedorrehired,andsales)andwhether theymatchthedesiredoutcomesofbusinessand/orjobretention CottageGrove SmallBusinessEmergencyGrantProgram (DuringCOVID19) SAMPLE CottageGroveEDASmallbusinessEmergencyAssistanceReportForm Asaconditionforreceivinggrandfunding,arecipientsofCottageGroveSmallBusiness AssistancearerequiredtosubmitabriefreporttotheCityofCottageGroveEconomic DevelopmentAuthority(EDA)withintwomonthsafterreceivinggrantfunds,specifyinghow theentiretyofthegrantfundswereutilizedandprovideevidenceintheformofpaidinvoices, statements,bill,orsimilardocumentation. BusinessName:______________________________________________________________ BusinessStreetAddress:_______________________________________________________ City:______________________State:____________________ZipCode:_______________ NameandTileofPersonCompletingForm:________________________________________ 1.Whatwasthetotalamountofgrantyourbusinessreceived?$_____________________ 2. Pleasespecifyhowgrantfundswereutilized.Includeexpensesandamountsuptototal amountofgrant.Forexample:Payroll2employees,2weeks:$3,000,MayRent$2,000. Pleaseattachorprovidecopyofstatement,invoice,bill,orsimilardocumentationpaidwith assistancefunds. 3. Pleasedescribebenefitsreceivedfromtheawardedfunds. 4. BrieflyexplainanyongoingbusinessimpactsformtheCOVID19pandemic: CottageGrove SmallBusinessEmergencyGrantProgram (DuringCOVID19) ApplicationChecklist Thefollowingdocumentsmustbeincludedinorderforanapplicationtobeconsidered complete,otherwiseyourapplicationisconsideredincompleteandwillnotbeconsidered. Completionofonlineapplication ProofofAddress ArticlesofIncorporation EvidenceofrevenuelostrelatedtoCOVID19 Applicantshouldsubmitdocumentationthatbestdemonstratestheimpactandisdeemed acceptablebyProgramAdministrator.Someexamplesofacceptabledocumentationinclude rd SalesTaxReporting,PeriodStatementsfrom3PartySalesPlatforms,MerchantService Statements,andPointofSaleorRegisterreports. Twomostrecentyearsoftaxreturnsandbalancesheets 2018and2019FederalBusinessReturnorappropriatebusinesstaxschedulebaseon entitytype.Businessesthathavenotyetcompleteda2019FederalReturnareeligibleto their2019 applyandsubstituteotherdocumentationofrevenueandwillneedtoprovide Federalreturnwhencompletedtoqualifyforloanforgiveness. , EvidenceofEmploymentPriortoMarch1,2020. Acceptabledocumentationmayincludeperiodreportingfroma3rdpartypayroll processor,FederalFormQuarterlyFederalTaxReturn,orother StateorFederalpayrollrelatedfiling. CreditCheckCertificationFormBusinessOwner st PayrollReportfrom1Quarterof2020 Threemonthitemizedexpensereport(May,June,andJuly2020) PersonalFinancialStatement(Optional) SBAForm1368(Optional) TIMOTHY J. KUNTZ DANIEL J. BEESON ANGELA M. LUTZ AMANN KORINE L. LAND DONALD L. HOEFT BRIDGET McCAULEY NASON PETER G. MIKHAIL SCOTT M. LUCAS TONA T. DOVE AARON S. PRICE DAVID L. SIENKO CASSANDRA C. WOLFGRAM CASSANDRA J. BAUTISTA AMANDA J. JOHNSON MEMO TO: Members of the Cottage Grove City Council and Cottage Grove EDA FROM: Kori Land, City Attorney DATE: May 1, 2020 RE: Authority for EDA Small Business Forgivable Loans The City Council is considering a program to offer small business loans to businesses in the City that may be financially struggling during this COVID-19 pandemic crisis. The authority for the EDA to provide these loans can be found in the economic development statutes in Minn. Stat. Ch. 469. The State of Minnesota offers several tools for economic development for cities, depending on the are notably HRAs, Port Authorities, EDAs, City Development Districts, and Industrial Developments. Many of these tools can be used together, meaning that the City can fulfill the purpose of one type of entity (i.e. EDA) by utilizing the tools from another type of entity (i.e. HRA), however putting the puzzle pieces together are a bit complicated. Authority for a Loan: An EDA can provide economic development loans under Minn. Stat. §469.192: 469.192 ECONOMIC DEVELOPMENT LOANS. A statutory city, a home rule charter city, an economic development authority, a housing and redevelopment authority, or a port authority may make a loan to a business, a for-profit or nonprofit organization, or an individual for any purpose that the entity is otherwise authorized to carry out under sections 116J.415 ecial law. (statutory citations omitted) The loan can be used for any of the purposes stated for one of the other entities on the list (HRA, Port Authority, EDA, Development District, Industrial Development). Here are the purposes of the Industrial Development statute: OFFICE ALSO LOCATED IN SPOONER, WISCONSIN 469.152 PURPOSES. The welfare of the state requires the active promotion, attraction, encouragement, and development of economically sound industry and commerce through governmental action for the purpose of preventing the emergence of blighted and marginal lands and areas of chronic unemployment. We believe that the small business loan program is intended to prevent the emergence of blight and prevent areas of chronic unemployment, therefore, the authority to use an economic development loan for these purposes is justifiable. 2 CottageGroveBusinessesbasedonE.O.2004and2008 LocallyOwned/Operated& Delivery/DriveIndependentlyOperated Thru/TakeOutOnlyFranchises Restaurants/Cafes/OtherDriveThru TakeOut 1Applebee'sGrill+BarNoCompanyOwned DriveThru 2Arby'sYesYes(franchisee) Delivery/TakeOut 3BellaPizzaNoYes DriveThru 4BurgerKingYesYes(franchisee) TakeOut 5Carbone'sKitchen&PubNoYes(franchisee) Delivery/TakeOut 6Cassini'sPizzaNoYes TakeOut 7ChipotleMexicanGrillNoCompanyOwned DriveThru 8Culver'sYesYes(franchisee) DriveThru 9DairyQueenYesYes(franchisee) Delivery/TakeOut 10Domino'sPizzaNoUsuallyafranchise TakeOut 11HoKingNoLocal Delivery/TakeOut 12JimmyJohn'sNoYes(franchisee) TakeOut 13Junction70NoLocal TakeOut 14LasMargaritasNoLocal TakeOutYes(secondlocationRoseville) 15Lisu'sThaiTasteNo DriveThru 16McDonald'sYesYes(franchisee) TakeOut 17MuddyCowNoYes(multiplelocations) TakeOut 18NoodlesandCompanyNo? TakeOut 19PapaMurphyTakenBakeNoYes(franchisee) Delivery/TakeOut 20PizzaHutNo? Delivery/TakeOut 21Rocco'sPizzaNoYes TakeOut 22Subway(JorgensenLn)No TakeOut 23Subway(80thStreet)No DriveThru 24Subway(EastPointDouglas)Yes TakeOut 25SushiCaféNoYes DriveThru 26TacoBellYes TakeOut 27TomMoyCaféNoYes DriveThru 28Wendy'sYesCompanyOwned Coffeehouses TakeOut 29CaribouCoffeeNo DriveThru 30StarbucksYes Gym/Fitness/Exercise N/A 31AnytimeFitnessN/A N/A 32CurvesN/A N/A 33OrangeTheoryN/AYes(franchisee) N/A 34PlanetFitnessN/A N/A 35SnapFitnessN/A TFWTrainingforWarriors/Optimal PerformanceHealthN/A 36N/ALocal N/A 37WhenEverFitnessN/ALocal Massage/Salon/Barber N/A 38AllAboutNailsN/ALocal N/A 39B&GHairCo.N/ALocal N/A 40BelissimoSalon&DaySpaN/ALocal N/A 41BellaNails&SpaN/ALocal N/A 42CottageGroveBarbersN/ALocal N/A 43CottageGroveChiropracticN/ALocal N/A 44DaViNails(insideWalmart)N/A N/A 45DeepTissueBodyworkAsianN/ALocal N/A 46DustinLeeOehlerChiropractorN/ALocal N/A 47FantasticSam'sN/A N/A 48GlossSalonN/ALocal N/A 49GreatClipsN/A N/A 50HealthMassageN/A? N/A 51Highway61BarbersN/AYes N/A 52KiekhoeferChiropracticN/A N/A 53NewArtofChiropracticN/A N/A 54NewCenturySalonN/ALocal N/A 55OasisChiropractic&WellnessCenterN/ALocal N/A 56PrettyNailsN/AYes N/A 57RedNailsN/AYes N/A 58Salon80HairStudioN/AYes N/A 59SantoriChiropraticCenterN/A N/A 60SportsClipsofCGN/A N/A 61TheHealingPlaceCGN/ALocal N/A 62TurboNailsN/AYes N/A 63USANailsN/AYes N/A 64WholeHealthMassageN/ALocal Medical/Dental/Veterinary N/A 65AllSmilesDentistryN/A N/A 66AllinaHealthCottageGroveN/A N/A 67AmundsonDentistryN/A N/A 68BieterEyeCenterN/A N/A 69CanvasHealthN/A N/A 70CottageGroveAnimalHospitalN/A N/A 71CottageGroveEyecareClinicN/A N/A 72CourageKennySports&PhyscialTherapyN/A N/A 73DavitaCotageGroveDialysisN/A N/A 74DentistrybyKretchmerN/A N/A 75DunnOrthodonticsN/A N/A 76GentleDentistryCottageGroveN/A N/A 77GroveEndodonticsN/A N/A 78HealthpartnersClinicN/A N/A 79IntegrityDentalN/A N/A 80LindgrenDentalCareN/A N/A 81MHealthFairviewClinicN/A N/A 82MetroDentalcareN/A N/A 83NovaCareRehabilitationN/A N/A 84OralSurgeryCenterN/A N/A 85ParkDentalCottageGroveN/A N/A 86ParkGrovePetHospitalN/A N/A 87PeridontalSpecialistsN/A N/A 88WoodgroveDentalN/A OtherNonEssentialUnderEO's N/A 89Lisa'sFabulousPawsN/ALocal N/A 90La'PoochGroomingN/ALocal N/A 91HoundAroundResort(Grooming)N/ALocal N/A 92CedarhurstN/ALocal N/A 93FurberFarmandEventN/ALocal N/A 94HopeGlenandEventN/ALocal Art/MusicStudio N/A 95DancebyKrisN/ALocal Bowling/Skating/OtherRec None /ƚƷƷğŭĻDƩƚǝĻ.ǒƭźƓĻƭƭĻƭ .ƩźĭƉaƚƩƷğƩIƚƒĻ.ğƭĻķ Brick/MortarOR CompanyNameHomeBasedAddress $5TanB/M7145EPointDouglasRdS 1 1001WebStrategiesHB638583rdStS 2 3GElectricIncHB839867thStS 3 3MCottageGroveCtrB/M10746InnovationRd 4 A&FAuto&PickUpPartsNotLegal10876IdealAveS 5 AGoodJobByJayHB7549HomesteadAveS 6 AbarimRealtyHB8674HiloTrlS 7 AbsoluteTreeSvcIncHB8374GlenbrookAveS 8 AcePlumbing&DrainCleaningHB9437JasmineAveS 9 AcornMiniStgeCottageGroveB/M8625WPointDouglasRdS 10 ActionFenceHB7222HiddenValleyCvS 11 AdjustableFlexibilitySandersHBapartment8120EPointDouglasRdS 12 ADoorableGarageDoorCoHB7630113thStS 13 AdvanceCorporationB/M820097thStS 14 ALDIB/M9010JamaicaAveS 15 AllAboutNails,IncB/M7155JorgensenLnS#130 16 AllCityAutoGlassCoHB8625HillsideTrlS 17 AllSeason'sTreeSvcHB8140GranadaAveS 18 AllSmilesDentistryB/M750180thStS#110 19 ALLDRAINS.COMHB7230LamarAveS 20 AllinaHealthCottageGroveB/M8611WPointDouglasRdS 21 AllstateInsuranceB/M758480thStS#102 22 AmericanAccounts&AdvisorsB/M746080thStS 23 AmericanAgcoTradingCoLLCB/M790097thStS 24 AmericanDistribution&MfgCo. 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B&GHairCoB/M699080thStS#220 48 BDHoldingsIncHB7244HiddenValleyTrlS 49 BeckVisualCommunicationsIncHB8135GranadaAveS 50 BelissimoSalon&DaySpaB/M6939PineArborDrS 51 BellaNailNSpaLLCB/M8459EPointDouglasRdS 52 BellaPizzaB/M715580thStS#160 53 BibleSaysMinistriesB/M715580thStS 54 8617WPointDouglasRdS BieterEyeCtrB/M#110 55 BigOTiresB/M8647EPointDouglasRdS 56 BluechipTreeCoB/M???7700110thStS 57 BobsAirportTaxiServiceHB6870MeadowGrassLnS 58 Boe'sHeatingAir&ApplianceHB9222JefferyBayS 59 Bondeson&SonsUnlimitedPainting &HomeCareServicesHB779166thStS 60 BonngardsFamilyMeatsB/M7009JorgensenLnS 61 8617WPointDouglasRd BrierleyAssociatesB/M#240a 62 8599WPointDouglasRdS BulletinLicenseCtrB/M#700 63 BurgerKingB/M8481EPointDouglasRdS 64 Burggraf'sAceHardwareB/M699080thStS 65 BurnetTitleB/M7750HarknessAveS 66 ByYourSideWeddingPlanningHB7768JefferyAveS 67 ByronElectricLLCHB8225InnsdaleAveS 68 CampGalileeB/M???11975GreyCloudTrlS 69 8451EPointDouglasRdS CanvasHealthB/M#300 70 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CubFoodsB/M8690EPointDouglasRdS 109 Culver'sB/M7998HardwoodAveS 110 DDayAssocHB886472ndStS 111 DRIRemodelingLTDHB9164JergenBayS 112 DairyQueenB/M717580thStS 113 DanceByKrisB/M699080thStS#140 114 Dan'sFenceLLCHB6788TimberRidgeCtS 115 DaViNailsB/MinWalmart9300EPointDouglasRdS 116 8800EPointDouglasRdS DavitaCottageGroveDialysisB/M#100 117 DeepTissueBodyworkAsianB/M8063HadleyAveS 118 DennisBrothersLiquorB/M7155JorgensenLnS#150 119 DentistryByKretchmerB/M743080thStS#203 120 DiggerExcavatingSvcLLCHB8495GreenwayAveS 121 DiningMonthlyClub/MetroDining ClubB/MUSBankBldg720080thStS#26 122 DisplayInnovationsHB8160JensenAveS 123 8711EPointDouglasRdS DollarTreeB/M#112 124 7145EPointDouglasRdS Domino'sB/M#110 125 DorisQuiltingCottageHB975785thStS 126 DunnOrthodonticsB/M6936PineArborDrS#220 127 EasternRoofing&SidingHB838469thStS 128 EDCInstallSolutions/MNSeasons GroundsB/M7404LamarAveS 129 EdwardJonesFinancialAdvisorB/M742080thStS#202 130 8619WPointDouglasRdS EdwardJonesFinancialAdvisorB/M#120 131 EdwardsPlumbingIncHB8519JefferyAveS 132 8700EPointDouglasRdS ErzaDesignLLCB/M#100 133 ExecutiveCleanLLCHB6752PineCrestTrlS 134 ExtraSpaceStorageB/M7160WPointDouglasRdS 135 FRichiePlumbingIncHB7676JasmineAveS 136 FabricatorsChoiceLLCB/M9850HemingwayAveS 137 FamilyDollarStoreB/M699080thStS#130 138 7145EPointDouglasRdS# FantasticSams(JuniperRidgeCorp)B/M130 139 FariasPaintingIncHB794577thStS 140 FarmersInsuranceB/M744980thStS#1 141 /ƚƷƷğŭĻDƩƚǝĻ.ǒƭźƓĻƭƭĻƭ .ƩźĭƉaƚƩƷğƩIƚƒĻ.ğƭĻķ Brick/MortarOR CompanyNameHomeBasedAddress FarmersInsuranceB/M881192ndStS#111 142 Froggy'sDetailingIncHB7966HillsideTrlS 143 8711EPointDouglasRdS GentleDentistryCottageGroveB/M#110 144 GerlachServiceIncB/M7473LamarAveS 145 8599WPointDouglasRdS GlossSalonB/M#500 146 8711EPointDouglasRdS GNCB/M#106 147 GoldmillsMarketingHB7393IsletonAveS 148 GoodwillB/M7375HardwoodCtS 149 GordonR.NesvigAttorneyB/M750180thStS 150 GreatClipsB/M743080thStS#101 151 8711EPointDouglasRdS GreatClipsB/M#107 152 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