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Home My WebLink About18A Emrgncy Business Relief - Augment FundingSTAFF REPORT CITY OF PALM DESERT ECONOMIC DEVELOPMENT DEPARTMENT MEETING DATE: January 14, 2021 PREPARED BY: Martin Alvarez, Director of Economic Development REQUEST: Consideration to augment the Unite Palm Desert Emergency Business Relief Program with $1M in funding from the Economic Development Reserve Fund to assist restaurants adversely impacted by the COVID-19 public health emergency. Recommendation 1. Authorize the $1 M in funding from the Economic Development Reserve Fund to augment the Unite Palm Desert Emergency Business Relief Program (EBRP) to assist restaurants adversely impacted by the COVID-19 public health emergency. 2. Authorize the Interim City Manager to finalize program guidelines and agreement/promissory note associated with the program. 3. Authorize the City Manager to execute any and all documents associated with the above program, and allow the City Attorney to make non - substantive changes. 4. Appropriate $1 M from the Economic Development Reserve Fund to the Economic Development Fund to support the Economic Business Relief Program. Strategic Plan Objective The approval of the proposed use of funds aligns with the City's Envision Palm Desert Strategic Plan and Economic Development Strategic Plan in the following areas: • Envision Palm Desert Strategic Plan, Economic Development Priority 1: Expand job and business creation opportunities. • Economic Development Strategic Plan (2018), High Priority (HPI) 2: Business Retention and Expansion Program, (HPI) 3: Revitalization of Key Commercial Districts Executive Summary In May of 2020, the City Council approved the re -allocation of the funds associated with the Invest Palm Desert Economic Development Incentive Program to the Unite Palm Desert Economic Relief Program. This approval allocated $2M in five (5) Focus Areas to assist the January 14, 2021 — Staff Report Unite Palm Desert Economic Business Relief - Restaurants Page 2 of 4 Palm Desert community and its businesses during the COVID-19 health crisis. If approved, this item would authorize the use of $1M from the City's Economic Development Reserve Fund to support the Unite Palm Desert Emergency Business Relief Program, specifically assisting local restaurants. This proposed program would assist restaurants that are in compliance with the current State Regional Stay at Home Order with up to a $10,000 forgivable loan and will provide funding for restaurants to provide free meals to seniors and City of Palm Desert's affordable housing residents. Economic Development Subcommittee Recommendation Staff worked with the City Council Economic Development Subcommittee (EDC) to formulate and review the Economic Restaurant Relief Program guidelines on January 8, 2021. Both staff and the EDC recommend approval of the program formation and guidelines as identified in the staff report below. Background On December 7, 2020, the California Governor re -issued a Regional Stay at Home Order to address the spread of the Coronavirus known as COVID-19. COVID-19 has created significant challenges for all of the City's residents and businesses. The Unite Palm Desert Economic Relief Program approved by the City Council earlier this year set aside $2M to assist the City's residents and businesses affected by the current economic challenges caused by the COVID-19 pandemic. Under this program, significant relief has been provided to residents, local businesses, and community partners. The Unite Palm Desert Economic Relief Program allocated the following funds: $1 M — $5,000-$25,000 Forgivable Small Business Loans (July 2020) $400,000 — Hospitality Incentive Program (Buy 2, Get 1 Free Night Stay) $100,000 — Community Partners (Priority One CV, Chamber of Commerce, Outdoor Dining) $500,000 ($500K re -allocated from HIP) — $5,000 Forgivable Small Business Loans (December 22, 2020) On December 22, 2020, the City Council authorized the re -allocation of $500,000 from the Unite Palm Desert Hospitality Incentive Program (HIP) to the Unite Palm Desert Emergency Business Relief Program to issue $5,000 forgivable loans to businesses adversely impacted by the December 7, 2020 State of California's Regional Stay at Home Order. The loan program application period was opened on December 24, 2020, and closed January 8, 2021. To date, staff has received over 130 applications, with only 100 businesses being able to be funded at $5,000 each. Fifty-six of the applications received have been from restaurants that have been adversely impacted by only being able to offer takeout service. Discussion On December 21, 2020, the Regional Stay at Home Order was extended. These health orders continue to significantly add economic stress to the City's business community. Under the recently extended order, the following businesses have been ordered to close or modify their operations: G:\CityClrk\AgendaBin\CC\01-14-2021\18 Econ Dev\01 EBR-Rest-1-SR 1-14-2021.docx January 14, 2021 — Staff Report Unite Palm Desert Economic Business Relief - Restaurants Page 3 of 4 • Restaurants open for takeout only (no indoor/outdoor dining) • Animal grooming facilities • Body piercing shops • Car washes • Massage therapy • Museums • Personal care services (hair/nail salons, electrologists, estheticians, skin care) • Tattoo businesses • Bars Our local restaurants continue to be adversely impacted by Regional Stay at Home Order. Restaurants have specifically been impacted as their operations have been limited to providing takeout service only. This current health order has been extended during our peak economic period of the year. A period of the year where the City sees an extraordinary increase in visitors and economic spending. In addition, the health order comes during a period when the Coachella Valley experiences its best weather that would normally allow restaurants to offer at minimum outdoor dining. To assist our local restaurants, staff is recommending that the City Council authorize the use of $1 M from the City's Economic Reserve Fund to augment the Unite Palm Desert Emergency Business Relief Program and specifically assist restaurants with forgivable loans and an opportunity to prepare and deliver meals to residents in need. The Unite Palm Desert Emergency Restaurant Relief Program guidelines have been drafted for your consideration. Below is a summary of the program guidelines: • Unite Palm Desert Emergency Restaurant Relief Program Fund Allocation - $1 M • Eligibility: o Palm Desert restaurants affected by December 7, 2020, State -mandated Regional Stay at Home Order o $800K Allocation for Loans ■ $5,000 Forgivable Loan, plus additional $1,000/FTE (pre -pandemic) with a maximum $10K o $200K Allocation for Restaurant Meals to Qualifying Residents ■ City Affordable Housing Residents ■ Qualifying Senior Residents o Max $5,000 Meal Allocation per Restaurant ■ $22/Meal + $5 Delivery ($200K/$27= 7,400 Meals) ■ Meal Health Quality to Meet Great Plates Program o Must comply with the State Regional Stay at Home Order issued December 7, 2020, extended December 21, 2020 and as may be amended or extended o Must stay open for takeout service (or operate as allowed by current/future COVID-19 Regional Health Orders) o Must remain in operation through May 31, 2021, to receive loan forgiveness o Must be in compliance with all State, County and City Laws and Ordinances o Application Period to Be Re -opened Jan.15 — Jan. 29 G:\CityClrk\AgendaBin\CC\01-14-2021\18 Econ Dev\01 EBR-Rest-1-SR 1-14-2021.docx January 14, 2021 — Staff Report Unite Palm Desert Economic Business Relief - Restaurants Page 4 of 4 The forgivable loan will be memorialized with a promissory note, similar to the previous business relief loans issued by the City in July 2020. The promissory note/loan agreement is currently being finalized by our legal team and staff request authorization be granted to the City Manager to finalize. If approved, the Emergency Restaurant Relief Program is expected to assist approximately 80 restaurants that have been adversely impacted by the State Regional Stay at Home Order due to the COVID-19 pandemic. The program will also provide approximately 7,400 meals to qualifying senior and affordable housing residents. City staff will coordinate with the participating restaurant to ensure the meals meet the Great Plates nutrition criteria. It is envisioned that participating restaurants will coordinate with City staff to market the program to qualifying residents. Staff recommends approval. Fiscal Analysis Funds in the amount of $1 M to support the Unite Palm Desert Emergency Business Relief Program are available in the Economic Development Reserve Fund. Staff recommends utilizing these funds to assist Palm Desert restaurants and residents currently impacted by the Regional Stay at Home Order. LEGAL REVIEW DEPT. REVIEW RH Robert W. Hargreaves City Attorney M arti,vl. A Gv-a-re Martin Alvarez Director of Economic Development FINANCIAL REVIEW 2a4-1,et141. ASSISTANT CITY MANAGER Andy Firestine Janet M. Moore Andy Firestine Director of Finance Assistant City Manager Interim City Manager Randy Bynder: 744 47„,i, TY COUNCIL PROVED :CEIVED ON DENTED OTHER EET G D14- 'ES: ( )ES: (SENT: STAIN:1' - ;RIFLED BY: iginal oo"Yitfth CIO rrL 1!I miming At-kly *By Minute Motion, authorize the Economic Development Subcommittee to work with staff to finalize the free meal restaurant program guidelines and authorize coordinated free meals to our first responders. O .2$1\3- Randy - 01-14-2021\Econ Dev\01 EBR-Rest-1-SR 1-14-2021.docx