EDA approves emergency business relief
NEW ULM — The New Ulm Economic Development Authority (EDA) held a special meeting Friday to provide emergency relief for businesses impacted by the COVID-19 pandemic, which included the creation of $250,000 in grants for qualified businesses.
COVID-19 has disrupted normal business practices across the country resulting in financial cost and loss. The $250,000 emergency relief fund is intended to quickly assist business owners to stabilize their cash flow.
City Manager Chris Dalton said this grant was specifically for those impacted by the Executive Orders from Governor Tim Walz. The intention of the funds is to assist and bolster local small businesses before state and federal loans are available.
Initially staff recommended $100,000 in grants funds with each business eligible for $2,500. This meant a maximum of 40 businesses could apply for the loan. The grants would be awarded based on the order applications were received.
The board was in favor of this emergency relief fund, but wanted to expand it beyond $100,000.
Board member Daniel Braam believed $100,000 would go quickly and suggested the board continue collecting applications to determine if further need in the community.
Dalton said he was uncertain how many businesses in New Ulm were impacted by the executive orders, but he estimated there were 32 restaurants, at least 10 bars and at least 10 nail and hair salons that would be eligible. If all of these businesses applied for the grant, this would exceed the $100,000 fund. If all other eligible businesses were counted, there could be 100 businesses affected by the executive order.
Housing Coordinator Heather Bregel said the EDA could approve more than $100,000.
Dalton agreed, it was up to the board if they wanted to increase the funding or wait to approve later. He said if the funding was set at $200,000 the grant could be awarded to 80 businesses.
Assistant City Manager Audra Shaneman said there are other communities moving in this direction with a mixture of loans and grants.
Board President Charlie Schmitz favored approving $200,000 now instead of coming back to approve more funds later and would prevent the EDA from cutting off too many eligible businesses.
Dalton said the maximum grant available per business was set at $2,500 because it would cover fixed expenses over the next weeks.
Board member Les Schultz said $2,500 might be the equivalent of $2,500 for larger businesses but could mean a great deal for the smaller businesses.
“I think this is kind of a bridge,” Braam said. “I don’t think it is going to necessarily fix all the wrongs and all the ills, but my thought is it is going to get them where these other resources, both federal and state, are going to come online.”
Braam suggested $250,000 could benefit 100 businesses in New Ulm.
Board member Jessica Janni said the more they could do to help the better. She made the motion to create an emergency relief fund of $250,000 to assist businesses impacted by COVID-19. It was seconded by Schultz. It was unanimously approved by the board.
The grant mirrors the city’s previous business grant. Dalton said the only difference is this application has a list of eligible types of businesses. The applicant must identify the category of business.
The applications are available on the city website. Businesses can fill out the application over the weekend. Dalton said if all applications are in by Monday and Tuesday, the Finance Department could write the checks on Wednesday and businesses could have the grant check by Friday, April 3.
The EDA also approved a two month suspension of EDA Loan Payments for three months. This would include Commercial Rehab loans and Limited Loans.
Dalton said they received communication from an individual that has not received money this month due to the pandemic and executive orders. They asked to suspend their rehab loan.
Dalton said because businesses have not been able to make money, he suggested suspending these payments as a small way of helping struggling businesses. He suggested deferring payments until July 1 to give them some relief.
Board member Susan Fix made the motion to suspend the loan payments for April, May and June.
Schultz seconded the motion for discussion, but suggested extending the suspension even further.
“We’re sitting pretty well financially, businesses won’t be,” he said. “I think it should be longer than 90 days.”
Braam was in favor of halting the payments, but suggested the EDA forgive the payments for those months to not extend the date of the loan.
Schultz asked about the cost of EDA forgiving the loans.
Dalton was unsure of the cost of forgiving all the loans at this time, but that information could be provided at the next EDA meeting.
Shaneman said there are 18 businesses impacted by these loans.
The board decided to approve the 90 day loan payment suspension for now and determine the terms and whether to extend it at a later meeting.
The next regular EDA meeting is 8 a.m. Tuesday, April 14.