Council Sends Small Business Relief Fund Proposal to Committee for Fine Tuning

The Pasadena City Council Monday agreed to send a proposal for a small business relief fund to the Council’s Economic Development and Technology Committee for consideration at their upcoming meeting next week.

The fund, as suggested by former Councilmember and current Pasadena Chamber of Commerce President and CEO Paul Little, would be designed to provide “seed money” for economic relief to qualifying local business owners who have been seriously affected by the COVID-19 pandemic.

“Our local businesses are suffering. Studies show that 25% of small businesses in the US will fail over the next five months. Most that fail will do so for lack of $10,000 to $15,000. You can help save Pasadena small businesses by providing $1 million in seed money to a fund to provide grants of $10,000 to qualifying local small businesses,” Little told the council in a letter.

Little also said that the Pasadena Community Foundation and the Pasadena Chamber of Commerce and Civic Association have also been exploring a collaboration to create a dedicated fund for $10,000 grants to local small businesses to help them survive the current pandemic.

The “Pasadena Small Business Relief Fund” could be seeded with the City donation and augmented with funds from private donors, Little suggested. He said that the fund is based on a model being pioneered by the Monterey Peninsula Small Business Relief Fund, a collaboration between the Monterey Peninsula Chamber of Commerce and the Community Foundation of Monterey, with financial support from the City of Monterey.

While Councilmembers voiced no real opposition to the fund, much of the discussion centered around how such a fund would actually be implemented.

Councilmember Victor Gordo, chair of the EdTech Committee, said that one option would be to take between $500,000 and $1 million from the City’s general fund reserve and then “put a call out to some of the larger corporate entities in town.”

Said Gordo, “We would say, ‘Let’s redirect some of your corporate giving, to the extent it still exists, to this fund,’ and let’s help some of our smaller businesses in Pasadena. I think in the long run that helps our local economy. It helps the larger corporate businesses.”

“Kaiser [Perrmanente], for example,” he continued, “might be interested in redirecting some of their corporate giving to a fund like this, that we would provide the seed money for.”

Councilmember Andy Wilson agreed, and suggested some type of “corporate matching fund.”

“I think the goal here is really to help the small businesses that are driving a meaningful portion of local employment so that we can get people back to work and allow small businesses to reopen,” Wilson said.

Councilmember Margaret McAustin also agreed, and suggested that an unused $700,000 from a public art project fund, previously associated with the GT 5 power plant, might be tapped to provide the money.

McAustin explained, “Even though the money was set aside as a requirement of 1% for the arts contribution, it seemed unseemly at the time to be cutting back on some other things in the city and then spending that money on a big public art project.”

“So I’m wondering if we could broaden the purpose,” she continued, “and maybe take some of that money, or take the interest that money might have been bringing in, and use that, because that would not be taking it away from the public coffers.”

McAustin added, “ I think we ought to be a little bit creative, and this is an area where we have a lot of money sitting in an account.”

Councilmember John Kennedy also spoke in favor of the idea, particularly stressing the timing and urgency of the matter, and directing city staff to create a “smorgasbord of options as soon as possible.”

Mayor Terry Tornek told the Council that while he did not want to use General Fund money for the business fund, he recognized the seriousness and urgency of the issue.

“This is a huge crisis for the business community,” said the mayor. “And I quite agree with the comments that say that it should be made clear that this is a tangible issue, an important issue, a priority issue, for the city of Pasadena. And the easiest way to demonstrate that is when you, put your money where your mouth is.”