Title
Light Rail Small Business Financial Assistance Program (Ordinance S-48305)
Description
Request to authorize the City Manager, or his designee, to continue the Light Rail Small Business Financial Assistance Program (SBFAP) Pilot underway along the South Central Extension/Downtown Hub (SCE/DH) and the Northwest Extension Phase II (NWEII) light rail alignments through the duration of construction for both projects, which are anticipated for completion in 2024, and to expand the eligibility criteria as recommended below.
Report
Summary
The SBFAP Pilot, funded through T2050 and the Phoenix Community Development Investment Corporation (PCDIC), is facilitated by Valley Metro and administered by Prestamos CDFI, LLC. The Pilot opened for applications in mid-March 2021. As the Pilot's initial year is scheduled to expire in March 2022, this report provides information on the Pilot's current state and recommendations for modifying and continuing the Pilot.
Program Pilot
In response to requests from area businesses, the SBFAP Pilot was created to provide direct financial assistance to help mitigate commercial interruptions for locally-owned small and micro businesses that have been directly impacted by construction along the South Central Extension/Downtown Hub and the Northwest Extension Phase II light rail extension corridors. The Pilot has a two-tiered approach to provide funding:
- Tier I - offers $3,000 in program year financial assistance; and
- Tier II - offers up to $9,000 in program year assistance based on demonstrated revenue impact during the construction period.
The current SBFAP Pilot's eligibility criteria for affected businesses are:
Tier I
- Be physically located on, or directly accessed from: 1) Central Avenue, between Jefferson Street and Baseline Road (for SCE/DH); 2) Dunlap Avenue, between 19th and 25th Avenues (for NWEII); 3) 25th Avenue, between Dunlap Avenue and Mountain View Road (for NWEII); 4) Mountain View Road, from 25th Avenue to the former Metrocenter Mall property (for NWEII); or 5) the Metrocenter Mall property, as eligible businesses in the former Metrocenter Mall property are also within the program boundaries (for NWEII);
- Be a locally owned business with 15 or fewer employees and $500,000 or less in annual revenue for the overall business;
- Be currently open and operational on the affected light rail construction alignment with posted hours of operation, as well as open and operational prior to the start of construction;
- Conduct business directly with consumers where transactions primarily take place at the location on the affected construction alignment;
- Be able to provide all necessary documents to verify program eligibility;
- Be in good standing with all local, state, and federal taxing and licensing authorities; and
- Sign a waiver releasing the City, Valley Metro, and any contractors selected to run the SBFAP Pilot from any claims related to revenue impacts arising out of light rail planning, design, and construction activities in order to receive this Pilot's funding support.
Tier II
- Meet all the requirements of Tier I;
- Be operational at least one year prior to the start of construction; and
- Demonstrate, via financial business records, a loss in revenue after the commencement of construction and related activities in comparison with the same period in the year prior to the start of construction.
The SBFAP Pilot's application is available online and in paper format in both English and Spanish. Business owners can also get assistance completing the application via an in-person visit with Prestamos staff at the location of their choice or by telephone.
Staff has gathered information and developed recommendations for consideration in continuing the SBFAP Pilot beyond the current program year. To date, 58 businesses have received more than $300,000 in financial assistance through this Pilot. An additional 20 applications are currently in process.
The following provides a couple of examples of customer feedback demonstrating the impact of the funds: “The process was very simple. We got the funds within two weeks. We used it for payroll to keep our employees. Having the extra income to help pay our bills really helped us.” Carlos Castillo, Owner, Chino-Mex. “The program has tremendously helped me and I really appreciate it if I can continue to receive help and until this construction is over. I really appreciate it and thanks a million.” Samson Davis, Owner, Sam's Barber and Stylist School.
The City of Phoenix and Valley Metro recommends approval to continue the SBFAP through the duration of construction, anticipated for completion on or about Dec. 31, 2024, and to revise eligibility criteria to better serve the needs of businesses along the South Central Extension/Downtown Hub and the Northwest Extension Phase II light rail extension.
Recommended Eligibility Criteria Revisions
To better meet the needs of businesses in these corridors by increasing access to the funding, staff recommends revising the eligibility criteria as shown below:
- Increase the business annual revenue threshold from not more than $500,000 to not more than $750,000; and
- Allow all otherwise eligible businesses that were open prior to the start of construction to participate by removing the requirement for businesses to have been open not less than one year prior to construction.
Financial Impact
This report does not seek approval of any additional funding. The extension of the program will utilize funds already allocated in the budget and approved during the creation of the SBFAP.
Concurrence/Previous Council Action
- The City Council approved implementation of the SBFAP Pilot (Ordinance S-47126) on Dec. 2, 2020.
- The Citizens Transportation Commission recommended approval of this item on Dec. 16, 2021, by a vote of 11-0.
- The Transportation Infrastructure and Planning Subcommittee recommended approval of this item on Jan. 19, 2022, by a vote of 4-0.
Public Outreach
Prior to and during the rollout of the SBFAP Pilot, Valley Metro's business assistance coordinators and Prestamos staff canvassed the corridors and visited all businesses on the alignment to introduce the Pilot and explain the application process in English and Spanish. They also handed out fliers, left door-knocker pamphlets, sent email blasts, and called each business to announce the Pilot. Prestamos and Valley Metro staff continue to conduct canvassing aimed at businesses who have not applied to the Pilot or completed the application process. In addition, the Pilot is receiving ongoing promotion with monthly business-assistance newsletters and phone call/emails to businesses. A promotional video was also filmed with Councilmember Carlos Garcia.
Location
The Northwest Extension Phase II will run along Dunlap Avenue to 25th Avenue, then north to Mountain View Road, and then west across Interstate 17, via an elevated structure over the freeway, to its terminus adjacent to Metrocenter Mall.
Council Districts: 1, 3 and 5
The South Central Extension Downtown Hub will run along Central Avenue, from Jefferson Street to Baseline Road.
Council Districts: 7 and 8
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Public Transit Department.