Some early programs designed to help small Akron businesses that survived the pandemic fell short of helping everyone who raised their hands for assistance.
More than 7 in 10 businesses that applied for small business grants funded with American Rescue Plan Act federal stimulus dollars were deemed ineligible for help.
Some small businesses still operating below capacity due to short staffing, supply issues, inflation and COVID-19 have watched with bewilderment as yoga studios, tattoo shops and other restaurants literally next door or across the street collect $10,000 each from the city.
On the north side of Market Street in Highland Square, the owners of Square Scullery in Highland Square could have paid their rent for a year or their staff for two months with a $10,000 grant.
“It would be very substantial,” said Matthew Ulichney, who co-owns the tiny restaurant in the back of an American Legion Hall with his wife, Heather.
The couple started with a food truck and opened the modest, three-table dining room with bar seating just before the pandemic hit, adding an outdoor patio a few months later.
Across Market Street, a row of neighboring businesses applied for and received several of the $10,000 grants from the city’s $1 million, ARPA-funded Small Business Relief Grant Program.
Square Scullery’s looked at the eligibility map provided by the city and knew they’d be denied, “just because we’re on the wrong side of the street.”
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Next door, attorney Jay Linnen, whose law office is still cautious about letting in guests with a sign on the door pointing to COVID-19, said he was unaware the city was offering grants to small businesses. With the city’s planned spending of the $145 million in American Rescue Plan funds, the mayor has set aside for small business support about a third of what the city is giving its own employees in “premium” bonuses.
Who was eligible for small business grants?
Akron defined applicants as eligible if their businesses were located in Qualified Census Tracts, where the federal government considers at least half of residents as living at or below 60% of the federal poverty line.
The city opted to use this criteria based on advice that the federal government would scrutinize the expense less and the program would be easier to administer.
Census tract lines, however, are uncompromisingly static, dividing next door neighbors who have faced similar economic hardship in the past three years. That’s the reason Square Scullery and an untold number of businesses never applied. They looked at the QCT map, realized they opened up shops around statistically less poverty and didn’t bother to apply.
Along with not having at least two full-time employees, being outside a QCT was the top reason why 369 of the 513 applicants didn’t qualify, explained Steve Millard, president and CEO of the Greater Akron Chamber, which administered the grant program for the city.
Not all businesses that qualified got help
Of the 144 applicants that did qualify, city administrators seeded the program with only enough to award 100 $10,000 grants.
Businesses like Chin’s Place — a Chinese restaurant on the eligible side of Market Street — applied and apparently qualified but were not awarded. And not because they lacked the need.
On a recent afternoon as the phone rang with to-go orders, two men sat on chairs just inside the front door. Behind a short wall, chairs were still stacked upside down, as a lingering sign of the pandemic-induced staffing shortage.
With $10,000, “I could open up the dining room,” owner Elaine Chin said. Not everyone who calls the restaurant is simply looking for carryout food.
“Every day, they call and ask, ‘When are you going to open up’” the dining room, said Chin, who suggested that the city could have reduced the $10,000 grant awards to “give more businesses an opportunity,” like the ones that were eligible but not awarded.
And it’s unclear if the city will offer another round of grants or expand the eligibility of the program, using criteria that would recognize that businesses just outside Qualified Census Tracts may have just as much need.
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Millard said limited resources could be more sustainably applied to technical, financial and other advice for small businesses, as opposed to one-time awards.
The QCTs, one of three criteria available to city staff creating the program, offered “safe harbor,” a federally approved and statistical definition of businesses that were disproportionately economically impacted, Millard said.
“And, so, that was the rationale for using the QCTs as the qualifier,” he said. “Outside of that, there was a lot of additional questions that would have had to have been asked about the economics of the business (applying for relief) and the justification or the impact, etc., which were just not practical to do in the scope of the grant process.”
Even though the mayor has already committed the city’s $145 million share of ARPA funding, some on council say it’s not too late to learn and do better.
“It’s one thing at the initial rollout of ARPA to have taken a very conservative view of what the criteria were,” Ward 1 Councilwoman Nancy Holland, who represents Market Street business from downtown through Highland Square, said of taking precautions to spend confidently on small business support.
“We now have the benefit of coming up on two years,” she said, explaining that cities of similar size could be informative studies of how Akron might improve the development and administration of ARPA spending. “We can and should be looking at this in other ways.”
Reach Doug Livingston at [email protected] or 330-996-3792.