Title
Increase Funding for Small Business Grants Program (Ordinance S-47203)
Description
Request to authorize the City Manager, or his designee, to add $1,087,000 to the Small Business grants program to fund additional Phoenix businesses impacted by the COVID-19 pandemic, and to subsequently amend the agreement with the Arizona Community Foundation (ACF) to reflect the additional funding. Depending on when applications are approved, funds are available in either Coronavirus Relief Fund (CRF) or the General Fund. Further request authorization for the City Controller to disburse all funds related to this item.
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.
On Oct. 21, 2020, City Council further amended the Small Business Relief Grant's eligibility criteria to remove the requirement for a business to be located in, or adjacent to, a low income census tract and established Oct. 30, 2020 as the application deadline for the Small Business Relief Grant and the Microbusiness Resiliency Grant.
To date, the grant awards are as follows.
- Small Business Relief Grant ($5 million): This grant, closed Oct. 30, 2020, funded 685 businesses for a total of $5 million. Applicants for this grant had 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): This grant, closed Oct. 30, 2020, funded 1,506 microbusinesses, solo practitioners, and entrepreneurs for a total of $6 million. Applicants for this grant must have had 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, 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.
If approved, this additional funding will allow approximately 200-250 unfunded applications to now be awarded. ACF's fee for administering these grant awards remains at 1.9 percent. Upon City Council approval, funds will be sent directly to ACF so grant monies can be awarded expeditiously.
Contract Term
The City's existing grant funding agreement with the ACF will be amended to extend the contract term from Dec. 31, 2020 to Feb. 28, 2021.
Financial Impact
By adding this additional $1,087,000 to the Microbusiness Resiliency and Small Business Relief grants, the total funding for the small business grants program will not exceed $13,087,000. Funding is available in CRF through Dec. 30, after this date funds are available in the General Fund as a result of applying CRF to offset public safety salaries.
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. On Oct. 21, 2020, City Council authorized additional grant eligibility expansion, and at the Dec. 8, 2020 City Council Policy meeting, City Council approved additional funding for the small business grant program.
Department
Responsible Department
This item is submitted by Deputy City Manager Jeff Barton and the Community and Economic Development Department.