ECONOMIC DEVELOPMENT AND REVITALIZATION
STANDING COMMITTEE MEETING
December 11, 2024
4:00-5:30 PM
City Hall – Council Chambers
130 Cremona Drive, Suite B
Goleta, California
Mayor Pro Tempore Luz Reyes-Martín
Councilmember James Kyriaco
Robert Nisbet, City Manager
Shannon Kirn, Assistant to the City Manager
In person Spanish interpretation services will be available for this meeting.
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AGENDA
I. Public Comment (5 Minutes)
II. Old Town Small Business Assistance Program Initiatives (60 Minutes) Americans with Disabilities Act: In compliance with the ADA, if assistance is needed to participate in a City Council meeting (including assisted listening devices), please contact the City Clerk's office at (805) 961-7505. Notification at least 72 hours prior to the meeting helps to ensure that reasonable arrangements can be made to provide accessibility to the meeting.
MEMORANDUM
DATE: December 11, 2024
TO: Economic Development & Revitalization Standing Committee FROM: Robert Nisbet, City Manager
CONTACT: Shannon Kirn, Assistant to the City Manager
SUBJECT: December 11, 2024, Economic Development & Revitalization Standing Committee Meeting
ITEM I. Public Comment (5 Minutes)
ITEM II. Old Town Small Business Assistance Program Initiatives (60 Minutes)
RECOMMENDATION
Receive an update on the Old Town Small Business Assistance Program initiatives and provide direction to staff on implementing a grant program, or other program(s) identified and funding amounts for such programs.
BACKGROUND
At the September 3, 2024, meeting during Council Comments/Standing Committee Reports, Councilmember Kyriaco requested an item be brought to the full Council on a status report of the Economic Development Strategic Plan and to discuss specific Old Town initiatives that could be implemented sooner to be responsive to the comments made and to help identify initiatives to revitalize the Old Town neighborhood. Councilmember Kyriaco received concurrence, and staff prepared a report for the October 1, 2024, City Council meeting on Old Town economic development initiatives.
On October 1, 2024, the City Council received an update on the 2023-2028 Economic Development Strategic Plan and provided direction to staff on economic development initiatives for Old Town. The City Council discussed initiatives including a grant program, general business license fee waiver program, community events, and other agency resources through the Economic Development Collaborative Small Business Development Center (EDC SBDC).
The City Council approved the implementation of the general business license fee waiver program and the request to return the funding from Women’s Economic Ventures (WEV) that
had been identified for the Streamlined Small Business Loan Program to back full the business license waiver revenue loss.
Also at this meeting, the City Council discussed the potential structure of a grant program that could incorporate two (2) options, the first option could be for businesses that have experienced a loss in sales and the second option could include incentive-based criteria for businesses to attract new customers. Council ultimately directed staff to work with the Economic Development & Revitalization Committee, community stakeholders, and WEV to develop a grant program and other initiatives to support Old Town Goleta.
After the October 1, 2024, meeting, staff requested $50,000 back from WEV for the Old Town Business License Fee Waiver program. The City’s Finance Department and other key staff have been working on developing a new mechanism within our business license application system to trigger an automatic fee waiver during the application process for eligible businesses within the Old Town neighborhood. Staff expect this program to be ready in early 2025 and to run for one year from the start date.
DISCUSSION
Community Outreach
A survey was conducted to better understand the needs of Old Town businesses and get business owners' suggestions on how to best use the funds to support the businesses. Survey questions were specifically geared toward business owners to see what type of grant programs and criteria they would like to see. The survey was available online through Survey Monkey in both Spanish and English, and a total of 10 questions were asked. Staff sent out multiple email notifications to businesses encouraging them to take the survey and handed out flyers to Old Town businesses with a QR code encouraging them to take the survey.
The Greater Santa Barbara Hispanic Chamber of Commerce, along with its coalition, Old Town United, assisted in collecting survey responses through a grassroots effort and walked Old Town with paper copies of the survey for business owners to take in person.
The survey results described below include both the online and the paper surveys city staff received.
88 Responses (25 Spanish, 63 English):
• Online: 18 (2 Spanish, 16 English)
• Paper: 70 (23 Spanish, 47 English)
Key themes from the survey include (n=number of respondents):
• Struggling to retain and attract new customers was the highest response chosen as the most significant challenge that businesses are facing (n=36) • Most businesses reported that they would like to see grant programs that support marketing and advertising (n=38), change in year-over-year revenue was the second highest with 19 responses
• Most businesses would like to see initiatives that attract more customers to Old Town (n=39)
• Many of the written responses in “other” fields stated that construction, parking in general (employees not having parking, customers not having parking, back-in parking, and cars being parked for long periods without moving), large trucks not being able to safely unload, and the traffic have all held a negative compounding effect on their business with fewer people coming to Old Town
• Other comments were made about the need to enforce illegal food vendors, needing help with permitting, more events and fun programs that bring people and families, improving the look of Old Town (cleaning sidewalks, artistic murals, repairing/repainting businesses), suggestion for nighttime construction work, and a suggestion for the city to prioritize using only Old Town vendors/business for things cush as catering, janitorial, auto repair, events/venues, etc.
The aggregated responses to each survey question and all the open-ended comments will be presented at the December 11, 2024 meeting of the Economic Development & Revitalization Standing Committee.
Potential Grant Program Options
Based on the discussion from Council at the October 1, 2024 meeting, discussions with WEV, and the survey results, staff researched a grant program option to provide the businesses an opportunity to collaborate and take pride in ownership in investments in Old Town and their businesses. Businesses could apply for funding through a Pride of Place (POP) Grant to help implement innovative and creative programs and ideas for Old Town. More details are listed below.
• Pride of Place (POP) Grant
o Goal: Promote the businesses in Old Town by enhancing the sense of place and attracting more customers to Old Town Businesses
o General Criteria:
Applicant must be a business or nonprofit in Old Town and be in good standing with the City and any applicable state and federal agencies Joint applications with two or Old Town businesses would be ranked higher
Grants could be used for but not limited to:
• Marketing/advertising
• Beautification/plants
• Events/specials/deals
• Signage/façade improvement
• Benches/seating for customers
• Business parking in a private lot
Grant recipients would be required to provide a report on the outcomes and impact the funding had on Old Town
o Grant applications to be reviewed and selected by the Economic Development Committee and/or their designee(s)
The second option requested by Council was a grant program based on financial hardship. The two options can also be combined where financial hardship is but one of several criteria used for evaluating a grant proposal. For staff to incorporate such a program (or criterion), additional
data will be needed from businesses to quantify the financial hardship. The most accessible measure is sales tax revenue received by the City.
At the time this report was written, the City has not yet received the enumerated sales tax data for Quarter 2 (July - September 2024) from the State. Staff plan on conducting an in-depth review of the sales tax information and are working on creating a GIS file that will enable staff to filter and refine the data that only pertains to the businesses within the Old Town neighborhood. This data is expected to be received by late December 2024 with an analysis conducted in January-February 2025. This sales tax data will help paint a bigger picture of sales activity in the City as a whole, as well as just in Old Town which can be compared to other parts of the City, other cities in the County, and the state.
Updating Current Loan Program to Interest-Free
In December 2023 the City amended the Memorandum of Understanding (MOU) Agreement No. 2020-058, the City’s ReStart Loan Program with Women’s Economic Ventures (WEV) to the Small Business Loan Program with WEV. The current Small Business Loan Program with WEV has one active loan funded in 2023 and one loan funded in 2021 that has since defaulted.
Including the returned funding for the Business Licenses Fee Waiver program, there is about $145,000 of capital funding remaining. An option that the Committee could consider is making the Small Business Loan Program interest-free.
Listed below are the current Small Business Loan Program conditions:
• Loan amounts up to $10,000
• Fixed Interest Rate of 6.50%
• Origination Fee of 1%
An interest-free loan program would consist of the following:
• Administration fee of $1,000 per $10,000 loan, and/or $500 per $5,000 loan • With $145,000 capital remaining total administration cost would range $10,000-$15,000 • Potential cost structures to pay administration fee:
o Invoice the City per loan
o Or utilize the loan capital
• Minimum 3-year term of program (each streamlined loan has a 3-year term) The terms of an interest-free program would still need to be finalized and as directed staff would work with WEV to determine those specific details. This program could be implemented relatively quickly and brought to Council in early 2025.
Recommendation
Staff is aware of the desire and the urgency to move quickly in implementing programs to support Old Town. Staff also recognize the need to collect more accurate data on Old Town to be able to measure over time where there are significant differences. Such data could include sales tax information, and information on Project Connect (ex: traffic/car counts, bicycle lane and cyclist counts, etc.) that is scheduled to be presented to City Council at the first meeting in March. Depending on the urgency of implementing programs, staff recommend the following options:
1. If the Committee desires a program to be implemented more quickly, staff will finalize the POP Grant criteria and guidelines would be brought to the City Council meeting in January or the first meeting in February. Staff could also finalize the interest-free loan program if directed to do so.
2. If the Committee wanted to implement the financial hardship grant (or include such a criterion), staff recommends waiting until at least the end of January for the sales tax analysis to be complete. The Committee could also wait until after the first Council meeting in March when a more detailed report will be given on Project Connect. This would give staff more time to research the specifc criteria required for this type of financial assistance.