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HomeMy WebLinkAbout8.1 American Rescue Plan Act Small Business Support Grant Programs (Commercial Rent Relief and Outdoor Operations) (2)STAFF REPORT CITY COUNCIL Page 1 of 4 Agenda Item 8.1 DATE:July 20, 2021 TO:Honorable Mayor and City Councilmembers FROM:Linda Smith, City Manager SUBJECT:American Rescue Plan Act Small Business Support Grant Programs (Commercial Rent Relief and Outdoor Operations) Prepared by: Hazel L. Wetherford, Economic Development Director EXECUTIVE SUMMARY: The City Council will consider approving two new small business support grant programs (Commercial Rent Relief and Outdoor Operations) using American Rescue Plan Act funding to help mitigate the severe impacts of the pandemic on small businesses. STAFF RECOMMENDATION: Adopt the Resolution Approving the Commercial Rent Relief Grant Program and Outdoor Operations Grant Program. FINANCIAL IMPACT: The proposed Commercial Rent Relief Grant and Outdoor Operations Grant programs would require using approximately $1.2 million from the American Rescue Plan Act funding. DESCRIPTION: On April 20, 2021, the City Council adopted Resolution No. 37-21 approving the American Rescue Plan Act (ARPA) budget for Fiscal Year 2021-22. As part of that approval, approximately $1.2 million was encumbered for future COVID-19 related Economic Development programs to be reviewed and approved by the City Council at a future meeting. It should be noted that the original allocation amount has been reduced and Staff is preparing to bring an update back to the City Council following the release of the final guidance by the Treasury Department. This should occur at the August 2021 City Council meeting. This report assumes that the City Council does not wish to change the previously allocated funds for economic development purposes at the future meeting. As the City Council is aware, Staff has worked extensively with individual business owners, the Dublin Chamber of Commerce, and other regional organizations to help businesses adapt to the 870 Page 2 of 4 changing health orders issued by the State of California and Alameda County. Over the past few months, Staff has continued to do outreach to businesses and landlords in Dublin, holding roundtable discussions with property managers, landlords, restaurants, and small businesses. As is the case with a majority of our outreach, Staff continues to hear that rent relief is the top priority for our small businesses who continue to struggle to “catch up” on past rent due to the temporary closures and/or limited service many of them experienced over the past 16 months. In addition, even with the lifting of the Blueprint for a Safer Economy, many of our eating establishments are seeing continued demand for outdoor dining options. To assist with varying recovery efforts, Staff is proposing two grant programs that allows for flexibility in addressing the needs of various business sectors. As it relates to funding, Staff is recommending $1 million of the ARPA funds to launch the Commercial Rent Relief Grant Program, which could assist 100 businesses if all of them received a $10,000 grant, and approximately $235,000 to fund the Outdoor Operations Grant Program. The following is a summary of each program. Commercial Rent Relief Program The proposed Commercial Rent Relief (CRR) Program would provide $10,000 grants to 100 qualified commercial tenants with at least $10,000 in rent arrears, paid directly to the landlord. To receive grant disbursements, landlords must declare their intent to continue leasing space to the qualified tenants through 2021, agree to not start any eviction proceedings on the qualified tenant through 2021, and forgive $10,000 in rent arrears from the tenant’s outstanding balance. The CRR would be open to all eligible businesses; however, a priority will be placed on restaurants, retail, and personal service (fitness, salon and spa) establishments. Please refer to Attachment 2 for the CRR Grant Program Overview. Tenant (Business) Eligibility Requirements and Restrictions Under the CRR Grant Program, eligibility criteria include, but is not limited to: Physical location in the City of Dublin, possession of a valid City of Dublin Business License (as of March 1, 2021) and be in good standing with the City Minimum of one employee with a maximum of 50 full-time employees At least $10,000 in commercial rent arrears from March 31, 2020 to present A commercial lease showing the business as the master tenant Under the terms of the proposed program, businesses not eligible to receive a CRR Grant include, but are not limited to: Lending and investment institutions and insurance companies Non-profit entities Hotels Professional services Home-based businesses Corporately-owned chain/franchise stores 871 Page 3 of 4 Landlord Eligibility Requirements Under the CRR Grant Program, landlord eligibility criteria include, but is not limited to: Apply grant funds to tenant’s rent arrears balance Attest that the tenant is a master lease tenant Declare intent to continue leasing tenant in current space through 2021 Declare to not start eviction process on the qualified tenant through 2021 Sign an agreement confirming all the above Time Frame Applications will be received over a two-week period and will be considered complete when all required documentation is submitted. Should the number of qualified applications exceed the number of grants available, a lottery process will determine which applications receive grants using the priority criteria for restaurants, retail, and personal service when screening applications. It should also be noted that there is an element of risk involved with this program. Given the uncertainty of the business climate and unforeseen circumstances, some small businesses may permanently close even after receiving financial support. Outdoor Operations Grant Program The proposed Outdoor Operations Grant Program (OO) would help local eating establishments and retailers in Dublin who are looking to provide an outdoor area for dining or shopping. The program will reimburse a variety of eligible expenses related to long-term temporary or permanent outdoor operations incurred by the business. For the purpose of this program, long- term temporary is considered outdoor seating that is permitted until September 30, 2022, and permanent outdoor operations is outdoor seating that would extend beyond the September 30, 2022 timeframe in perpetuity. Please refer to Attachment 3 for the OO Grant Program Overview. The two grant opportunities would include: Mini grants up to $10,000 for improvements that fall under the long-term temporary category, or Grants of up to $50,000 for improvements that fall under the permanent outdoor operations category. Business Eligibility Requirements and Restrictions Under the OO Grant Program, eligibility criteria include, but is not limited to: Physical location in the City of Dublin, possession of a valid City of Dublin Business License (as of March 1, 2021) and be in good standing with the City Eating or drinking establishments (i.e., restaurant, bakery, bar, brewery, café, coffee/tea, etc.) Retail establishments (which sells goods/merchandise to the general public) (considered on a case-by-case basis) Under the terms of the proposed program, businesses not eligible to receive a OO Grant include, but are not limited to: Corporately-owned chain/franchise stores 872 Page 4 of 4 Home-based businesses Hotel Examples of Eligible Expenses Under the OO Grant Program, examples of eligible expenses include, but is not limited to the following: Furniture Tents, canopies, shade sails, umbrellas, and other weather protection Lights, heaters, plexi-shield, safety barricades, etc. Physical improvements to install a take-out/pick-up window, patio, deck, shade structure, wheelchair accessible ramp, etc. Digital technology equipment and/or services (i.e., online or contactless ordering or payment systems, upgrades to Wi-Fi, etc.) (limit of up to $5,000) City application fees (Staff time and materials) Dublin San Ramon Services District sewer capacity fees on a case-by-case basis Cost of architecture/design services, etc. (available only to permanent outdoor operation applicants with a limit of up to $5,000) Time Frame Applications will be accepted on a first-come, first-served basis, and will be accepted on a rolling basis until funding has been exhausted. In June 2021, Staff presented this recommendation to the Economic Development Committee. The Committee supported the concepts included in this report and unanimously recommended that Staff bring the item before the City Council for consideration. This recommendation falls under the Committee’s purview to provide policy guidance and direction on economic development activities. STRATEGIC PLAN INITIATIVE: None. NOTICING REQUIREMENTS/PUBLIC OUTREACH: The City Council Agenda was posted. ATTACHMENTS: 1) Resolution Approving the Commercial Rent Relief Grant Program and the Outdoor Operations Grant Program 2) Exhibit A to Resolution – Commercial Rent Relief Grant Program Overview 3) Exhibit B to Resolution – Outdoor Operations Grant Program Overview 873 Attachment 1 Reso. No. XX-21, Item X.X, Adopted 7/20/21 Page 1 of 2 RESOLUTION NO. XX – 21 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN APPROVING THE COMMERCIAL RENT RELIEF GRANT PROGRAM AND OUTDOOR OPERATIONS GRANT PROGRAM WHEREAS,on April 20, 2021, the City Council adopted Resolution No. 37-21 approving the American Rescue Plan Act (ARPA) budget for Fiscal Year 2021-22; and WHEREAS,as part of the City Council’s adoption of Resolution No. 37-21, approximately $1.2 million was encumbered for future COVID-19 related Economic Development programs; and WHEREAS,during the shelter in place, self-isolation, and other social distancing, many small business owners experienced substantial loss of business income as a result of business closures or the loss of hours, hindering their ability to pay rent or to maintain employees on payroll; and WHEREAS,small business owners in these circumstances have faced possible evictions, layoffs, or have been forced to permanently close as a result of the pandemic; and WHEREAS,businesses are an integral part of the Dublin community from the jobs they provide residents to the essential services and amenities supported by the revenues they generate; and WHEREAS,to assist in retaining businesses that are experiencing severe impacts due to COVID-19, Staff is proposing the creation of two new small business support grant programs – Commercial Rent Relief and Outdoor Operations; and WHEREAS,the focus of these programs is on small businesses, primarily restaurants, retailers, and personal service because they have been the most severely affected; and WHEREAS,small businesses are key providers of sales tax revenues that allow the City to provide services and programs that broadly benefit the community; and WHEREAS,the City of Dublin’s small business community is imperative to the City’s economic health and viability. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does hereby approve the Commercial Rent Relief Grant Program and the Outdoor Operations Grant Program attached as Exhibit A and B to this Resolution. BE IT FURTHER RESOLVED that the City Manager or her designee is hereby authorized and directed to a) execute any documents and/or agreements necessary to carry out the purpose and intent of this Resolution, in such form as approved by the City Attorney, including but not limited to, the associated Commercial Rent Relief Grant Program Agreements with property owners, and b) make any necessary, non-substantive changes to the programs or take other actions necessary to carry out the purpose and intent of this Resolution. 874 Reso. No. XX-21, Item X.X, Adopted XX/XX/21 Page 2 of 2 PASSED, APPROVED AND ADOPTED this 20th day of July 2021, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ______________________________ Mayor ATTEST: _________________________________ City Clerk 875 City of Dublin | Commercial Rent Relief Grant Program Overview Program Description The Commercial Rent Relief (CRR) Grant Program would provide $10,000 grants to 100 qualified commercial tenants with at least $10,000 in rent arrears, paid directly to the landlord. To receive grant disbursements, landlords must declare their intent to continue leasing space to the qualified tenants through 2021, agree to not start any eviction proceedings on the qualified tenant through 2021, and forgive $10,000 in rent arrears from the tenant’s outstanding balance. Business (Tenant) Eligibility Requirements and Restrictions The CRR Grant Program is open to all eligible businesses; however, a priority will be placed on restaurants, retail and personal service (fitness, salon and spa) establishments. Under the CRR Grant Program, eligibility criteria include, but is not limited to: •Must be physically located in the City of Dublin •Must possess a valid City of Dublin Business License (as of March 1, 2021) •Must be in good standing with the City •Must have a minimum of one employee with a maximum of 50 full-time employees •Must have at least $10,000 in commercial rent arrears from March 31, 2020 to present •Must have a commercial lease showing the business as the master tenant (not subletting) •Must Not be a lending and investment institutions and insurance companies •Must Not be a home-based business or non-profit entity •Must Not be a corporately owned chain/franchise store, professional service, or hotel Landlord Eligibility Requirements •Must apply grant funds to tenant’s rent arrears balance •Must attest that the tenant is a master lease tenant •Must declare intent to continue leasing tenant in current space through 2021 •Must declare to not start eviction process on the qualified tenant through 2021 •Must sign an agreement confirming all of the above Program Timeline (subject to change) • Application Submittal: Friday, July 23, 2021 through Sunday, August 8, 2021 • Application Review: Monday, August 9, 2021 through Friday, August 20, 2021 •Preapproval Notification: Week of August 23, 2021 •Funds Disbursement:Week of August 30, 2021 Documentation Requirements •Commercial lease showing business as the master tenant •Monthly breakdown of rent arrears from March 2020 to present •Signed Agreement with Landlord acknowledgement of requirements Attachment 2 Exhibit A to Resolution 876 City of Dublin | Outdoor Operations Grant Program Overview Program Description The Outdoor Operations (OO) Grant Program would help local eating establishments and retailers in Dublin who are looking to provide an outdoor area for dining or shopping. The program will reimburse a variety of eligible expenses related to long-term temporary or permanent outdoor operations incurred by the business. For the purpose of this program, long-term temporary is considered outdoor seating that is permitted until September 30, 2022, and permanent outdoor operations is outdoor seating that would extend beyond the September 30, 2022 timeframe in perpetuity. Grant Opportunities There are two grant opportunities available for businesses which include: •Mini grants up to $10,000 for improvements that fall under the long-term temporary category, or •Grants of up to $50,000 for improvements that fall under the permanent outdoor operations category. Business Eligibility Requirements and Restrictions Under the OO Grant Program, eligibility criteria include, but is not limited to: •Must be physically located in the City of Dublin •Must possess a valid City of Dublin Business License (as of March 1, 2021) •Must be in good standing with the City •Must be an eating or drinking establishment (i.e., restaurant, bakery, bar, brewery, café, coffee/tea, etc.) •Must be a retail establishment (which sells goods/merchandise to the general public) (considered on a case-by-case basis) •Must Not be a corporately owned chain/franchise store •Must Not be a home-based business or hotel Examples of Eligible Expenses Under the OO Grant Program, examples of eligible expenses include, but is not limited to the following: •Furniture •Tents, canopies, shade sails, umbrellas, and other weather protection •Lights, heaters, plexi-shield, safety barricades, etc. •Physical improvements to install a take-out/pick-up window, patio, deck, shade structure, wheelchair accessible ramp, etc. •Digital technology equipment and/or services (i.e., online or contactless ordering or payment systems, upgrades to Wi-Fi, etc.) (limit of up to $5,000) •City application fees (Staff time and materials) •Dublin San Ramon Services District sewer capacity fees on a case-by-case basis •Cost of architecture/design services, etc. (available only to permanent outdoor operation applicants with a limit of up to $5,000) Program Timeline Applications will be accepted on a first-come, first-served basis, and will be accepted on a rolling basis until funding has been exhausted. Attachment 3 Exhibit B to Resolution 877