On Tuesday evening, the Santa Monica City Council discussed the potential investment in a Small Business Improvement and Tenant Investment Fund to aid businesses owned by women and people of color that have been disadvantaged in the past, and certainly in economic recovery since the peak of the global COVID-19 pandemic. The specific motion put forward by Councilmember Caroline Torosis and Mayor Pro Tem Lana Negrete asks the city manager to return to the council with recommendations on how to make such a Fund possible.
“We know that the pandemic has been hard on our small business community in Santa Monica. We also know that it’s been increasingly hard for our small businesses to stay, grow, and thrive in this city,” said Torosis. She added, “We know COVID-19 disproportionately impacted small, women-owned businesses, businesses of color, and there’s a lot of systemic barriers these businesses face, such as access to capital.”
Torosis went on to explain that businesses that have invested in new spaces or renovate their facades or signage, have shown to attract new customers. This also leads to greater consumer spending and greater foot traffic, benefitting neighboring businesses and ultimately resulting in economic recovery.
In addition to less access to capital, a write-up on the proposed Fund states women-owned and other diverse enterprises also face other systemic barriers including “displacement, discrimination, and inequitable public policy.” Torosis and Negrete think these businesses in particular should receive funding for investments such as new space and improved facades that have proven to work. They explained they hope the Fund will include revolving loans, grants, and technical assistance.
The write-up further adds, “The establishment of a Small Business Assistance and Tenant Improvement Fund will immediately serve to fill empty storefronts within our city by providing gap financing for commercial space improvements, the Fund will support wealth generation for business owners, and potentially give lower capacity businesses access to construction management services to assist with project needs such as space planning, selecting a general contractor, and managing the buildout process.”
Where would the money come from? There are a number of potential sources the councilmembers asked the City Manager to report back on, including city council discretionary funds and community development block grant funding, which has successfully been used by several other jurisdictions historically for this type of economic effort. They also requested that the city manager report back with a plan to capitalize the Fund and no less than $100,000 and the possibility of identifying additional revenue sources.
Negrete added her support by saying, “As somebody who opened a second location in Culver City, we were the recipient of a community capital grant in order to update the façade of our business, and it was literally the only reason we were able to open there.” Negrete sees a Fund like this as increasing in importance as the country gets further away from things like PPP loans.
Mayor Gleam Davis suggested the motion include an amendment allowing funds to also be used for potential relocation for local businesses within Santa Monica, as she says the Housing Element’s proposed upzoning for residential properties in commercial zones will ultimately create construction noise for local businesses in those districts. Her amendment was accepted as friendly.
The motion to support the establishment of the Fund and request of the city manager to report back on its development passed 7-0.
Photo by Apostolos Giontzis