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HomeMy WebLinkAboutItem 6 City of Lakeville Community & Economic Development Memorandum To: Mayor and City Council Economic Development Commission From: David L. Olson, Community and Economic Development Director Copy: Justin Miller, City Administrator Kati Bachmayer, Economic Development Coordinator Date: June 23, 2020 Subject: Proposed Small Business Emergency Grant Program It is anticipated that the City of Lakeville will soon be receiving an allocation of federal CARES Act funding when a state-wide allocation plan is approved by the MN State Legislature and is signed by Governor Walz. One of the allowed uses of these funds is to provide assistance to businesses that have been negatively impacted by the COVID-19 Pandemic. Community and Economic Development Department staff have been requested to draft guidelines for a Small Business Emergency Grant Program in anticipation of the City receiving an allocation. Numerous cities and counties in the Twin Cities and Greater MN have developed local small business emergency grant or forgivable loan programs for businesses impacted by COVID-19. Attached is our draft guidelines for a Small Business Emergency Grant program for the City of Lakeville. The criteria for the program are as follows: Terms • Up to $10,000 grant based on economic injury from COVID-19 related eligible expenses. • Funds can be used for operating expenses, including rent payments, mortgage payments, utilities, payments to suppliers, or other critical non-payroll business expenses (including expenses related to reopening and personal protective equipment) as approved by the fund administrator. Eligible Businesses Businesses must meet all of the following criteria as of March 1, 2020 to be eligible: • Must be a locally owned and operated for-profit business with a physical establishment in the City of Lakeville • Must have at least one employee in addition to the owner as of March 1, 2020 and not more than 25 employees, and under $1 million in annual revenue • Must have been operating for at least 12 months prior to March 1, 2020 • Must be licensed, in good standing, current on property taxes prior to May 15, 2020, if applicable • Must demonstrate a significant loss in revenue since March 15 (no credit score or collateral requirements apply) Businesses that have received funding from the federal SBA loan programs (Paycheck Protection Program and Emergency Injury Disaster Loan Program) are eligible to apply for the City of Lakeville’s grant program, however the City’s funds must be used for other eligible expenses than those covered by federal funds. It is expected that the State of Minnesota and Dakota County will also be implementing similar programs funded with CARES Act funds to offer similar grants to small businesses. The proposed guidelines for the City’s program would not allow for businesses to request grants from different agencies using the same funding source. The City and other agencies that are administering CARES Act funds for emergency grants to small businesses and other eligible activities are required to expend the funds by December 31, 2020. Action Requested: Provide staff with any questions or recommendations regarding the proposed Small Business Emergency Grant Program guidelines. This item is scheduled for consideration by the City Council on July 6th. 20195 Holyoke Avenue, Lakeville, MN 55044 952-985-4400 • 952-985-4499 fax www.lakevillemn.gov City of Lakeville Small Business Emergency Grant Program Guidelines June 2020 To provide emergency assistance to small local businesses in Lakeville adversely impacted by the COVID-19 pandemic, the City of Lakeville Small Business Emergency Grant Program will provide grants of up to $10,000 to small businesses most in need of support. Funds will help businesses pay for critical expenses such as rent payments, mortgage payments, utilities, payments to suppliers, and costs associated with reopening (including Personal Protective Equipment). Providing this support will increase the capacity of small businesses with a physical location in Lakeville to survive the current crisis and will help prevent potential future blight scenarios. These grant funds can be used to ensure your business can afford to operate while maintaining the social distancing guidelines for the safety of your employees and customers. The Grant Program will be administered by the City of Lakeville Community and Economic Development Department. Terms • Up to $10,000 grant based on economic injury from COVID-19 related eligible expenses. • Funds can be used for operating expenses, including rent payments, mortgage payments, utilities, payments to suppliers, or other critical non-payroll business expenses (including expenses related to reopening and personal protective equipment) as approved by the fund administrator. Eligible Businesses Businesses must meet all of the following criteria as of March 1, 2020 to be eligible: • Must be a locally owned and operated for-profit business with a physical establishment in the City of Lakeville • Must have at least one employee in addition to the owner as of March 1, 2020 and not more than 25 employees, and under $1 million in annual revenue • Must have been operating for at least 12 months prior to March 1, 2020 • Must be licensed, in good standing, current on property taxes prior to May 15, 2020, if applicable • Must demonstrate a significant loss in revenue since March 15 (no credit score or collateral requirements apply) Certain businesses are ineligible, including: 20195 Holyoke Avenue, Lakeville, MN 55044 952-985-4400 • 952-985-4499 fax www.lakevillemn.gov • Home-based businesses; those without a physical establishment, (except in-home childcare providers will be eligible) • Non-profit organizations • Corporate chains, multi-state chains • Individuals who have or are currently receiving assistance through the Pandemic Unemployment Assistance (PUA) program • Businesses in default conditions prior to February 29, 2020 • Businesses that primarily derive income from gambling • Businesses that derive any income from adult entertainment • Businesses that primarily sell pawned merchandise, guns, tobacco or vaping products • Businesses that derive income from passive investments; business-to-business transactions; real estate transactions; property rentals or property management; billboards; or lobbying In addition to the City of Lakeville Small Business Emergency Grant Program, businesses are strongly encouraged to apply for all available COVID-related funding. However, due to the limited amount of funding and in order to serve as many businesses as possible, businesses will be ineligible to receive duplicative funds from the City of Lakeville Small Business Emergency Grant Program AND State of Minnesota or Dakota County CDA Small Business Emergency Loan funds. Businesses receiving federal relief funds are still eligible for the City of Lakeville Small Business Emergency Grant Program but must use City funds for other eligible expenses than those covered by federal funds. Application Process • Application Forms will be accepted beginning July 7, 2020 through July 19, 2020. • Completed application forms can be completed on lakevillemn.gov or emailed to kbachmayer@lakevillemn.gov. • If applications exceed the funding available, City of Lakeville Community & Economic Development staff will select grant recipients using a first come – first serve basis. The City will notify approved applicants by email on or before July 24, 2020. • Upon notice of an approved application, applicants will be required to submit the following within 10 business days: o 2019 Federal Business Tax Return or appropriate Business Tax Schedule based on entity type. o Evidence of revenue loss related to the COVID 19 pandemic. Applicants should submit documentation that best demonstrates the impact and is deemed acceptable to the Community & Economic Development Department. Some examples of acceptable documentation include Sales Tax Reporting, Period 20195 Holyoke Avenue, Lakeville, MN 55044 952-985-4400 • 952-985-4499 fax www.lakevillemn.gov Statements from 3rd-party Sales Platforms, Merchant Services Statements, and Point of Sale or Register reports. o Evidence of employment prior to March 1, 2020. Acceptable documentation may include period reporting from a 3rd-party payroll processor, applicant’s Federal Form 941/Employer’s Quarterly Federal Tax Return, or other State or Federal payroll-related filing. o Any additional documentation or information deemed necessary by the Community & Economic Development Department to determine eligibility, generate loan documents, disburse loan proceeds, or meet program reporting requirements. o Failure to submit required documentation will result in forfeiture of a grant award. Any forfeited grant money will be awarded to the next business application in queue. Note: The Lakeville City Council reserves the right to revise these guidelines as needed to best address the impact of the current pandemic.