Bloomington businesses could see funds as early as next week depending on the application process.
(Ethan Burks, WFIU/WTIU News)
Bloomington businesses suffering during the coronavirus pandemic will now have an opportunity to get money from the city.
On Tuesday night, council members approved a plan to allocate $2 million from the city’s food and beverage tax fund.
Customers have been paying the 1-percent tax at local establishments since February of 2018. The money is supposed to be used for the Monroe County Convention Center expansion project, but now serves a more urgent purpose.
“We’re trying to cover the immediate needs and close that gap in timing between other funding,” director of the city’s Economic and Sustainable Development Alex Crowley says. “The initial period between now and federal funding could be make-or-break for many businesses.”
Crowley is a member of Mayor John Hamilton’s Economic Stability and Recovery Working Group (ES&R). This group put together the strategy for how the funding will be implemented.
“We don’t have the capability to carry the local economy,” Crowley says. “What we do have is the ability to tactically get in and help in the near term.”
The group came up with a two-fold strategy: funding and non-funding supportive tools.
The city’s funding tools will come from two sources:
$2 million from the Food and Beverage Tax Fund (approved by city council)
$500,000 from the Bloomington Urban Enterprise Association (BUEA: meets Wednesday at 12pm to discuss future planning)
The non-funding supportive tools will be available for businesses to use as a resource during the pandemic. This includes the Bloomington Chamber of Commerce’s COVID-19 resource page, technical assistance from The Mill and Southern Indiana Small Business Development Center, and suspending things such as business licensing fees.
Local restaurants and businesses that promote tourism are eligible for the food and beverage funds.
“There will be businesses that kind of fall into that fringe area that we may not be able to make that nexus on tourism, and that’s where the BUEA funds come into play,” city Controller Jeff Underwood says.
The ES&R Group determined through various surveys and feedback that local businesses need working capital of under $50,000 immediately. The group says this amount should fill the gaps from state and federal funding.
“The group recommends creating small-dollar, rapidly deployed capital with short-term repayment deferral, low interest, and simple eligibility criteria,” the ES&R strategy states.
This type of funding is needed because outside funding such as Small Business Administration (SBA) disaster loans aren’t expected to come until 8-12 weeks after a business submits its application.
“Our businesses are fading, and some have already faded,” President and CEO of the Bloomington Chamber of Commerce Erin Predmore says. “They’re shuttering their businesses and the Bloomington that we love is not going to be here if we don’t act quickly.”
The ES&R Group’s strategy says the next step is for Mayor Hamilton to appoint a commission that will oversee fund applications and communicate with the businesses that wish to apply. The city is calling this its Rapid Response Fund Advisory Commission (RRF), which will have 7 members from the following sectors:
Local Banking (2)
Local Food and Beverage (1)
Financial Services (1)
Local Investor (1)
Local Tourism Retailer (1)
Local Nonprofit Tourism (1)
The mayor will start the appointment process this week.
The city will distribute the food and beverage funds in two tranches to ensure that the initial investments are controlled and effective. The first tranche will be $1 million given out the week of April 13. The second tranche with the additional $1 million will be determined after the first week.
“I expect that there’s going to be a return to the food and beverage tax before we’re done. That two million dollars is not going to cut it,” City Council President Steve Volan says. “I’m happy to support any additional funds as we see how this whole thing works.”
Councilmember Volan is also on the Food and Beverage Tax Advisory Committee. In a March meeting, Volan mentioned the fund had about $6 million in it.
