RACINE — In its first virtual meeting since the COVID-19 shut down, the Racine City Council on Monday approved a second round of emergency grants for small businesses during the pandemic.
The city estimates the $650,000 in new funds could finance 100 to 120 grants.
The Racine Small Business Emergency Fund, which was announced on March 23, has distributed $250,000 of forgivable loans to 18 small businesses in order to preserve 59 jobs. The funds were initially allocated for the city’s micro-loan program and were from the U.S. Department of Housing and Urban Development.
However, the city found during the process that the need was much greater. During the five-day application period, the city received 139 applications requesting $1.5 million. The second round of grants is intended to fulfill some of that need.
The City Council reviewed and approved the initial loan program and the list of recipients. Mayor Cory Mason stated that 60% of the businesses awarded loans are woman- or minority-owned.
Alderman Maurice Horton from the 7th District said that he noticed one industry that has been hit hard by COVID-19 was not on the list: hair salons and barbershops.
“I haven’t gotten a haircut in four weeks, so I can’t wait until they come back, too,” Horton said.
The second round of funds will be distributed as grants, not loans. The pool of $650,000 is to be distributed to businesses that are: in the City of Racine; that did not receive funding from the first round of loans; employ fewer than 15 full-time-equivalent employees; have had significant reductions due to COVID-19; and are eligible for grants ranging from $2,500 to $7,000 each.
Alderman Sandy Weidner of the 6th District, who did not seek re-election and on Monday decided to attend her last meeting as a sitting alderman at her desk in the Council Chambers, asked if the second round would prioritize companies that did not receive assistance from the Federal Government through the CARES (Coronavirus Aid, Relief and Economic Security) Act. City Administrator Jim Palenick said the intention with the city’s programs is to “fill the gap” for companies that have not received aid elsewhere.
While the initiative was approved Monday night, city staff are still working through the details of the grant program, which are expected to be released next week.
Finding the funds
The grant money is comprised of $150,000 from the city’s room tax account, which would otherwise be used to fund programs that promote tourism or the START grant program, which assists non-profits and not-for-profits that operate programs or events that could attract tourists.
Alderman Carrie Glenn of the 10th District questioned whether this was an appropriate use of room tax funds, arguing that once coronavirus restrictions are lifted, the city could use those funds for events to celebrate. Horton asked if funds for such events would still be available through other entities such as Real Racine, which Palenick confirmed is true.
Palenick argued that one of the draws for tourists is Racine unique attractions, such as restaurants and bars.
“Providing some of these dollars to support some of these small businesses, I would say that does in turn promote tourism,” said Palenick.
Alderman John Tate II of the 3rd District asked if that $150,000 could be earmarked for businesses that are tourism-oriented. Palenick said that would be the idea.
The other $500,000 for the grants is coming from sanitary sewer surcharge funds, which are set aside for large sewer infrastructure projects. Palenick said the city had budgeted a large amount of those funds to install lift stations for the @North Beach project at the former Walker Manufacturing site and for the Tannery at the Edge of the River project by the Sixth Street bridge. Palenick said that at least one of those projects is probably not going to move forward this year.
“These small businesses, year after year, have paid these sanitary sewer funds,” said Palenick. “What better way to use the funds than to keep the entities that pay them alive?”
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