Local small businesses will now be able to get grants from the City of Santa Clara to lessen the impact of lost business due to the COVID-19 pandemic.
At a special meeting Wednesday, the City Council unanimously approved creating a $500,000 grant program for eligible businesses and nonprofits that would give them $5,000 or $10,000. The Council had previously given City employees the authority to develop a $250,000-grant program. However, Mayor Lisa Gillmor suggested increasing the amount of money available.
Consequently, Council Member Debi Davis moved to increase the amount to $500,000 after City Manager Deanna Santana said the City could use $100,000 that would normally be used to fund public gathering — something it cannot do with the shelter in place order in effect — and transfer the remaining balance from the $80 million budget stabilization reserve.
The grant program will open next week. It will allow businesses to get $5,000 if they are an essential business and $10,000 if they are a non-essential business, as designated by the Santa Clara County Public Health Department earlier this month.
“The rationale here for breaking things out this that way, was that those businesses that were essential businesses have had an opportunity to gain some income during this period of time,” said Ruth Shikada, Assistant City Manager. “Whereas those businesses and nonprofits that were non-essential really had no opportunity to get any revenue so that they would suffer greater losses.”
Grants will be available on a first-come, first-served basis. To be eligible, the business or nonprofit must meet several criteria:
- Have more than one but fewer than 25 employees
- Have a business license
- Be in good standing with the City (no litigation, outstanding debt, etc.)
- Have been in operation for one year as of March 1, 2020
- Have storefront
- Demonstrate loss of business due to COVID-19
Shikada said there are 4,573 eligible businesses in Santa Clara. While City employees looked at other cities that offered loans, Shikada said she wanted to follow the Council’s direction to reduce “red tape” so businesses could get money faster. Since loans would require a third party to process, she said grants were a more viable option.
The entire Council supported increasing the grant pool.
Davis said having other grant programs already in place allowed the City to “hit the ground running” and not “reinvent the wheel.”
“They are the mom-and-pops of our City and we really need to help them out,” she said.
In addition to a blanket $30 rebate for residential customers, Shikada also highlighted utility flexibility for businesses, which is unrelated to the grant program. More information about both programs can be found at SantaClaraCA.gov/CoronavirusUpdates.
New TOT District Gets A ‘Pause’
Coronavirus also played into the Council’s decision to change or stay the course on the tourism improvement district (TID).
The Council had previously decided to shift the way it assesses the TID, shifting it from a $1 per room per night to 1.5 percent of gross sales for the hotels near Levi’s Stadium. However, the Council pulled the item from the consent calendar and continued the item at its March 24 meeting because of the COVID-19 pandemic.
Two hotel managers urged the Council to proceed with the formation of the district and grant the 1.5 percent of gross sales.
Eron Hodges, General Manager Hyatt Hotels, said the $1 per-room-night model will not allow the Destination Marketing Organization to sustain itself over time. Despite a $1.5 million reserve, he called the outlook over the next three months “bleak,” adding that the $1-per-room puts the City at greater financial risk.
“We are going to hurt our entire economy if we don’t properly fund our marketing and sales for our Convention and Visitors Bureau,” said Joe Eustice, General Manager Hilton Santa Clara.
Efforts to market the City were just starting to ramp up, with the Destination Marketing Organization (DMO) preparing to hire a CEO and several sales people. The Convention Center has been converted to an emergency coronavirus medical station.
Council Member Teresa O’Neill pulled the item from the consent calendar previously because she was concerned the DMO had authority to increase that number from 1.5 percent to 2 percent, circumventing the Council.
The 1.5 percent assessment was projected to generate $2.8 million as opposed to the $800,000 expected to be generated by the $1 per room model. Santana brought up continuing the item to Wednesday.
O’Neill said she didn’t want to do anything that could damage the City’s ability to increase the transient occupancy tax (TOT), which is planned to put on the November ballot.
“We are in very unknown waters here and I am resilient to make a dramatic shift,” she said.
Gillmor said the Council needs to temporarily reset the City’s priorities. Shifting to the 1.5 percent of gross revenue, she said, would “definitely preclude” the City being able to garner support for a November ballot initiative, which would benefit the whole City.
Davis disagreed with the mayor, saying it puts the City “behind the 8-ball.”
The motion to establish the 1.5 percent district failed with a 3-3 vote, with Gillmor, O’Neill and Watanabe voting “no.” A motion to continue with previously established flat rate and “revisit at a later date” passed 4-2 with Council Member Raj Chahal and Davis voting “no.”
City Enters Into Agreement With Related Santa Clara
The Council also approved an agreement with Related Santa Clara that sets parameters for post-shut-down operations of the landfill and insurance during different phases of construction.
The agreement, part of the 240-acre mixed-use Related Santa Clara project, stipulates that the developer, Related, will design and construct the landfill gas extraction and leachate control systems and manage the landfill gas mitigation system.
Meanwhile, the City will own and operate the landfill systems during construction and maintain control of the upgraded systems.
The Council meets again Tuesday, April 28 in the Council Chambers at City Hall, 1500 Warburton Ave. in Santa Clara.