City Council Approves COVID-19 Emergency Small Business Fund

After nearly two hours of discussion Monday, the City Council voted 7-1 to approve the creation of  the “COVID-19 Emergency Fund for Small Businesses.” 

Although Councilmember Gene Masuda was the only vote against the motion, he told Pasadena Now after the vote, “I was against the motion the way it was presented, yet I was in favor to accept the staff’s recommendation and not to add an extra step for the Council to view and approve the list of businesses receiving the funds. No matter what, I am pleased that businesses will receive needed funds to help their openings.”

Although the City Council was clearly in favor of establishing the fund, the members spent more than two hours in a withering discussion as to who exactly would administer, execute and approve the grant selections, and whether the Pasadena Community Foundation or the Pasadena Chamber of Commerce would sign the checks.

Councilmember Steve Madison insisted that the city should have final approval over the applicants, which drew the ire of Councilmember McAustin, who called that an “insult” to the foundation, which, along with the Chamber,  had helped create the fund. 

Councilmember Kennedy agreed with Madison, while Mayor Terry Tornek said that the approval process would be similar to Community Development Block Grants which are larger, but not approved by the full council.

Councilmember Gordo continued to insist that the applications “come back to the council,” or that perhaps the City staff should take one more look at the entire process, and return with a new report next week.

“We should move this forward now,” said Mayor Tornek, prompting the vote. 

According to the presentation by Eric Duyshart and Dave Klug of the City’s Economic Development Department,  the Fund would be established by the City of Pasadena and the Pasadena Community Foundation (PCF) with an initial contribution of $500,000. PCF would administer the fund and provide the funding to the Chamber.

The Chamber will issue checks to the businesses. In collaboration the City, PCF and the Chamber will work jointly to develop criteria and appoint a Selection Committee, the majority of whose members will be Pasadena residents. The process is slated to take eight weeks from start to finish.

The Selection Committee, which has yet to be named, will evaluate applications for grants of up to $10,000. Grants may be used for expenses associated with re-opening businesses in compliance with City requirements, retention or rehiring of staff, or other expenses specifically related to helping businesses continue to operate. 

Priority will be placed on businesses who can offer jobs and specifically those who employ Pasadena residents and/or businesses that will rehire when appropriate, employees who have previously been employed and demonstrated satisfactory performance pre-pandemic.

In addition, the City, the PCF and the Chamber will help publicize the Fund and encourage donations from private donors. The City will help to incentivize private philanthropy with a match of up to $250,000 for any additional funds raised on top of its initial $500,000 contribution. The Fund will accept matching donations from individuals, businesses, and foundations.

The Fund will provide grants to street-level, storefront businesses. 

Funds will be used for business related operational costs including COVID-19 related expenses and compliance, and according to the report reference will be given to those businesses which commit to and have the most likely chance of reopening and surviving this prolonged pandemic.

In order to qualify for the fund:

• Businesses must be based in the City of Pasadena and legally operating under all local, state and federal laws and current on any and all taxes/fees/license owed to the City of Pasadena,  and do not have a current lawsuit pending against the City of Pasadena.
• Businesses must also be in “good standing” with the State of California.

• This program is solely directed at small, street level, storefront businesses (including retail shops and restaurants) 2-20 full-time equivalent (FTE) employees as of March 1, 2020.
• Have $3.0 million or less in annual gross revenue as of latest completed Business Tax Returns or other financial reports that can demonstrate annual gross revenues to the satisfaction of the Selection Committee.
• Must be locally and independently owned (not part of a national or regional chain or a franchise).
• Business has experienced at least 25% decline in revenues due to COVID-19 between January 1, 2020 and April 30, 2020.
• Have not received $10,000 or more from either SBA Paycheck Protection Program (PPP) or SBA Economic Injury Disaster Loan (EIDL) or other SBA, government or other grant source related to COVID-19.
• Demonstrated a strong track record of business operations under current ownership.
• Provide the dedication and wherewithal to remain open for a period of 12 months after receipt of the relief funds.

Funding will not be limited to any one geographic location, said the report, but rather the Selection Committee will consider funding businesses spread throughout the City. 

Priority will also be given to businesses who employ Pasadena residents and/or businesses that will rehire when appropriate, employees who have previously been employed and demonstrated satisfactory performance pre-pandemic. 

Staff will return to the City Council at a future date and report on the number of businesses assisted and the grant amounts awarded, according to the staff report.