Committee advances pilot construction-mitigation grants, zero-interest loans and $100,000 ecosystem study for small businesses

The Committee on Economic Development and Workforce reviewed a proposed pilot program Feb. 24 aimed at mitigating construction impacts on small businesses and approved advancing the program for further consideration and funding steps.

Economic Development Manager Margaret Toscano and program staff described three linked pilots: active-construction financial support, pre-construction marketing grants, and post-construction façade/interior improvement grants. The proposals use federal American Rescue Plan Act (ARPA) funds as part of the funding mix, and the department described an existing mitigation program established in 2023 for businesses impacted by city construction.

Key program details presented in committee:

- Active-construction support: A $1 million pool intended to help businesses actively affected by city construction, with awards up to $35,000 each. Program materials indicated the phase could assist up to 40 small businesses and funds may be used for payroll, utilities and operating expenses. Eligible corridors include long-duration public-works projects and cultural/central areas identified in the presentation. Eligibility criteria include minimum 2023 sales of $10,000 and a revenue decline of at least $5,000 in the prior year.

- Pre-construction pilot: The department described a pilot totaling $80,000 with individual grants of $2,000 available to about 40 businesses to support marketing (social media, signage and outreach) ahead of construction that will start in fall 2025 on targeted corridors.

- Post-construction pilot: A $120,000 package of awards of $5,000 each to improve exterior or interior storefronts (paint, cleaning, signage, landscaping), intended to reach up to 24 businesses along three corridors where construction completed in 2024.

Staff said the program would not be strictly first-come, first-served; awards would be distributed based on need, duration of project impact, prior aid and equity considerations. The department proposed a $185,000 contract for program administration and recommended bringing the program to a council session B item on March 19 and a contract consideration on March 27.

Toscano said the department will use workshops, block walks and in-person assistance to help applicants complete proposals and that the pilot is deliberately scaled to be a test: “we don’t know we will be able to help every business that applies,” she said, describing a desire to balance reach and program sustainability. Staff also reviewed monitoring and evaluation plans: survey-based impact assessments at six, 18 and 36 months and marketing campaign metrics to measure local economic activity.

Committee members pressed staff on fund sources, administration costs and equity of corridor-based eligibility. Councilmembers asked whether additional non-ARPA funding sources were being sought and whether the proposed 13 percent administrative fee (presented as $185,000) was negotiable. Staff responded that administration costs were negotiable and that the department was evaluating savings and additional funding options for future budget years.

The committee voted to advance the pilot package and supporting actions; members recorded unanimous support during the meeting (no roll-call tally was recorded in the audio transcript). Next steps in the materials: March 19 committee/council session B for program approval and March 27 consideration of a contract to administer the program. Outreach and marketing are scheduled for April–May; applications will be accepted in June, with awards and disbursements targeted by the end of September.

Separately, staff introduced a proposed $100,000 study of the small-business ecosystem to analyze investments since 2020, identify gaps in access to capital and produce recommendations. Staff said the study contract would be competitively procured and the final report would be due in December. Committee members supported the study and asked that hospitality and restaurant impacts be included as a focus area.

The committee’s discussion included references to prior years’ assistance (noted awards and ARPA-funded disbursements dating back to 2022–2024), as well as ongoing programs such as zero-interest loans (the presentation named Wells Fargo as a partner for a prior zero-interest loan program). Staff confirmed ongoing tracking of program outcomes and monthly/quarterly reporting plans to demonstrate effectiveness before future budget commitments.