ECONOMIC DEVELOPMENT AUTHORITY - Erik Thorvig, Community Development Director
Title
ESTABLISHING AN EMERGENCY FUNDING PROGRAM FOR BUSINESSES RELATED TO COVID-19
Background
Since the beginning of the COVID-19 pandemic, there have been a multitude of programs offered to businesses from the state and federal level to assist them with the financial impacts of COVID-19. Staff has been monitoring programs that other cities have offered. There are several peer cities, including Edina, Brooklyn Park, Maple Grove, St. Louis Park, Richfield, and Minnetonka that have adopted grant/loan programs. The structure between cities is very similar and generally involves a $250,000-$300,000 allocation from the HRA or EDA, a maximum loan/grant amount of $7,500-$10,000, and an application scoring system to prioritize need.
Staff feels it is an appropriate time for Blaine to consider adopting an emergency program for businesses related to the financial impacts of COVID-19. The following is a proposed structure of the program. This has been modeled after similar programs in other cities.
Funding: $250,000
Loan/Grant Amount: $2,500 for first employee + $500 for each additional employee up to $10,000
Eligible Businesses:
1. Businesses continuously operating in Blaine for at least a 12-month period (from June 1, 2019 to June 1, 2020).
2. Businesses with no more than 25 FTE Employees as of January 2020.
3. For-profit businesses only (public agencies or nonprofit organizations are not eligible).
4. Businesses who primarily sell pawned merchandise, guns, tobacco or vaping products are not eligible.
5. Home-based occupations are not eligible.
Consideration of applications will be weighted with more preference given to those who:
1. Were impacted by Minnesota Executive Order 20-04, 20-08 and 20-09; including (but not limited to):
a. Restaurants
b. Coffee Houses and Cafes
c. Beauty Salons, Barber Shops, Nail Salons, Spas, etc.
d. Medical or Dental facilities primarily performing elective procedures
e. Fitness Centers and Recreational Facilities
f. Amusement/Entertainment
2. Have operated in Blaine the longest.
3. Can demonstrate a high number or percentage of employees are Blaine residents.
4. Can demonstrate some extraordinary hardship related to COVID-19.
5. Can demonstrate that the business contributed to the fight against COVID-19 (by providing PPE’s, cleaning supplies, childcare to essential workers, etc.).
6. Is a female or minority-owned business.
There needs to be a determination whether this is a grant or loan program. Staff would recommend a grant program. A loan program poses several logistical issues including staff time dedicated to creating loan documents, monitoring of the loan payments and addressing default issues. Staff is also researching whether a grant program is refundable through the CARES act. Hennepin County adopted a similar program that was funded through CARES dollars.
Recommendation
Approve the attached Resolution.
Body
WHEREAS, businesses have been financially impacted by the COVID-19 pandemic; and
WHEREAS, various programs have been offered at the state and federal level to assist businesses during this challenging time; and
WHERAS, several HRAs and EDAs in the Twin Cities metro area have adopted programs to financially assist their local businesses impacted by the COVID-19 pandemic;
NOW THEREFORE, BE IT RESOLVED, that the Blaine Economic Development Authority hereby approves an emergency funding for businesses impacted by the COVID-19 pandemic and hereby directs the community development director to prepare formal documents to establish said program.
PASSED BY THE Blaine Economic Development Authority this 15th day of June, 2020.