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Downtown Racine business denied COVID grant after rally attendance, mayor confirms

Downtown Racine business denied COVID grant after rally attendance, mayor confirms

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RACINE — A longtime Downtown Racine business was denied municipal COVID relief, and Mayor Cory Mason has confirmed participation in a Madison Safer at Home protest led to the denial of the grant.

Dimple Navratil, co-owner of Dimple’s Fine Imports LLC, 416 Main St., who has owned the business in Downtown Racine for 21 years, applied twice for grants to receive city assistance through its Small Business Emergency Assistance Fund. When she didn’t receive the first grant she wasn’t that concerned. Not many businesses received grants. But when they denied a second time, she and her husband and co-owner, Denis Navratil, had questions.

At first, the Navratils said they were told that there were not enough funds. Upon further questioning, Dimple said Racine Mayor Cory Mason cited their “compliance” as the reason they did not receive the grant, specifically Denis attending a rally in Madison on April 24 in opposition to the state’s Safer at Home order where he was interviewed by two television stations, including WTMJ.

“There’s a way to reopen the state in a way that both protects us from the COVID-19 and helps small businesses stay afloat,” Denis said in the interview.

In a statement emailed to The Journal Times on Friday, Mason wrote: “Participating in mass gatherings outside of our community, such as the rally that was held at the State Capitol — such large gatherings have been linked to cases of COVID-19 around the state — and then returning to our City, only served to put our residents at unnecessary risk and, thus, factored into the funding consideration.”

The Navratils said they are surprised that Mason admitted the rally attendance was a factor in the funding consideration and they are exploring whether the denial of funding was legal and if their rights were infringed upon.

Upon being informed of Mason’s response, the Wisconsin Institute for Law and Liberty stated in an email: “We are greatly concerned that Racine officials are using government programs to discriminate and punish First Amendment protected speech. We will continue to investigate this matter.”

WILL is a a nonprofit public interest law firm which states on its website that it seeks “to advance the public interest in the rule of law, individual liberty, constitutional government, and a robust civil society.” The Navratils said they are in contact with the nonprofit.

“I think I’m being denied my First Amendment rights here by the mayor; I think that’s terrible,” Denis said.

The Journal Times learned, through an open records request, that a scoring system was not used to determine grant recipients, and that no minutes were taken during the decision-making process because it was done during internal staff meetings.

The grant

The City of Racine this spring gave out $900,000 in grants to small businesses affected by coronavirus. In round one, 18 local businesses received grants up to $15,000 each and in round two 146 businesses received grants ranging from $2,500 to $6,500.

“We wanted to know why we were denied and they told us there was not enough funding, but I need a better answer than that because I didn’t understand,” Dimple said. “If I met all the criteria, if I did everything right, why was there not enough money for us?”

“I asked him ‘What compliance?’” Dimple said about her conversation with the mayor. “I thought he was talking about my store. And I said I was closed until Gov. Evers said it was OK to open. Then he said, ‘No it’s about being in the rally.’ Then I realized that he was talking about my husband going to the Madison protest that was on the 24th of April.”

That state order was later struck down by the Wisconsin Supreme Court on May 13, although just two days before the governor allowed small retailers to open with limitations. Locally there has been a back and forth with the Circuit Court and the city over local restrictions, with the court most recently prohibiting the city from issuing any restriction orders.

Mason responds

After learning about the conversation, The Journal Times contacted the mayor’s office to ask if Dimple’s did not receive funding due to Dennis attending the April 24 protest. The mayor’s office responded Friday with a statement from Mason.

His statement said, “As Mayor, it is my duty to protect the public health of our City’s residents. While I certainly support the rights of free speech and assembly, I cannot in good conscious [sic] send scarce City resources to a person or business that willingly jeopardized public health, especially when they were competing with other businesses who were not flagrantly violating safety measures.”

“If an applicant was openly violating the statewide Safer at Home order and the public health emergency under which the City was operating to help mitigate the spread of coronavirus, that applicant would compete less favorably. When it comes to disbursing discretionary funds aimed at helping businesses who were sacrificing to protect public health, the City is not going to reward business owners who took reckless behaviors that risked the health of our community.”

When asked if he is as concerned about the spread of COVID at recent Black Lives Matter rallies as past Safer at Home rallies, Mason said: “I have always been clear and consistent that no protest is safe from coronavirus and continue to be worry about the spread of coronavirus from them. That is why I helped organize the solidarity from your front yard event with church bells early on, and the reason I have not participated in any of the protests. If not for a pandemic, I absolutely would march in the peaceful protests because black lives do matter.”

And when asked if attendance at recent Black Lives Matter rallies would be a factor in future grants or business financing, Mason said: “If you don’t pay your taxes, or violate city ordinances, or disregard public health orders in a pandemic — whether that is under a conservative or liberal cause — you will not compete as well against other applicants who do. It’s about stopping a pandemic and protecting public health, not an ideological litmus test.”

Open records

On May 27, after the announcement of the grant recipients, The Journal Times submitted an open records request asking for:

  • The names of those who decided which loan/grant applications to approve and which to deny
  • Minutes from any meetings held reviewing and/or deciding which loans/grants to approve or deny
  • Dollar amounts for loans/grants provided
  • Any rubric, criteria or system for determining which loans/grants would be approved and which would be denied
  • How many businesses applied for each round, the names of those businesses and the dollar amounts they requested.

After multiple emails Friday, The Journal Times received responses for all the records, except for the dollar amounts that each business had initially requested. April Rockstead Barker of Schott, Bublitz & Elgel Attorneys at Law provided assistance to The Journal Times.

Criteria and process

Shannon Powell, the mayor’s communication director, said in an email that city Development Department staff did the initial screening of the grant applications to ensure only eligible applicants were considered for the grants.

Eligible grants were passed onto Mason; city Chief Innovation Officer William Martin; Powell; outgoing City Administrator Jim Palenick, and Matthew Rejc, manager of Neighborhood Services in the City Development Department.

“Because this group was comprised of staff, and its meetings were held as internal staff meetings, no official minutes were taken,” Powell said in an email to the Journal Times.

Powell also stated: “There was not a cut score or a scoring system used to determine awards.”

Instead, the funding selection group used the official criteria listed with the application along with other criteria “such as the number of employees at the time of application, DBE status, location within the City, the owner’s City residency status, the amount of funds received/applied for from other financing programs (PPP, EIDL, etc.), other financial information that was supplied, compliance with City ordinances, zoning requirements and other laws, as the narrative from the applicant provided in the application,” according to Powell.

On the city application, the Navratils stated they had received $21,870 in Paycheck Protection Program funding from the federal government. But that was not cited as a reason that they didn’t get the city grant. The Navratils had five employees before coronavirus hit, but they had to go down to three for a while, themselves and one other person. They are up to four employees after receiving the federal funding; the fifth employee choose not to return at this time due to COVID-19 concerns.

Dimple arrived in the U.S. 28 years ago from India with a single suitcase. She is active in the community through her involvement on the Ascension All Saints Foundation and Racine Zoological Society Board of Directors.

After COVID-19 hit and Gov. Tony Evers issued the Safer at Home order, Dimple’s lost almost all of its sales as the Navratils closed the store’s doors. For the foreseeable future, they said, they will continue to lose the profits that they had earned from hospital fundraising events.

“We go into these hospitals and we set up our jewelry in a lobby or conference room,” Denis said. “It’s for-profit for us, but we give them 20% of the sales. As you can imagine with COVID, those are closed, and they’re not just closed for the duration our store was closed, but it is quite possible, even likely, they will be closed for the entire year.”

The Navratils said they thought their business more than met the criteria to receive a grant from round two of the City of Racine’s Small Business Emergency Assistance Fund. Dimple’s is a minority, woman-owned, long-standing small business in Racine that has been voted Best Place to Find Unique Gifts in past Journal Times Best of Racine reader surveys and is continuing to lose revenue because of COVID-19.

As part of the grant application they wrote: “Our customers often tell us they are proud to have a business like ours in Racine and they hope we will stay. We have always told them that we aren’t going anywhere. I never anticipated anything that could damage our business as the COVID-19 virus has. We are hopeful that we can survive this challenge and keep our business in Downtown Racine.”