Title
Staff Report for a City of San Leandro City Council Resolution Authorizing the Transfer to Alameda County of One Hundred Fifty Thousand Dollars ($150,000) of Budgeted Business Incentive Funds to be Administered as Small Business Grants to San Leandro Businesses as Part of the County of Alameda CARES Act Grant Program During the COVID-19 Pandemic
Staffreport
SUMMARY AND RECOMMENDATIONS
Staff recommends that the City of San Leandro City Council adopt a Resolution authorizing transfer to Alameda County of one hundred fifty thousand dollars ($150,000) of budgeted business incentive funds to be administered as small business grants to San Leandro businesses as part of the County of Alameda CARES Act Grant Program.
BACKGROUND
Following the initiation of the Alameda County Shelter-in-Place Order (Order) on March 17, 2020, many San Leandro businesses, including specialty retail, restaurants, personal services (hair, nails, etc.), and health and fitness businesses were required to close, or limited to pick up service only, in order to protect employees and customers and limit the spread of the COVID-19 virus. The Orders’ restrictions have devastated local businesses, particularly small service, food, and other direct customer serving businesses. Even as certain businesses have been permitted to reopen, small businesses continue to suffer from reduced customer traffic due to work from home arrangements and customers’ reluctance for person-to-person contact. With reduced sales, increased costs of operations due to required personal protective equipment and physical protective measures, and the cost of ongoing and past due rent, businesses continue to have significant financial challenges operating during the pandemic.
In recognition of the continued financial stress on small businesses, the Alameda County Board of Supervisors authorized the implementation of the Alameda County CARES Grant Program on November 10, 2020. The Alameda County CARES Grant Program is funded by the federal Coronavirus Aid, Relief and Economic Security (“CARES”) Act funds. The program will provide grants of up to $5,000 to small businesses that have been impacted by the COVID-19 pandemic.
Alameda County has allocated $5,000,000 to businesses in incorporated cities in Alameda County, and up to $3,000,000 in additional funds to match contributions to the grant program made by individual cities. The $5,000,000 in base funds will be distributed to small businesses across incorporated cities in Alameda County. The funds provided by cities and matched by the County will be distributed directly to small businesses within that city. The program opened on November 17, 2020 and accepted applications from businesses until November 30, 2020 at 11:30 p.m.
ANALYSIS
On an annual basis, the City provides funding for business incentives, which are administered by the Economic Development Division of the Community Development Department. Such funds are administered through the Business Incentive Program (<https://www.sanleandro.org/depts/cd/econdev/incentives.asp>), which provides forgivable loans to businesses for eligible physical improvements, including façade upgrades and kitchen and brewery buildouts in keeping with the goals and guidelines of the program. The goal of the program is to stimulate investment and business attraction and improve the city’s commercial districts. In Fiscal Year 2020-2021, a total of $175,000 is budgeted for the business incentive program, which is the typical amount budgeted for the past several years.
With the onset of the Coronavirus pandemic and the devastating business impacts it wrought, Economic Development staff have worked to focus business incentive funds where they are needed most. In May 2020, the City utilized $250,000 in FY2019-2020 available business incentive funds to provide $5,000 grants to small businesses through the San Leandro Small Business Continuity Grant Program. Staff recognizes that there continues to be significant need for business assistance at this time and recommends that $150,000 in available FY2020-2021 business incentive funds be allocated toward the Alameda County CARES Grant Program.
The local match feature of the Alameda County CARES Grant Program represents an opportunity to leverage additional business assistance funds. If the City provides $150,000 in matching funds, the County will match this contribution dollar-for-dollar, resulting in a total of $300,000 in grant funds available to eligible San Leandro businesses. At a grant amount of $5,000, this could assist up to 60 San Leandro businesses, in addition to any San Leandro businesses that are successful in the application for the $5,000,000 awarded through the county-wide process.
To be eligible for the Alameda County CARES Grant Program, businesses must be physically located in Alameda County and have between 1 and 25 employees. Self-employed individuals and sole proprietorships are also eligible. The businesses must have been negatively impacted by COVID-19, either by a closure of any length due to COVID-19 or layoff of one or more employees due to COVID-19. Applicant businesses must agree to follow State and County COVID-19 safe workplace guidelines and maintain a business license for their physical location. Chain businesses not headquartered in Alameda County, financial institutions, banks, lenders, landlords of residential or commercial businesses, publicly traded companies, and non-profit entities are all ineligible for the Alameda County CARES Grant Program.
Grants are for up to $5,000 and may be used for unreimbursed costs incurred from March
17, 2020 to December 30, 2020 for rent, mortgage or utility payments, payroll costs, general operating expenses, personal protective equipment, health and sanitation equipment, and/or costs for business adaptation including interior and exterior physical changes or digital technology equipment.
As noted above, applications were accepted from November 17, 2020 through November
30, 2020 at 11:30 p.m. Applications were accepted by the East Bay Economic Development Alliance (East Bay EDA), the organization designated by the County to run the program, through an online portal at www.eastbayeda.org/grants. The program flyer (Attachment 1) was distributed by staff to San Leandro businesses via email, shared widely on social media, and distributed by local and regional news and business partners, including the San Leandro Chamber of Commerce. Program information and application materials were available in multiple languages.
Legal Analysis
The Resolution authorizing the transfer of funds to Alameda County for distribution to small businesses through the Alameda County CARES Grant Program was reviewed and approved by the City Attorney.
Fiscal Impacts and Budget Authority
The transfer of $150,000 of budgeted funds was reviewed and approved by the Finance Department and the funds are included in the 2020-2021 Adopted Budget in Account 010-41-003-5890 - Economic Development Miscellaneous Funds.
ATTACHMENT(S)
Attachment to Staff Report
• Alameda County CARES Grant Program Flyer
PREPARED BY: Katie Bowman, Economic Development Manager, Community Development Department