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HomeMy WebLinkAboutEDA PACKET 08.18.20Agenda ECONOMIC DEVELOPMENT AUTHORITY Tuesday, August 18, 2020 REMOTE MEETING 5:30 PM Meeting to be held remotely pursuant Minn. Stat. Sec. 13D.021 Anyone wishing to attend the meeting can join virtually by using this link: https://us02web.zoom. us/j/85828866629 Or call +1 312 626 6799 Meeting ID: 858 2886 6629 5:30 pm 1. Call to Order CI I Y OF�— EST. 1906 5:31 pm 2. Roll Call (Denaway, Gallivan, Houle, Klein, Petty, Puleo, Weidt) 5:32 pm 3. Approval of Minutes EDA Meeting of June 16, 2020 5:33 pm 4. CARES Act Background 6:00 pm 5. Update on Downtown Redevelopment 6:30 pm 6. Adjournment If you need accommodations for the EDA meeting please contact Rachel Juba at (651) 762-6304 or riuba@ci.hugo.mn.us, thank you. Background memo for the EDA Meeting of Tuesday, June 16, 2020 3. Approval of Minutes Staff recommends approval of the minutes from the June 16, 2020 EDA Meeting as presented. 4. CARES Grant Background Staff will provide background on the CARES Act funding and the grant program that Washington County is providing to local businesses. The EDA is to have a discussion on a possible grant program for the City of Hugo. Also attached are additional resources that have been available to local businesses. 5. Update on Downtown Redevelopment Staff will provide an update on downtown redevelopment. If you need accommodations for the EDA meeting please contact Rachel Juba at (651) 762-6304 or riuba@ci.hugo.mn.us, thank you. MINUTES FOR THE EDA MEETING OF JUNE 16. 2020 Meeting held remotely pursuant Minn. Stat. Sec. 1313.021 Chair Weidt called the meeting to order at 5:32 pm. PRESENT: Denaway, Gallivan, Houle, Klein, Petty, Puleo, and Weidt. ABSENT: None. Note: Due to technological difficulties, Gallivan was able to view and hear the meeting, but was not able to participate. STAFF: Bryan Bear, City Administrator Rachel Juba, Community Development Director Emily Weber, Community Development Assistant APPROVAL OF MINUTES FOR THE EDA MEETING OF APRIL 21. 2020 Commissioner Klein made a motion, Commissioner Puleo seconded, to approve minutes for the EDA meeting of April 21, 2020. Ayes: Denaway, Houle, Klein, Petty, Puleo, and Weidt. No Vote: Gallivan. Motion Carried. BUSINESS RESOURCE UPDATE Staff provided an update on local businesses in Hugo. Salons and restaurants are starting to reopen and staff has been giving guidance on capacity and outdoor area recommendations. TGK Automotive and Heartland Credit Union have both received building permits. Staff also provided an overview of projects that are going through the application process. There is both commercial and residential activity in the City. UPDATE ON DOWNTOWN REDEVELOPMENT Staff provided background on downtown redevelopment and updated the EDA on conversations with Tony Harmening on the Cattle House restaurant that was approved for a preliminary plat and PUD in April. Harmening is still interested in moving forward with the project but has not provided a formal request to extend the timeline of the Option Agreement. The EDA commissioners discussed their desire to continue to work with Harmening, but to make sure the City is covered on its end of the agreement. Staff asked if there was a timeline that the EDA is comfortable with and the commissioners generally agreed to wait and see if the project moves forward in the next three months before opening up the property to other interested parties. ADJOURNMENT Commissioner Klein made a motion, seconded by Commissioner Houle, to adjourn at 5:54 pm. Ayes: Denaway, Houle, Klein, Petty, Puleo, and Weidt. Nay: None. Motion Carried. Respectfully submitted. Emily Weber, Community Development Assistant CARES Grant Background Background The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was created as a federal response to the economic decline due to the COVID-19 pandemic. With this act, $150 billion were granted to State Government. On July 7t", Hugo received $1.1 million from the Minnesota Department of Revenue. The City can use this money for necessary expenditures incurred due to the COVID-19 public health emergency. This can include providing financial assistance to local businesses. At its August 3, 2020 meeting, the City Council made a motion to direct staff to have a discussion with the EDA to determine if there is a need for a grant program for local businesses. The grant program would be to provide relief and cover eligible expenses under the CARES Act. The Washington County Small Business COVID-19 Relief Fund is currently available to provide grants to local, small businesses in the County that were adversely impacted by the pandemic. The $10 million program will provide grants up to $15,000 to employee -based small businesses and $7,500 for self-employed entrepreneurs. Businesses have until August 24, 2020 to apply. If the City were to create a program, the application period would likely be open in September, and funds awarded in October. All grant money must be spent by November 15, 2020. Discussion Topics for the EDA • What would a grant program from the City look like? • What businesses would be eligible? Le. are nonprofits included? • What would be the dollar amount of grants awarded? • How would businesses be notified of the program? CARES Business Grant Program (Example) The City of Hugo has created the CARES Business Grant Program to assist eligible businesses impacted by COVID-19 pandemic. The City has set aside $200,000 for the grant program and businesses can apply for a one-time grant award not to exceed $10,000. Grants are on a first come, first served basis. The program is subject to funding availability from the City. Only one application per business entity is allowed to be submitted and the City will review each applicant's request for grant funds to determine the level of assistance that will be provided. Applications will be open from September 9, 2020 — September 25, 2020. All grant funds allocated to businesses must be spent by November 15, 2020. All grant recipients are required to submit documentation of expenses specifying how the entirety of the grant funds were allocated. Eligible Uses: • Funds may be used to cover operating expenses including payroll, rent/lease payments, mortgage payments, private utilities, or other critical business expenses as a result of the public health emergency. • Expenses in response to CDC guidelines. • Eligible expenses are from March 1, 2020 to November 15, 2020. • Does not include expenses that have been previously reimbursed by other sources of funds (County, State, and/or Federal). Non -eligible Uses: • Funds cannot be used to replace lost revenues. • Funds may not be used to cover taxes. • Does not include expenses that have been previously reimbursed by other sources of funds (County, State, and/or Federal). Eligible Businesses Criteria: • Must be in good standing with the City and County. • Demonstrate that the business was adversely affected by Executive Orders related to COVID-19 business restrictions. • Demonstrate financial hardship as a result of the COVID-19 outbreak. • May include businesses that have applied for/received any other COVID related federal funding. However, only eligible expenses that have not been reimbursed by additional programs are considered eligible for the Hugo CARES Business Grant Program. .■ : MVWASHINGTON COUNTY Community Development Agency 7645 Currell Boulevard, Woodbury, MN 55125 office:651-458-0936 fax:651-458-1696 Washington County Small Business COVID-19 Relief Fund Guidelines In response to Federal and State Governments pronouncing a State of Emergency due to the fast moving COVID-19 pandemic, Minnesota Governor Tim Walz signed Executive Order 20-04 to order temporary closure of Minnesota restaurants and bars to dine — in customers. Executive Order 20-08 further ordered the closing of other places of public accommodation. In addition, Executive Order 20-20 ordered all persons currently living within the State of Minnesota to Stay at Home. The goals and objectives of this program are: • To provide emergency financial assistance for businesses that are experiencing financial hardships due to the COVID-19 related restrictions. • Allocate Federal CARES Act resources to this program from the State of Minnesota and local governmental units that have received direct funding. • Ensure that this assistance will be beneficial to the business and in compliance with the Federal rules, regulations and appropriation. • Facilitate business survival, especially for small businesses during this pandemic. • Enhance, to the greatest extent possible the retention of jobs throughout the County. To provide emergency business assistance grants to small local businesses in Washington County adversely impacted by the COVID-19 pandemic, the Washington County Small Business Relief Fund will provide grants of up to $15,000 to small businesses most in need of support. Providing this support is intended to increase the capacity of small businesses with a physical location in Washington County to survive the current pandemic crisis and may help prevent business closures, job losses and potential future blight scenarios. We understand there is a cost to reopening your business safely. These grant funds can be used to ensure your business can afford to operate while maintaining the social distancing guidelines for the safety of your employees and customers. The Relief Fund will be administered by the Metropolitan Consortium of Community Developers' (MCCD), Open to Business Program, which currently provides technical assistance and access to capital for businesses throughout Washington County. Terms • Up to $15,000 grant based on economic injury from COVID-19 and eligible expenses. Funds can only be used for Federal CARES Act eligible COVID-19 related or incurred public health emergency business operating expenses, including rent payments, mortgage payments, payments to suppliers, payments to private utility companies or other critical non -payroll business expenses (including expenses related to reopening) as approved by MCCD and the CDA. If any other COVID-19 related business assistance grant funds were received from the SBA Paycheck Protection Program, Economic Injury Disaster Loan, Pandemic Unemployment Assistance, local city or township grants and/or State of Minnesota Department of Employment and Economic Development, Washington County funds may NOT be used for the same expenses that were paid with other sources of funds. By Federal CARES Act regulations, funds may not be used for government utility (i.e. water and sewer) expenses or for the payment of federal, state, local tax obligations which includes property and sales tax. Eligible Businesses • Must be a locally owned and operated for -profit business with a physical address documenting business establishment in Washington County. Multiple individual businesses located in Washington County that are owned by one owner are eligible to apply. • For up to the maximum $15,000 funding limit, businesses must have at least one FTE (full time equivalent) employee in addition to the owner as of March 1, 2020 and not more than 50 FTE employees, and generate under $3.5 million in annual revenues. • Must have been operating for at least 6 months prior to March 1, 2020. • If required by the state or local government, businesses must be licensed and in good standing. Property taxes must have been current prior to March 1, 2020. • Business must demonstrate a significant loss in revenue since March 15 (no credit score or collateral requirements apply). • Non -employer home -based businesses are eligible; however, priority will be given to employer businesses with separate non-residential property addresses. Separate funding level (up to $7,500 maximum) for non -employer home -based businesses or for self-employed entrepreneurs that have no employees that have a physical location for their business in Washington County other than their personal residence. All other terms and conditions of these policies apply to any home -based or self- employed businesses. Certain businesses are ineligible, including: Non-profit, religious, or membership -based organizations. Corporate owned chains are ineligible to receive funding; however, locally owned franchise businesses are eligible. Businesses in default conditions prior to February 29, 2020. Businesses that primarily derive income from: gambling, adult entertainment, pawned merchandise, guns, passive investments, real estate transactions, property rentals or property management, billboards, or lobbying. Application Process All businesses must complete, sign and certify the grant application. The business must provide all required information verifying their eligibility. All businesses must provide, and document evidence of COVID-19 eligible expenses incurred. Application Forms will be accepted beginning August 10, 2020 through August 24, 2020 at 4:30 pm. Applications will be prioritized and funded to the businesses that best meet program goals and priority will be given to those business types previously identified as stated above of this policy. The program administrator and/or the CDA reserve all rights to deny any application that is not in compliance with program guidelines or these stated policies. If applications exceed the funding available, the fund administrator Metropolitan Consortium of Community Developers (MCCD) will select grant recipients using a priority -based selection process based on criteria determined by Washington County. The program administrator, MCCD, will begin to notify approved applicants by email on or before August 31, 2020. Upon notice of an approved application, applicants will be required to submit the following within 10 business days: 0 2019 Federal Business Tax Return or appropriate Business Tax Schedule - based on entity type. Businesses that have not yet completed a 2019 Federal Return are eligible to apply and substitute other documentation of revenue. o Evidence of revenue loss related to the COVID-19 pandemic emergency. Applicants should submit documentation that best demonstrates the impact and is deemed acceptable to Program Administrator. Some examples of acceptable documentation include: Landlord letters, Sales Tax Reporting, Period Statements from 3rd -party Sales Platforms, Merchant Services Statements, and Point of Sale or Register reports. o Evidence of employment prior to March 1 st, 2020. Acceptable documentation may include period reporting from a 3rd -party payroll processor, applicant's Federal Form 941/Employer's Quarterly Federal Tax Return, or other State or Federal payroll -related filing. o Any additional documentation or information deemed necessary by the fund administrator to determine eligibility, generate grant agreement documents, disburse grant proceeds, or meet program reporting requirements. o Failure to submit any required documentation will result in forfeiture of funding award. Grant proceeds will be disbursed after applicant complies with all policy provisions; and executes a grant agreement. Note: The Washington County CDA Board reserves the right to authorize staff to revise these guidelines as needed to best address the impact of the COVID-19 pandemic. (10 WASHINGTON COUNTY �Wn GdUNTY (,� Community LOMCCD tOn Development / Agency Metropolitan Consortium �� out of Community Developers � Washington County Small Business Relief Grant Program Washington County is launching a $10 million program to provide grants to small businesses within the county to help them recover from the ongoing impacts of COVID-19. The fund will provide one-time grant awards of up to $15,000 are available to eligible applicants to assist with non -payroll expenses, including rent, mortgage payments, utility bills, payments to suppliers and other operational expenses that have occurred since March 1, 2020. Washington County, in collaboration with the Washington County Community Development Agency (CDA), are working with MCCD (Program Administrator) to collect, review, and award these grants. This initiative is being funded by Washington County's allocation from the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act. To qualify, an applicant must: Employ the equivalent of 50 or fewer full-time workers. • Generate under $3.5 million in total annual revenues. • Be a private for -profit business that has a permanent physical location in Washington County, Minnesota. • Be in good standing with the Minnesota Secretary of State and Minnesota Department of Revenue as of March 1, 2020. Be in good standing with Washington County and the city where the business is located. Be able to demonstrate financial hardship as a result of the COVID-19 pandemic. The online application will be available Monday, August 10th and will run through Monday, August 24th at 4:30PM. Incomplete applications will not be accepted and will be reviewed on a first -come, first -served basis. A business that has applied for the Minnesota Department of Employment and Economic Development grant program should also apply to the Washington County program in case they aren't selected in the state process. For complete grant information, visit: www.washingtoncountVcda.org. For questions, call 612-789-8838 or email wccovidrelief@mccdmn.org COVI D-19 SMALL BUSINESS RESOURCES WASHINGTON COUNTY Community UDevelopment Agency TO BUSINESS Financial Resources Program Agency Eligibility Amount Interest Collateral Requirements Terms Deferral Period Forgivable? Other/Notes Must be a locally owned and operated for -profit business with a physical address documenting business establishment in Washington County. Multiple individual businesses located in Washington County that are owned by one owner are eligible to apply. • For up to the maximum $15,000 funding limit, businesses must have at least one FTE (full time equivalent) employee in addition to the owner as of March 1, 2020 and not more than 50 employees, and generate under $3.5 million in annual revenues. N/A, however, applicants will make • Must have been operating for at least 6 months Up to $15,000 for their grant request amount based on prior to March 1, 2020. employee -based expenses incurred during COVID-19 Washington County • If required by the state or local government, businesses and these expenses are subject to CARES Act Small Washington businesses must be licensed and in good standing. N/A N/A N/A N/A audit. The grantee will be required to Grant application will be posted on August loth, Business Relief Grant County Property taxes must have been current prior to March 1, 2020. • Business must demonstrate a significant loss in Up to $7,500 for self-employed to pay part or all the grant back if they cannot provide proof of the 2020. revenue since March 15 (no credit score or collateral entrepreneurs expenses reported to receive the requirements apply). grant. • Home -based businesses are eligible; however, priority will be given to employer businesses with separate non-residential property addresses. Separate funding level (up to $7,500 maximum) for home - based businesses or for self-employed entrepreneurs that have no employees that have a physical location for their business in Washington County other than their personal residence. All other terms and conditions of these policies apply to any home -based or self-employed businesses. Any business with less than 500 employees (including Unsecured up to 25K; loans - Up to 3 to 4 weeks to process application sole proprietorships, independent contractors and of over 25K will need to give If approved for EIDL, any loan - Apply online self-employed persons), private non-profit Up to $150000 — 3.75%- the SBA access to collateral, Up to advance you received (up to - List of supporting financial documents SBA Economic Iniury Small Business organization or 501(c)(19) veterans organizations. applications,due business that does not mean that you 30 Up to 12 months $10,000, $1,000 for each employee) requested Disaster Loan — Phase 2 Administration Businesses in certain industries may have more than by 12/31/20 o 2.75/o non- need to have your loan fully years will be applied to the loan. Th e - Approval can be based on credit score 500 employees if they meet the SBA's size standards profit collateralized, but if you advance does not need to be repaid. - Personal Guarantees for loans over $200k for those industries. have collateral it will be - Apply at: https://covid19relief.sba.gov/ used. SBA Paycheck Small Business 2 5 - Up to 1 to 2 weeks to process application Protection Pro ram 9 Administration An business with less than 500 employees (including y g U to $10M p 1% No U to 6 months p The amounts spent b the borrower p y Apply through an SBA -Approved Lander pp y g pp Phase 2 sole proprietorships, independent contractors and years during an 8-week period after the - Loan based on 2.5x average monthly payroll Updated April 22, 2020 COVI D-19 SMALL BUSINESS RESOURCES ICU WASHINGTON COUNTY Community UDevelopment Agency TO BUSINESS self-employed persons), private non-profit origination date of the loan on: - Smoother application process organization or 501(c)(19) veterans organizations. payroll costs, interest payment on - No Personal Guaranty Businesses in certain industries may have more than any mortgage incurred prior to - Minnesota SBA Approved Lender 500 employees if they meet the SBA's size standards February 15, 2020, payment of rent for those industries. on any lease in force prior to February 15, 2020, and payment on any utility for which service began before February 15, 2020. 1. Have been established before March 13, 2020. No payment of 2. Must have 15,000 employees or fewer or principal will be have had an annual revenue in 2019 of less required during the than $5 billion. first two years of 3. Must not be a type of business ineligible to The interest the loan, and no receive Paycheck Protection Plan (PPP) funds, rate for the payment of interest except with regards to number of employees. loans in each will be required 4. Be "created or organized in the United States program during the first year SBA Main Street Loan Small Business Association or under the laws of the United States with significant operations in and a majority of its Between $250,000 and $300 million facility is the adjustable rate of the loan. Under the programs, 15% Apply with your local SBA Lender Program employees based in the United States." of LIBOR (one- of the principal will 5. Have not participated in the Primary Market or three- be due at the end Corporate Credit Facility (PMCCF). month) plus of years three and 6. Not have received "support pursuant to the 3%. four, and a balloon Coronavirus Economic Stabilization Act of payment of 70% of 2020 (Subtitle A of Title IV of the CARES principal will be Act)."2 That is the section that provides $500 due at the end of billion of loans to large businesses. year five. These loans can provide economic support to small businesses to help overcome the temporary loss of revenue they are experiencing and can be a term loans or used Any business in operation before March 13, 2020, that Not to Exceed to bridge the gap while applying for a SBA Express Bridge Small Business meets the SBA's Size Standards (predicated or NAICS Up to $25,000 o Prime + 6.5/0, No 7 years N/A No direct SBA Economic Injury Disaster loan. Loan (EBL) Administration code and annual revenue). fixed, variable If a small business has an urgent need for cash while waiting for decision and disbursement on an Economic Injury Disaster Loan, they may qualify for an SBA Express Disaster Bridge Loan. Contact your Lender Updated April 22, 2020 COVI D-19 SMALL BUSINESS RESOURCES WASHINGTON COUNTY Community VDevelopment Agency TO BUSINESS Business Technical Assistance Washington County has partnered with the Metropolitan Consortium of Community Developers (MCCD) to offer the Open to Business program. This program provides free one-on-one assistance from MCCD's expert staff, customized to meet the specific needs of each entrepreneur. Open to Business will provide prospective and existing entrepreneurs in Washington County with counseling with a business advisor. Metropolitan Consortium of Current and perspective entrepreneurs Open to Business Community Developers Any resident or entrepreneur located in Open to Business Website Washington County Business Advisor: Tyler Hilsabeck Email: thilsabeck@mccdmn.org Phone: (612) 789-8838 Unemployment Insurance • Summary of Program: The Shared Work program offers an alternative to layoffs for employers facing a temporary downturn in business. Administered by DEED's Unemployment Insurance Division, the program allows employers to divide available hours of work among a group of employees instead of implementing a full layoff. These employees may then receive partial unemployment insurance benefits while working reduced hours. The purpose of Shared Work is to avoid a layoff, not to subsidize wages. Shared Work Department of Employment Minnesota businesses Program g and Economic Development P Why this might make sense for you: Shared Work can help employers avoid the difficulties that can o along with a layoff. If employees kee working Y g Y pg g YP g during a temporary slowdown, employers can more quickly gear up when business conditions improve. Learn more about the Shared Work Program on DEED's Unemployment Insurance Division's website Website: Minnesota DEED Shared Work Program FAQ Coronavirus SBA Loan Questions 1. What loans are available to help small businesses during Coronavirus? • The Economic Injury Disaster Loan from the Small Business Administration (SBA). • The Paycheck Protection Loan (Part of the CARES Act). 2. How do I get these loans? • Apply for the Economic Injury Disaster Loan directly from the SBA here. • Paycheck Protection Loans are government -backed but will come from private banks. You should inquire at your local bank about these released the loan application. You can see it . You will still need to apply for the loan at your local bank. This is just the application. 3. How much can I borrow? oans. The Treasury Department has just Updated April 22, 2020 WASHINGTpN COUNTY • Community An COVI D-19 SMALL BUSINESS RESOURCES T °ge°`ypment TO BUSINESS • The Economic Injury Disaster Loan from the SBA can be up to $150,000 working capital for up to a 30-year term at 3.75% (2.75% non -profits). Not everyone will qualify for that amount. • The Paycheck Protection Loans can be for 2.5 months of average payroll or $10 million — whichever is less. 4. Do I need to repay these loans? • You must repay the Economic Injury Disaster Loan from the SBA. Payments can be deferred for one year after the origin of the loan. • All or some of the Paycheck Protection Loan may be forgiven (converted into a grant). There are specific requirements about how you spend the loan and if you continue to employ your workers in order for it to be forgiven. Read them here. 5. What about the $10,000 emergency grant I've heard about? • The SBA is offering to advance businesses a $10,000 grant that does not need to be paid back. That grant will be paid quickly — in as little as three days. • You can apply for that $10,000 grant as part of the Economic Injury Disaster Loan process. If you are awarded the $10,000 emergency grant, you will not have to pay the grant Oust the grant) back. You will still have to repay the rest of your SBA Economic Injury Disaster Loan. 6. Can self-employed workers and freelancers apply? • Paycheck Protection Loans are available to 501(c)(3)s, self-employed, sole proprietors and independent contractors. • SBA Economic Injury Disaster Loans are available to small businesses and non -profits (including faith -based) with fewer than 500 employees, sole proprietors and independent contractors. 7. Can you apply for both loans? • Yes. You can apply for and receive both loans. 8. Do I need good credit to qualify for these loans? • The Paycheck Protection Loan requires no collateral and no personal guarantee. • The Economic Injury Disaster Loans are given based on credit scores. No tax returns are required. You can borrow up to $200,000 without a personal guarantee. 9. What if I've already fired or laid off my employees? Do I still qualify for a Paycheck Protection Loan? • Your loan may be forgiven if you bring back employees and restore wages generally within 30 days and maintain them through June 30. Updated April 22, 2020