The city’s Housing and Community Development Committee unanimously recommended sending $75,000 of federal funds to the Small Business Recovery Program, which received greater demand than its original funding sources could support.
The program is designed to support businesses negatively impacted by the pandemic, and received 75 eligible applications between Feb. 14 and April 15, according to a staff memo from Economic Development Coordinator Katie Boden presented at the committee’s meeting Tuesday at the Morton Civic Center, 2100 Ridge Ave.
The total requested by these businesses exceeded the more than $600,000 already given to the program, and 34 haven’t received grants. The existing funds include the original $250,000 from Evanston Thrives and $150,000 from participatory budgeting budgeted to the program, as well as an additional $94,000 in Legacy Business funds and $124,000 in TIF funds allocated in May by the Economic Development Committee.
In hopes of awarding grants to another seven to 10 businesses, staff recommend further boosting the program with the city’s Community Development Block Grant (CDBG) funds, which come from the U.S. Department of Housing and Urban Development (HUD). The particular $75,000 being requested is already earmarked for economic development efforts under the city’s existing funding plans submitted to HUD.
New restrictions
The CDBG funds come with a few new restrictions, however. For one, while the program’s previous awards could fund up to $25,000 of physical space improvements, staff are recommending the new awards be limited to nonconstruction expenses up to $10,000. Housing and Grants Supervisor Marion Johnson said this is because of certain CDBG requirements for construction projects, such as paying prevailing wages, which drive up expenses and blunt the grant’s potential impact.
“We could technically include it [construction expenses], but we know that there’s a very good chance that it wouldn’t benefit the business,” Johnson explained, “because they would get funding from us, but then their project costs would go much higher, so they wouldn’t see much of the benefit in getting these grants.”
Federal rules would also limit the CDBG grants to “microenterprises” of five or fewer people (including owners), and all owners must come from “low- to moderate-income” households which earn at or below 80% of the Area Median Income. Satisfying the income requirement will require owners to submit personal tax documentation, Johnson said, limiting the city’s ability to share information about which specific businesses benefit from this round of funding.
Council Member Juan Geracaris (9th Ward) later asked staff to consider providing “anonymized” information or a “general description” of the types of businesses benefiting from the new funding to aid the committee’s work in the future.
“It’d be nice to see the scoring and how everything kind of sorted out, and maybe find out ways we can include more folks based on what our scoring criteria is,” Geracaris said. “I personally don’t need to know people’s names, but it’d just be interesting for me to know what kind of business [receives the grants].”
City Council is expected to take a final vote on the allocation Monday at their next meeting. The committee will not meet in August during the city’s regular summer break for committee work, and will return in September with a “quite hefty” agenda, according to Johnson, which will include reviewing a draft update to the city’s Inclusionary Housing Ordinance.
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