CARLSBAD — The city is moving forward with its economic stimulus package to support small businesses impacted by the COVID-19 pandemic.
On May 5, staff will return with more details of the program, which includes a $5 million fund for small businesses. The City Council, though, is leaning toward allowing businesses with 15 or fewer employees to be eligible, although there was some discussion of increasing the number during the council’s April 21 meeting.
Christine Davis, executive director of the Carlsbad Village Association, said in a letter emailed to the City Council that those businesses with 15 or fewer are the lifeblood of the Village. She added that many of them do not qualify for the federal Paycheck Protection Program because they are too small.
Additionally, many others who have applied for loans from the U.S. Small Business Administration program have not yet received funds, Davis said.
“We determined one of our main focuses would be on the small business community,” said Councilwoman Priya Bhat-Patel, who is on the economic revitalization subcommittee with Mayor Matt Hall. “We are looking at immediate relief, short-term relief and long-term recovery.”
The $5 million will come from the city’s economic uncertainty fund within the General Fund, according to David Graham, the city’s chief innovation officer. Deputy City Manager Laura Rocha added that the city is limited to monetary sources outside the General Fund.
“Outside the General Fund, our funds are very restricted,” she said. “We were not able to identify any other funds that we felt should be considered for this source of funding.”
The council, meanwhile, is also considering low-cost or no-cost loans for the program. Councilwoman Cori Schumacher said she is against anyone making money off a loan program, thus does not support interest-based loans.
The council discussed potential terms such as loans with 0% interest or less than 2%, along with possibly deferring first payments 12, 18 or 24 months. The maximum amount would range from $25,000 to $50,000.
The funds used in the loan program are in addition to $3 million the city has already allocated for costs it has endured due to the pandemic. There is more than $11 million remaining in reserves.
Also, the council approved rent relief for two lessees — New Village Arts and Chapters Café at Dove Library. The city will engage with other tenants who may need relief. Those rents total $55,000 per month.
As for NVA, rent for the nonprofit theater on State Street is $5,000, while the café is $1,230.75. Both will resume payments once they reopen, Graham said.
He said thousands working for small businesses in Carlsbad have lost their jobs, which represents a fraction of the total. The San Diego Association of Governments pegs Carlsbad’s unemployment rate between 20% and 22% percent.
“Food, beverage, hospitality, sports and innovation and manufacturing have been the hardest hit,” Graham noted.
As for business licenses, the council did not move forward with suspending any fees owed. Those account for between $4 million to $5 million per year and range from $34 to $300,000 for an individual business.