Salem City Council approves grant program to help small businesses hurt by COVID-19 pandemic

Whitney Woodworth
Salem Statesman Journal

Nearly $400,000 in funding will soon be available for small businesses in Salem impacted by the COVID-19 pandemic after Salem City Council passed a motion Tuesday allowing the creation of a grant program.

City officials said the program is expected to provide funding for about 100 local businesses to help with reopening, staffing, inventory, protective equipment, rent and utilities. 

Up to $3,000 will be available for businesses with five or fewer employees, and up to $5,000 will be available for businesses with six to 40 employees.

Motions to create the grant program and an agreement allowing for its administration passed unanimously by the city council. 

"I think this is wonderful," councilor Tom Andersen said during the meeting. "I urge everyone in the small business community in the affected areas to apply for a grant. Hopefully, we can get everybody something."

Gov. Kate Brown's executive order issued on March 23 requiring many businesses to close or change their operations to slow the spread of COVID-19 left many small businesses in crisis. 

City officials estimated that a minimum of 2,300 Salem businesses have been impacted by the order.

Despite the Phase 1 reopening approved in Marion and Polk counties last week, a significant number of businesses have remained closed or are seeing reduced customer traffic. 

Both those able and unable to open have expressed frustration over their inability to access grants and loans made available through the Coronavirus Aid, Relief, and Economic Security Act passed by Congress. 

"Many businesses have not been able to access financial assistance through the CARES Act or other sources due to the high demand for assistance," said city officials in a summary to the council. "Marion County received more than 800 applications for its business grant program, many within the first hour of accepting applications." 

The Marion County Commissioners on April 1 approved using $200,000 in lottery funds earmarked for economic development for grants of up to $5,000 for businesses with five or fewer employees to be administered through Willamette Workforce Partnership.

“It was like the first two minutes of being open, all the money was spoken for,” Marion County Commissioner Sam Brentano said.

So many businesses applied that the county continued to fund to dedicate more money to fund all businesses that applied for their grants.

“I believe we wrote grants for about $800,000,” Brentano said. "It’s a drop in the bucket. There’s so much more need.”

How the grant program will work

The city's COVID Small Business Grant Program will be available to eligible businesses in two phases.

City officials will partner with Willamette Workforce Partnership, a local nonprofit, to administer the grant program.

Priority will be given to businesses that have not accessed other COVID-19 financial assistance programs and need assistance preparing to reopen. 

The first phase will make $188,000 in funds available for small businesses with six to 40 employees. The money comes from the general fund, enterprise zone fines and a Marion County grant

"Phase One" of the city's grant program is expected to launch in June. 

"Phase Two" will consist of $200,000 from the community development block grant and will be available to micro-enterprise businesses with fewer than six employees.

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City officials said significant outreach will be completed prior to making grants available to ensure Salem’s diverse small business owners are aware of the program.

Draft guidelines submitted to city council said officials will rely on partnerships with cultural organizations and neighborhood and business groups to share information broadly, including with Latino, Russian and Pacific Islander business owners, and at least one virtual information session on the grant program will be held for interested.

And unlike previous programs, which were "first come, first serve" — and allegedly filled up within minutes — applications will be submitted during a two- to three-day time period. After that time period, applications will then be selected via a lottery system. 

Andersen said a lottery system would be the "most fair way" to distribute the grants. 

City officials said the Willamette Workforce Partnership has experience administering grants to businesses utilizing federal, state and regional funding sources.

"They have a grant application template and staff and processes in place to administer the City’s grant program in both Spanish and English," officials said. 

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According to the draft guidelines, to qualify, small businesses must be within the Salem city limits and engage and interact with the public.

Funding is for businesses that have been under a mandatory change in service or closure order and experiencing revenue loss as a result of the closure.

Businesses need to have been in operation since January 2019 and be registered with the state.

Nonprofits are not eligible, and only locally owned franchise operations are eligible.

According to the guidelines, business owners must demonstrate that they have experienced a loss in revenue as a result of COVID-19 social distancing or stay-at-home requirements.

Eligible expenses will include payroll, inventory, rent, utilities and related expenses, including related to changing business strategy or operations to meet the governor’s emergency order, and protecting workers and customers from COVID-19 exposure.

Restaurants are shut or only offering to-go services in downtown Salem on March 17, 2020.

An online application is expected to be used, along with provisions for businesses that do not have internet or computer access. 

Officials said the application and other materials are not yet finalized but are expected to be available in one to two weeks

In the wake of the COVID-19 pandemic, the city allowed commercial customers to request temporary suspension of service due to the emergency order.

City leaders also suspended water service shut-off due to nonpayment through June 30.

A list of varied community resources available to help people listed on the City of Salem website at cityofsalem.net/pages/covid19.aspx. 

Reporter Bill Poehler contributed to this story

For questions, comments and news tips, email reporter Whitney Woodworth at wmwoodworth@statesmanjournal.com, call 503-910-6616 or follow on Twitter @wmwoodworth