Edmonds Mayor Mike Nelson said Thursday he is proposing that the majority of the $1.2 million the city will receive from the federal CARES Act be allocated to Edmonds small businesses struggling to stay afloat during the COVID-19 pandemic.
The mayor’s new Business Support Grant program would allocate up to $800,000 of the federal funds to support qualifying local small businesses through grants of up to $10,000. The idea, the mayor said in an announcement, is to help the most vulnerable businesses and their employees, many of whom live in Edmonds.
Under Nelson’s proposal, which must be approved by the Edmonds City Council, the remaining $465,100 in Cares Fund monies would be used to help defray the mounting, unbudgeted costs associated with the city’s functions, services and support in response to the COVID-19 outbreak.
“In the early days of the pandemic, staff bought their own equipment so they could do their job immediately,” said Public Works Director Phil Williams. “Between that and the much higher threshold of sanitization at every public-facing facility, we — like most businesses and even households — have a raft of unexpected bills.”
Nelson said that while most businesses have felt the economic impact of COVID-19, “storefront businesses that typically rely on walk-in customers and foot traffic, including those owned by people of color and women, have felt the pain the worst,” Nelson said. “Business revenue has dropped – in some cases by up to 90%.”
The mayor added that those businesses — which include retail, restaurant/café, personal service and entertainment establishments — provide hundreds of jobs in the community for entry-level and lower-skilled workers who earn less than $20/hour.
“These grants will help our most vulnerable businesses stay open, which in turn will help employees get back to work,” Nelson said.
The federal government earmarked CARES Act funds for local governments to address needs related to the COVID-19 outbreak. Edmonds’ share will be $1,265,100.
The grant eligibility criteria would include:
- Retail, restaurant/café, personal service, entertainment establishments – with particular consideration of businesses owned by people of color, women, veterans, and other minorities
- 5 to 30 employees
- At least 30% loss in business/revenue year over year in April and/or May
- At least one year in business as of April 1, 2020
- Not already recipients of state or county business support grants
Geographic distribution across the city will also be a consideration in grant program implementation.
Nelson said that combined with the $200,000 Community and Economic Relief Program he implemented in early April, the proposal to disburse up to $800,000 to local businesses “will mean a commitment of $1 million to our local community in response to the COVID-19 crisis.”
The city council is scheduled to discuss the mayor’s proposal during its committee of the whole meeting June 9, which will be conducted virtually via Zoom starting at 7 p.m. It is expected that a final city council decision on the proposal would be made at the June 16 council meeting.
I’m very pleased to see this and thank you to Mayor Nelson for proposing this. As a CPA, I’ve seen first hand how small businesses in our community are getting clobbered from the economic fallout of COVID-19. Grants to help defray both the dramatic loss in revenue and the increased overhead costs from PPE will be a great start i helping our businesses survive the recovery.
I do have two issues with the proposal.
1) Why does the proposal discriminate against businesses that started after April 1, 2019? New businesses aren’t hurting any less than well-established ones. For example, Barre3, Gracie Barra, & Workhorse HQ are just three locally owned small businesses that had launched within weeks of being forced to shut-down. That doesn’t count the many, many, many more small businesses that launched after April 1st of 2019. I suppose this benchmark is used ensure the city has a tangible measurement for targeting impacted businesses and not providing money if a business was already moribund prior to COVID-19. I would recommend putting in place a system to review new businesses different from those that were in business over a year.
2) Why eliminate businesses under 5 employees? Many of our smaller shops, restaurants & salons have 2-4 employees or are sole proprietors. I can understand the desire to keep this to “small” businesses and 30 employees is likely a good metric to use. But I don’t understand the decision to eliminate those under 5 employees. Perhaps the $10,000 “cap” could be scale-able based on employee count? For every employee under “5” the maximum grant available drops by $2,000.