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TO: Economic Development Authority
FROM: Christine Costello, Economic Development Director
DATE: October 30, 2020
RE: Small Business Emergency Assistance Grant Update
Background
In May 2020, the City Council and Economic Development Authority (EDA) approved a Small
Business Emergency Assistance Grant Program. The program was in response to the COVID-19
pandemic and provided financing to assist local businesses in our community to sustain their
operations, preserve employment, and prevent business closures. The intent of the grant
program was to promote the long-term economic vitality in the community.
The grant set aside up to $300,000 from the EDA Trust, to provide grants of up to $10,000 per
business. Businesses needed to provide evidence of income loss due to COVID-19 and Governor
Walz's Executive Orders. Businesses also needed to prove profitability before the pandemic. The
grants would help ensure the preservation of employment opportunities through the prevention of
business closure.
Through the grant process the City Council and EDA also revised the eligibility requirements to
assist more businesses. The revisions included:
Reduction in years of operation from two to one year,
Increase the number of full-time employees from 25 to 70, and
Allow businesses with annual gross income of $3.5 million or less to apply.
Eligible businesses were individually sent a letter and the link to the application. The program was
also advertised on the City's social media platforms and through the Cottage Grove Area
Chamber of Commerce. Ultimately, after three grant rounds the City Council and EDA were able
to assist 19 local businesses for a total in grant funds of $181,800. Below is a list of the businesses
assisted:
Businesses that Received Grants
All About Nails
New Century Salon
Belissimo Salon and Day Spa
Turbo Nails
Las Margaritas
Carbone's Kitchen and Pub
Mathnasium of Cottage Grove
Cottage Grove Florist
Dance by Kris
Cedarhurst
Historic John P. Furber Farm
Hound Around Resort
Healing Place of Cottage Grove
Salon 80 Hair Studio
Bongaards Family Meats
Integrity Dental
Oasis Chiropractic
Pretty Nails
VFW Post 8752
Economic Development Authority
Small Business Emergency Grant Award Update
October 30, 2020
Page 2 of 3
Discussion
As part of the grant process the businesses signed a Forgivable Loan Grant Agreement
(Agreement). The Agreement stated that the businesses had to use the funds for eligible
expenses, which included such expenses as paying fixed debts, current payroll, accounts
payable, taxes and paying direct business-related bills such as rent, mortgage, or utility fees and
other critical business expenses. The grantees had to use the grant funds by August 31, 2020
and then by November 1, 2020 provide a brief report to the City Council and EDA on how the
grant funds were used.
As part of the grant package each business received a grant reporting form. This form was again
provided to all the businesses in early August 2020. To date six grantees have submitted their
grant reporting. Below is a table outlining how they used their grant funds.
Business
Grant Amount
Use of Grant Funds
Carbone's Kitchen + Pub
$10,000
Various business expenses
related to menu
Cottage Grove Florist
$10,000
Rent for four months
Dance by Kris
$10,000
Payroll for one week, lease for
one month and utility bill for
two months
Healing Place of Cottage
$10,000
Various business expenses
Grove
for operation and massage
therapist training when
massage businesses were
completely closed
Hound Around Resort
$10,000
Three months of sales tax
payment
Integrity Dental
$10,000
Rent, property tax, and CAM
for one month
Mathnasium of Cottage
$10,000
Payroll for employees for two
Grove
months
New Century Salon
$10,000
Three months rent, one month
insurance and one month
utility bill
Salon80 Hair Studio
$10,000
Rent for three months
Turbo Nails
$10,000
Rent for five months
VFW Post No. 8752
$10,000
Various business expenses
and insurance
Another mailing was sent out the week of October 19th for the businesses that have not
submitted their reporting. Two businesses remain to submit their reporting. Once they have
been submitted the grant reporting will be provided to the City Council and EDA.
Recommendation
No action required.
Economic Development Authority
Small Business Emergency Grant Award Update
October 30, 2020
Page 3 of 3
Attachments
None