At its first ever completely virtual meeting Tuesday, the Salt Lake City Council gave preliminary approval to a $1 million loan program meant to help local businesses that have been negatively affected by the coronavirus outbreak.
The tourism and hospitality industries have faced among the biggest losses so far, with restaurants and bars also expected to be hit hard following an announcement Monday that they would have to halt all sit-down service to curb the spread of the virus in Salt Lake County.
“There is a sense of urgency, as I hear businesses in my district [have gone from] selling $2,000 worth of products in a day or so to having sold $100 in the last four or five days,” said Salt Lake City Councilwoman Ana Valdemoros, who is herself a small business owner, in expressing support for the measure. “... Some of the businesses I’ve talked to are prepared maybe for the next week or so, but after that that’s when things get tighter and when these funds could really help them.”
The City Council is expected to formally approve the loan program at its meeting next week, after which point money could be distributed as early as March 25. But Tuesday’s straw poll vote gives the city’s Economic Development Department the ability to do “everything but cut checks,” as Council Chairman Chris Wharton put it — including advertising the availability of the funds and accepting and reviewing applications.
In announcing the emergency relief program on Monday, Salt Lake City Mayor Erin Mendenhall cited an ongoing survey the city’s Economic Development Department is conducting that found 76% of businesses have reported a decrease in revenue of more than 10% as a result of COVID-19, the disease caused by the novel coronavirus.
“Business drives our local economy and particularly small businesses are crucial to our vibrancy as a city,” Mendenhall said at a news conference Monday announcing the loan program and other efforts to help small businesses get through the coronavirus outbreak. “More than 90% of the 17,000 licensed businesses in Salt Lake City alone are small businesses. We want to make sure they have every opportunity to withstand any interruption in the coming weeks.”
In addition to the city’s flexible term, low-interest rate loan program — which is intended to help companies make payroll, pay bills and keep operations going — companies will also have access to federal assistance through the Small Business Administration in the coming weeks.
The Utah Governor’s Office of Economic Development announced Tuesday that businesses in all 29 of the state’s counties are now eligible to apply for those low-interest loans.
But Ben Kolendar, acting director for the city’s Department of Economic Development, said quick action is necessary to help local companies stay afloat until they can actually obtain that money.
“The gap we’re really trying to fill with the loan program is speed and flexible terms to get some of the smaller businesses through this,” he told the council.
The city’s loan program will be approved based on need, Kolendar explained, with a cap of $20,000 per organization. The funds are available to for-profit and nonprofit companies, meaning the city’s hard-hit arts organizations could apply, as well.
Each award will be reviewed by a committee to ensure the money is spent on critical needs and not on non-essentials like land procurement or construction improvements, for example.
Aside from the loan program, the City Council is also considering a proposal to set aside $2 million for employee-related issues as a result of the coronavirus, as well as to pay hourly workers sick leave, and $4 million for unforeseen needs as the city works to address the public health crisis.
Mendenhall said the administration is weighing several priorities for what to do with that funding, which is available as a result of some $13 million in extra funding because of an unexpected revenues last year.
“Although I don’t believe in fate, it’s hard to not imagine how wonderful a coincidence it is that we had a budget amendment coming through here with really an unprecedented amount of one-time revenue,” she told the council on Tuesday. “And man, there were some really cool things I wanted to propose to you that we spend the money on and then COVID-19 came along.”
The city’s pre-coronavirus budget amendment priorities were focused on environmental and process efficiencies, expansion of Foothill Trails, and other initiatives, a spokeswoman with the mayor’s office said Tuesday.
The coronavirus-related budget amendments are tentatively scheduled for council action on April 7.