Palm Desert creates program to provide interest-free business loans
The $ 2 million that the Palm Desert city council set aside in January for an economic development incentive program will instead be used to help businesses affected by the coronavirus pandemic.
Businesses across the state were affected by Gov. Gavin Newsom’s Home Support Directive issued on March 19, which also shut down all businesses except “core” businesses.
Staff developed the Unite Palm Desert Business Support program to help sectors hardest hit by shutdown orders: restaurants, retail, services, local small businesses, and hospitality.
“Our business community, along with the rest of the city, is now feeling the financial, emotional and health impacts of this unfortunate pandemic,” said Wayne Olson, executive analyst.
While there are federal, state, and county loan programs, additional funding may be needed to support the local economy, Olson said.
On Thursday, city council unanimously approved the “reallocation” of Invest Palm Desert funds to create the Unite Palm Desert Business Support program.
Of the $ 2 million pot, $ 1 million will be set aside for an interest-free loan assistance program.
“Invest Palm Desert made a lot of sense when we adopted it and I really want to come back to this program because I think it will be effective once we get through this crisis, ”said board member Sabby Jonathan.
“But channeling those dollars into something that has more impact to help our businesses is, I think, the right way to go,” said Jonathan.
The money was taken from the city’s Economic Development Reserve Fund, which now has a remaining balance of $ 1.9 million.
La Quinta has a similar program, put in place in March by the city council that set aside $ 1.5 million from the city’s emergency disaster reserves. Small business owners can apply for up to $ 20,000 in interest-free loans, repayable over two years, starting in April 2021. The “COVID-19 Emergency Economic Support for Small Business” program has so far loaned $ 330,000 to 36 companies and is currently considering a second round of nominations.
Rancho Mirage developed a program in March to help its restaurants stay open with take-out service during the pandemic, setting aside $ 400,000. The city has helped 36 restaurants with up to $ 8,000 in a single aid which does not have to be repaid.
The Unite Palm Desert Business Support program has five key focus areas:
- Emergency loan assistance program: $ 1 million set aside for interest-free loans for small businesses with 25 or fewer employees. Companies can claim up to $ 25,000 or $ 1,000 per full-time equivalent employee. No payments are due for the first 24 months, however, loans are forgivable for companies who can provide documentation showing the funds were used to mitigate the impacts of COVID-19. Some details of the program are still being worked out, but the city is planning an application period from May 27 to June 3.
- Corporate awareness efforts: This involves staff from various municipal departments working to ensure that local businesses are aware of all financial aid programs – federal, state, and local – and does not require funding. In addition, the city is offering businesses a 90-day extension to renew business licenses.
- Hospitality industry: $ 900,000 set aside for a guest / visitor incentive program that will provide vouchers for discounted meals etc. at various companies for those paying a certain number of nights in a Palm Desert hotel / resort. Details of this program are still being worked out and will be ready whenever the state says hotels / resorts can reopen.
- USC expansion efforts: $ 50,000 will go to the city’s new nonprofit organization to fund an independent Cal State Palm Desert campus at the current location. The fund was launched in March by the council, which appropriated $ 100,000 as seed money in the hopes that other nonprofits and philanthropists would also donate. But the funds initially pledged had to be withdrawn due to the financial impacts of the pandemic.
- Community partners: $ 50,000 set aside for business-oriented organizations such as business improvement districts and chambers of commerce.
Program funds were initially set aside in January for a new “Invest Palm Desert” economic development incentive program to allow eligible business and commercial property owners to contribute up to $ 500,000 each towards funding. capital improvements.
Twenty-five companies had originally planned to apply, Olson said, but only two are continuing the application process. Most of the rest said their capital improvement plans were derailed by the pandemic, he said.
The two who continue the application process with specific plans to begin their capital improvements will be brought back to the board when they reach a point where they qualify for matching funds.
“I think we have to find a way to keep our word,” said Council member Jan Harnik.
Olson said $ 1.9 million is still available in the economic development reserve fund that the council can use when the time comes.
Desert Sun reporter Sherry Barkas covers the towns of La Quinta, Indian Wells, Rancho Mirage and Palm Desert. She can be reached at [email protected] or (760) 778-4694. Follow her on Twitter @TDSsherry