The Mountain View City Council voted unanimously Friday evening to create a special relief fund for the city's numerous small businesses that have been forced to close or scale back operations in response to the new coronavirus.
The initial $750,000 program includes $400,000 in city funds and $350,000 in private pledges. Council members agreed to it with a sense of urgency and without knowing all the details. City staff say it's likely that the money will provide either grants or loans of up to $10,000 per small business, meaning at least 75 businesses could receive help.
Santa Clara County is now entering its third week under a shelter-in-place order from public health officials to curb the spread of coronavirus, which caused the immediate closure of all nonessential businesses. It also meant restaurants and businesses that sell food, while still allowed to operate, could no longer offer dine-in services.
In many cases, the result has been steep staffing cuts and massive losses in revenue, according to city staff, prompting the need for action to help small businesses with the "short- and long-term consequences" of the public health crisis.
The effects are apparent all along Castro Street in downtown Mountain View, where nearly every storefront has posted signs about closures, reduced hours and modified services. As of Friday, more than 35 businesses had temporarily closed along the normally bustling street, the majority of which are considered "essential" and permitted to stay open.
Elsewhere in the city, staff reported Friday that local hotels are feeling the financial hit, with vacancy rates spiking to between 50% and 100% in recent weeks. The Mountain View Chamber of Commerce maintains a list of city services and offering takeout and delivery to guide customers to businesses that remain open.
City staff is planning to launch the relief program this week, which will be available for businesses with 50 or fewer employees who need immediate help for things like paying rent or other bills -- though they must show proof of financial hardship due to the coronavirus. The money will be available on a first-come, first-served basis.
The heart of the council's discussion was whether apartment owners should qualify for the small business assistance money. They technically operate a business in Mountain View and employ locally, and some may have difficulty paying mortgages and other costs in the event that tenants cannot pay the rent.
Councilman John McAlister said he wanted to allow owners of "small" apartment complexes, later determined to be nine or fewer units, to be able to tap into the city's fund for relief. Though the city had just recently passed a $500,000 relief fund for renters who have lost work, McAlister saw it as a separate measure. He advocated for a $100,000 increase in funding to assist landlords of smaller residential properties.
"There's two sides of the equation, the renters and the landlords," he said. "We want to make sure the landlords feel that they're being listened to, because I could see a scenario where if they have financial issues, that's going to make it harder to house tenants who (also) have financial issues."
Councilwoman Lisa Matichak said there's no guarantee small landlords are going to reap the benefits of the renter assistance program, and that the smaller apartment complexes also tend to be among the most affordable housing options in Mountain View.
"I don't think there's a guarantee that folks who are part of the rent relief program are the ones in the complexes who might need some help, and so I do view these as two separate programs," she said.
The idea didn't sit well with Councilwoman Alison Hicks, who said brick-and-mortar stores are experiencing a "tremendous" loss right now, and $400,000 is already a meager amount compared to the need. The fund should be designed chiefly to support those businesses, and not landlords, she said.
"I would hate to have it (be) a part of the $400,000 or $500,000 fund and have the majority taken over by small landlords," Hicks said. "I want to make sure that we do reserve the $400,000 for the brick-and-mortar stores because those are the most impacted."
The bulk of the money should go to retailers, and any funding for landlords should be set aside in a separate "bucket" of funds, said Councilman Chris Clark. And rather than make that money available for grants, it might make more sense to offer short-term, low-interest loans, he said. His proposal ultimately won the approval of the council, which voted 7-0 to create a $100,000 fund for small apartment owners.
The small business assistance program was passed at an emergency council meeting March 27, along with a host of other funding commitments, many aimed at homeless and vulnerable residents. The council committed $100,000 to create 24-hour safe parking sites at three parking lots in the city; $50,000 for publicly available sanitation and hygiene services; and $50,000 for food vouchers.
The city is also creating an assistance program for people who can't pay utility bills due to financial hardship caused by the coronavirus, which will allow residents to defer or even waive payments, and nixes penalties for failing to pay for city services. The city is not shutting off water or garbage services for people behind on payments.
City staffers say it's going to take until next week to get the utility assistance program up and running, and requested $100,000 in upfront funding.