CCMIN04152020 - Laserfiche WebLink

Councilmember Brown voiced concerns that a large portion of expenses for a small business in Downtown is rent. She added the financial health of downtown businesses is an indicator of the financial health of the City. Deputy City Manager Ott explained rent rates are largely based on use rather than location and rent for retail is higher than rent for commercial space, which is higher than rent for industrial space. The average lease rate of about $2,500 per month helped determine the loan amount of $2,500. Deputy City Manager Ott acknowledged downtown has the highest rent. Councilmember Brown added restaurants and retailers are specifically mentioned as having higher rent rates and they have been hit the hardest. She doesn't believe $2,500 is going to help. Councilmember Testa requested clarification regarding the determination of TOT at $1.2M if hotels are not currently operating. In response to Councilmember Testa, Deputy City Manager Ott explained hotels were open during January and February and the TOT estimate was conservative. Hotels are currently operating at 10-15% occupancy. Councilmember Testa added she shares Councilmember Brown's concerns of higher rent associated with businesses located Downtown. She noted while business owners would be grateful for any amount of assistance, $2,500 would not make much of an impact and would not cover one month's rent. In response to Councilmember Testa, Deputy City Manager Ott explained businesses determine the number of employees based on the total part time and full-time employees reported at the time of their Business License renewal prior to the SIP order. Deputy City Manager Ott responded to Councilmember Testa noting the Alameda County Small Business Development has one-on-one advisors to explain programs and available resources, and SCORE also offers assistance. The City's Economic Development Department is partnering with Hacienda Business Park and the Chamber of Commerce to potentially identify businesses that need additional help and provide guidance and webinars. In response to Councilmember Testa's question regarding a larger loan amount for downtown businesses, City Manager Fialho explained in order to accommodate that there would either have to be an increase in the overall amount or further filters of the criteria to lower the amount of businesses that we can assist. He added this is put forward as a beginning of a multi-month effort to support businesses. This is what can be afforded today; with further impacts and time we can bring another program to target a specific business category, like the downtown area. He also offered for the benefit of the Council and public, the City has cut $6M from this year's budget and is working on next year's budget. Projections for a worst-case scenario would cut $6-$10M from both the Capital and Operating budget. This was kept in mind and the Business Assistance Program is presented as a strategic start and will continue to add support in the coming months. Councilmember Testa added the expected recovery of that tax base would not happen if those businesses close. Councilmember Pentin motioned to approve a Business Assistance Program, related to the COVID-19 emergency, to support the retention of local businesses, including the development and allocation of a small business support fund with loans in the set amount of $2,500. He commented this is supplementation to help during this time in combination with other resources from state and federal sources. However, any one business is not more important than another City Council Minutes Page 7 of 11 April 15,2020