Title
Execute Contracts to Implement Small Business Relief Grant Programs (Ordinance S-46645)
Description
Request to authorize the City Manager, or his designee, to enter into contracts with the Phoenix IDA, the Arizona Community Foundation (ACF), and other entities as deemed necessary to fund small business grants in response to the COVID-19 pandemic. Further request authorization for the City Controller to disburse funds to implement these grant programs. Total funding for these grant programs will not exceed $12 million. Funding is available through the City’s allocation of Coronavirus Aid, Relief, and Economic Security (CARES) Act 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 in seed funding. More than 200 Phoenix small businesses were awarded up to $10,000. The demand for funding exhausted the initial pool of funds within a few days of the grant program opening. The Phoenix Community Development Investment Corporation also offered $2 million in low-interest loans to some Phoenix small businesses that were not awarded grants in this initial offering.
On April 30, 2020, City Council initially approved allocating $5 million to the Phoenix IDA for its Small Business Relief Fund. On May 5, 2020, the City Council approved grant programs to assist Phoenix’s small businesses ($5 million), microbusinesses ($6 million), and restaurants ($1 million) that have lost at least 25 percent of their sales due to COVID-19.
Small Business Relief Grant
If approved, a grant funding agreement will be executed with the Phoenix IDA to direct $5 million to reopen the Small Business Relief Grant, which will help approximately 500 additional Phoenix small businesses located in low-income census tracts with grants up to $10,000, and will fund additional qualified applications who were not able to be funded in the first round. The grant requirements for this second round of funding will be consistent with those required in the first round: fewer than 25 employees, less than $3 million in sales, and in operation since Jan. 1, 2019.
The Phoenix IDA will continue to use the ACF to administer this Fund, including hosting the website for grant application submittals, providing customer service in English and Spanish to applicants, assembling and facilitating grant application review panels, notifying applicants of grant application status, and distributing funds to grant awardees. The City will release the $5 million to the Phoenix IDA on a rolling basis as needed to fund grants approved for award by ACF, a nonprofit organization with a mission to lead, serve and collaborate to mobilize enduring philanthropy for a better Arizona. The City's funding allocation to the Phoenix IDA will include ACF’s fees to administer the program.
Additional Small Business Resiliency Grants
If approved, a grant funding agreement will also be executed directly with the ACF. The ACF will administer the following programs, which are open to eligible businesses located anywhere in Phoenix that have been in operation since Jan. 1, 2019.
- Microbusiness Resiliency Grant Program ($6 million): This fund is expected to help more than 1,100 microbusinesses, solo practitioners, and entrepreneurs with fewer than five employees and less than $1 million in gross sales by offering grants up to $5,000.
- Restaurant Restart Program ($1 million): This fund is expected to help nearly 100 restaurants and food trucks cover up to $10,000 in expenses for restarting their businesses, including buying food, rehiring staff, implementing safety protocols for both employees and customers, and resetting floor plans to accommodate for social distancing.
ACF was selected as a Sole Source provider given its experience administering the Phoenix IDA’s Small Business Relief Grants, the infrastructure already in place and its long-standing reputation in the community for financial stewardship and integrity. The City will release the $7 million to the ACF on a rolling basis as needed to fund grants approved for award. This funding allocation will include ACF's fees to administer the programs.
Starting May 21, 2020, and continuing over the next few weeks, applications will open for each of the different grant programs.
Contract Term
The City's grant funding agreements for the Phoenix IDA and the ACF will begin as soon as possible, expire on Dec. 31, 2020, and include additional terms as necessary to implement the programs.
Financial Impact
Total funding for these grant programs will not exceed $12 million. Funding is available through the City’s allocation of Coronavirus Aid, Relief, and Economic Security (CARES) Act received from the federal government. There is no impact to the General Fund.
Concurrence/Previous Council Action
City Council approved allocating $5 million to the Phoenix IDA for its Small Business Relief Fund 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.
Department
Responsible Department
This item is submitted by Assistant City Manager Deanna Jonovich and the Community and Economic Development Department.