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HomeMy WebLinkAbout4.2 Award Small Business Emergency Assistance Program Grants TO: Economic Development Authority FROM: Christine Costello, Economic Development Director DATE: June 1, 2020 RE: Award Small Business Emergency Assistance Grants – Round Two Background On May 6th, the City Council held a workshop to discuss a proposed Small Business Emergency Assistance Program. The City Council discussed that by providing financing to assist local businesses that it would help our local business community in sustaining their operations, preserve employment, and prevent business closures. The intent of the grant program is to promote the long-term economic vitality in the community. The City Council recommended moving forward with establishing a program. Then on May 7th the Economic Development Authority (EDA) reviewed the proposed grant program and recommended approval of the program as well with a vote of 7 to 0. The grant program provides $300,0000 from the EDA Trust fund, which is not City tax dollars to provide grants of up to $10,000 per 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. On June 2nd, the EDA approved nine grant applications of $10,000 for the following businesses:  All About Nails  Belissimo Salon and Spa  Dance by Kris  Historic John P. Furber Farm  Las Margaritas  Mathnasium of Cottage Grove  New Century Salon  The Healing Place of Cottage Grove  Turbo Nails Originally ten grant applications were received but one application was incomplete. The business, Rustic Floral Boutique has been given the opportunity to complete their application so their application can be considered for a future grant round. Economic Development Authority Award Small Business Emergency Grants June 1, 2020 Page 2 of 2 Also, on June 2nd the EDA considered revisions to the eligibility requirements to allow for a more robust application pool. The revisions included:  Business who have been in operation for one year, instead of two years,  Increase the number of full-time employees from 25 to 70, and  Allow application for businesses with annual gross income of $3.5 million or less The changes to the grant eligibility guidelines would encompass more local businesses who have been impacted by the COVID-19 pandemic. The City Council approved the nine grant awards and the proposed changes to the eligibility guidelines on June 3rd with a vote of 4 to 0. Discussion The deadline for the second round of applications was May 29th before the revisions to the eligibility guidelines, since the originally the thought was the program was not being advertised robustly enough. The second round had five grant applications for consideration. They include:  Carbones Kitchen and Pub  Cedarhurst  Cottage Grove Florist  Hound Around  Salon 80 Hair Studio All of the grant applicants requested grants of $10,000. Ehlers reviewed the applications based on the revised criteria and recommended grants of $10,000 each. The first round issued nine grants totaling $90,000, and the second round issued $10,000 grants to the five businesses it would total $50,000. Leaving a remaining $160,000 (16 grants) for local businesses to apply for a grant as long as they meet the new guidelines. A lottery system would be used if greater than 16 applications were received for the final round. Additionally, all the business are required to provide a brief report in approximately two months (November 1, 2020 at the latest) to the EDA on how the grant funds were used for eligible expenses such as 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. Recommendation Consideration of: 1. Approval of five (5) Small Business Emergency Assistance Grants each for $10,000 to Carbones Kitchen and Pub, Cedarhurst, Cottage Grove Florist, Hound Around, and Salon 80 Hair Studio. Attachments Ehlers Memo dated June 3, 2020 Grant Request Status Credit Check Eligibility