Title
Revise Eligibility Criteria for Small Business Relief Grant Programs (Ordinance S-47029)
Description
Request to authorize the City Manager, or his designee, to expand the eligibility criteria for the Small Business Relief Grant to include additional Phoenix businesses impacted by the COVID-19 pandemic, and to subsequently amend agreements with the Phoenix IDA and Arizona Community Foundation (ACF) to reflect the expanded eligibility criterion. Further request authorization to establish Oct. 30, 2020 as the application deadline for the Small Business Relief Grant and the Microbusiness Resiliency Grant. Funding was authorized by City Council on May 20, 2020 from the City’s allocation of the Coronavirus Relief Fund received from the federal government. There is no impact to the General Fund.
Report
Summary
In April 2020, the City, in partnership with the Phoenix IDA and ACF, opened the first round of the Small Business Relief Grant program with $2 million. Nearly 200 Phoenix small businesses were awarded grants up to $10,000. The Phoenix Community Development Investment Corporation also offered $2 million in low-interest loans to some Phoenix small businesses not awarded grants in this initial offering.
In May 2020, the City, in partnership with the Phoenix IDA and ACF, opened the second round of the Small Business Relief Grant as well as two new grant programs: the Microbusiness Resiliency Grant and the Restaurant Restart Resiliency Grant.
On Aug. 26, 2020, City Council amended the Small Business Relief Grant's and the Microbusiness Resiliency Grant's eligibility criterion that required an applicant business to have been operating in Phoenix since Jan. 1, 2019 to requiring an applicant business to have been operating in Phoenix for at least a year prior to submitting a grant application. As of Oct. 13, 2020, grant awards were as follows.
- Small Business Relief Grant ($5 million): To date, this grant has funded 461 businesses for a total of $3.6 million. Applicants for this grant must have fewer than 25 employees and less than $3 million in annual gross sales. Small Business Relief Grant recipients have included: restaurants, manufacturers, auto repair shops, retail stores, fitness studios, and others.
- Microbusiness Resiliency Grant ($6 million): To date, this grant has funded 1,361 microbusinesses, solo practitioners, and entrepreneurs for a total of $5.3 million. Applicants for this grant must have five or fewer employees, and less than $1 million in annual gross sales. Microbusiness Resiliency Grant recipients have included: travel agents, hair stylists and barbers, transportation providers, photographers, dry cleaners, nail technicians, accountants, musicians, and others.
- Restaurant Restart Resiliency Grant ($1 million): This grant, which closed on June 26, 2020, helped 103 business owners with grants up to $10,000 for expenses related to restarting their businesses, including: buying food, rehiring staff, implementing safety protocols for employees and customers, and resetting floor plans to accommodate social distancing. All funds allocated for this grant have been exhausted.
The original grant eligibility criteria required a business applying for the Small Business Relief Grant to be located in a low-income census tract. Due to the ongoing status of the pandemic, staff proposes removing this restriction. Many business owners contacted through the Community and Economic Development Department's small business outreach efforts have indicated this eligibility change would allow them to apply for this much-needed financial assistance.
Grant applicants will still need to demonstrate a sales loss of at least 25 percent due to COVID-19 and the City will continue to partner with the Phoenix IDA and ACF for the administration of these grants. ACF will continue to host the bilingual website for grant application submittals, provide customer service in English and Spanish to applicants, assemble and facilitate grant application review panels, notify applicants of grant application status, and distribute funds to grant awardees. Applications will be accepted through Oct. 30, 2020.
Contract Term
The City's existing grant funding agreements with the Phoenix IDA and the ACF will be amended to incorporate the revised eligibility criterion and application deadline.
Financial Impact
Total funding for these two grant programs will not exceed the $11 million previously authorized by City Council. No new funding is being requested.
Concurrence/Previous Council Action
City Council approved funding for the Small Business Relief Grant at its April 30, 2020 Policy meeting. At the May 5, 2020 Policy meeting, City Council approved additional funding to implement grant programs to assist Phoenix’s small businesses, microbusinesses and restaurants. On May 20, 2020, City Council authorized contracts related to these grants with the Phoenix IDA and ACF. On Aug. 26, 2020, City Council authorized grant eligibility expansion.
Department
Responsible Department
This item is submitted by Deputy City Manager Jeff Barton and the Community and Economic Development Department.