Local Governments Support Businesses During the Pandemic
Since the COVID-19 pandemic started in 2020 in the United States, it instigated an economic crisis in the United States and has hurt numerous small businesses. The federal government, states, and local governments offer different grant programs, trying to help all kinds of businesses survive during this pandemic. Several local businesses in Champaign-Urbana, including various entertainment venues, have applied for grants and survived during this special period.
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) is a $2.2 trillion economic stimulus bill signed into law by President Donald Trump on March 27, 2020. It was later followed by the Paycheck Protection Program and Health Care Enhancement Act. According to the U.S. Small Business Administration (SBA), the Paycheck Protection Program (PPP) is an SBA-backed loan program that helps small businesses keep their workforce employed during the COVID-19 pandemic. It is a $953 billion loan program which aims to help small businesses survive and keep paying their employees during the pandemic. The loans offered under the program have an interest rate of 1% and will be forgiven if the businesses retain their employees and maintain their compensation levels during a 8- to 24-week period. The loans can only be used on certain kinds of eligible expenses. At least 60% of the funds must go to employee compensation. According to the SBA’s official website, 3% of the loan money under the program has gone to the arts, entertainment, and recreation industry, which has received $7,452,355,755 of loans in total.
On December 21, 2020, the Consolidated Appropriations Act for fiscal year 2021 was passed by both houses of Congress. It was signed into law by President Trump on December 27, 2020. The Consolidated Appropriations Act is a spending bill of $2.3 trillion in total, of which $900 billion are related to COVID-19 economic relief efforts in the United States. It was followed by the American Rescue Plan Act of 2021, which was signed into law by President Joe Biden on March 11, 2021. It is a $1.9 trillion economic stimulus bill to help the country recover from the economic and health effects of the COVID-19 pandemic.
According to the Illinois Department of Commerce & Economic Opportunity’s official website, the state administered the Business Interruption Grant (BIG) program in 2020 and early 2021. With a total budget of $290 million, it has offered $276 million in more than 9,000 grants to small businesses in over 600 cities and towns, and 98 counties throughout the state. It was later followed by the Back to Business (B2B) grant program, which is a part of governor JB Pritzker’s state economic recovery plan and aims to deploy small businesses recovery grants for those most heavily affected by the COVID-19 pandemic. The program has provided $201 million to 5,333 small businesses.
Locally, according to the City of Champaign’s official government website, a grant program administered by the city to help small businesses began on June 24, 2020. Champaign City Council revamped the City’s Small Business Incentive Program (SBIP) to allow allocation of $520,000 of federal Community Development Block Grant (CDBG) funding to small businesses that were affected by the COVID-19 Pandemic. All small businesses located in the City of Champaign that are eligible for the program can get up to $15,000 per grant application. The CDBG funding used to fund the program was from the CDBG-CV program contained in the CARES Act.
In the City of Urbana, according to their official website, they have administered the Small Business Assistance Program, which has now ended. The $250,000 funding for the program was also obtained from the CARES Act. The City of Urbana received 37 applications for Small Business Assistance program grants totaling over $321,000. After reviews of all applications, 28 were recommended for funding of which 16 were minority-owned and 7 were women-owned businesses.
Champaign County Government is a public taxing body, Darlene A. Kloeppel, Champaign County Executive explained. “Champaign County issues business licenses but does not provide financial support for entertainment venues and cultural institutions, nor local businesses in general.”
The State of Illinois introduced the Coronavirus Urgent Remediation Emergency (CURE) program in 2020 to support local governments during the pandemic. A subprogram, the CURE Economic Support Payments Grants Program (CURE-ES) provided local governments with funding to administer their own grant programs to support local businesses. In Urbana, Stepheny McMahon, the Economic Development Supervisor at the City of Urbana said that, “The City of Urbana administered CURE-ES grants to businesses to reimburse businesses for expenses incurred from the pandemic. Some of the grantees were cultural institutions with most being local businesses and organizations in general. All businesses impacted by COVID were welcome to apply for the CURE-ES funds. Priority was given to hospitality businesses, then retail and service, then office and industrial. $500,000 was awarded for the total CURE-ES round of grants. The grant limit was $20,000 per applicant and the range was $20-$20,000. The CURE-ES funding was state funding that came from the federal government. Each community was allowed to set their own grant criteria and create their own application and scoring matrix. Our goal was to reimburse businesses for COVID-19 related expenses such as masks, sanitizing products, air purification systems, etc.” Stepheny McMahon also mentioned that there were 66 applications submitted for CURE-ES grants, 59 businesses were awarded, and seven of them were culturally related businesses.
There is also another grant program that was offered in the City of Urbana. The city’s Interim Community Development Services Director, Sheila Dodd explained details about this grant program. “The City of Urbana offered a Small Business Grant to businesses who showed an impact due to the pandemic. We put a priority on those that were Minority or Women owned business. The business should be 15 employees or less. There was a team of grant and economic development staff who reviewed the applications. The process from grant opening through awards was four weeks – July 2020. The goal was to get the funding out quickly so the businesses would be able to stay open.” She has also said that the Small Business Grant program has awarded $250,961 in total, for an average grant of $9,295. The grant limit was $10,000.
Sheila Dodd said that the Small Business Grant program has revived the funds from The Community Development Block Grant CARES Act (CDBG-CV), which is a $5 billion program established as a part of the CARES Act. “The program was funded with CDBG-CV funding. This was a federal allocation given to cities throughout the U.S. to help offset the impact of the pandemic. The City received $629,815 in CDBG-CV funding. We focused on assisting with rent, small businesses, reentry programs (FirstFollowers), and housing for medically fragile people (Champaign County Health Care Consumers). A group of social service providers, City of Champaign, Champaign County, Rantoul, City of Urbana met weekly throughout the first 6-8 months of the pandemic. We were trying to provide assistance as quickly as we could without providing a duplication of services. All of this funding had to be used to address each community. We also received American Recovery Act funding which has not been allocated. City Council is looking at priorities for that funding.”
When asked how many cultural institutions and entertainment venues applied for the grants, Sheila Dodd replied, “No cultural institutions applied for the grant. CU Adventures applied and received a grant through the program.” CU Adventures is an escape room at 302 N Broadway Ave, Suite 100, Urbana, Illinois. Its owner, Chris Lukeman, said that they did apply for several grants. “We were lucky enough to benefit from a variety of state and local grants - these were a lifesaver in so many ways. Not only did they help to keep us current on expenses, but they gave us the flexibility and the stability to make better choices for our staff without sacrificing the future of our business. We received the BIG grant and the B2B grants from the state. Several grant programs required we keep the same numbers of employees or total hours worked. We were able to rehire or increase hours for staff members during the periods of grant programs like the PPP.” Chris Lukeman did not mention how much money they had received from each grant. However, according to the City of Urbana’s official website, they had received $10,000 from the Small Business Grant program. And, according to the Back to Business grant program’s official website, CU Adventures had received $55,000 from B2B. They had also obtained $95,292 from the Paycheck Protection Program.
In Champaign, T.J. Blakeman, the city’s Senior Planner for Economic Development, explained the programs they offered to support local businesses. “The program that we administered through our office, which was called our CURE-ES program. So, this was part of the federal CURE package, CARES package that the state allowed cities across Illinois to apply for portions of that money to then turn around and grant out to local businesses. So, we asked for 800,000 from the state of Illinois, and we received that and we distributed all 800,000, almost all 800,000 to about 110 businesses across Champaign. So, that's just kind of a real quick recap of, you know, all of the various programs that were made available from both the federal, state, and local levels.” According to the City of Champaigne’s final periodic financial report on the grant program provided by T.J. Blakeman, of the $800,000 approved for the program, 88.53% or $708,264.28 were eventually distributed. T.J. Blakeman also noted that, “The CURE-ES program was to reimburse businesses for extraordinary expenses that they had to spend related to COVID. So, if they had to buy masks, goggles, or plastic dividers for their businesses, or a new heating, and cooling system, to better filter their air, all of those expenses were eligible expenses in our program. And, so the way that worked was the business would purchase those items. Let's say they bought hand sanitizer and electrostatic wand, then some plastic dividers. They would then submit the receipts to us, and we would reimburse them 100% of those expenses, up to the cap of the program.”
According to data provided by T.J. Blakeman, there are three entertainment venues that have applied to the CURE-ES program. Kokushi Midwest Judo LLC received $5,450, Rock Steady Boxing Champaign received $806, and Sa Fitness received $8,271. The largest portion of the grants went to restaurants and bars, which accounted for 36.4% of the number of applications and 45.9% of the money dispensed. The amount of grant money entertainment venues received only accounted for 2.1% of the total amount.
Apart from the grant program, the City of Champaign has also provided other help to local businesses during the pandemic. “So, our support team, not just financially but also helping with regulatory relief. We implemented our, for bars and restaurants and retailers, we implemented our curbside program, where we took parking spaces and converted them to curbside spaces throughout downtown and campus town. We worked with those same businesses to allow them to expand citywide any bar or restaurant or retailer that wanted to expand out into their parking lot areas or onto public sidewalks. We allow that to happen as well. All at no cost to the business.” said T.J. Blakeman.
Even though the local governments said that they had provided grant programs to all local businesses and T.J. Blakeman even said he assumed every eligible business had applied to Champaign’s grant program, the number of businesses applying and receiving local government grants are limited compared to the number of businesses that received PPP loans. Some business owners said they believed that it was too hard to get money from local governments, some of them were not qualified for applying to grants, and some did not need the local governments’ support.
Aplus Karaoke sat at 214 W Main St, Urbana. Their owner Di Yu said that they had received grants from the government during the pandemic. “First of all, you must apply for this kind of grant program by yourself, but the city government will often send you information about the grant programs that are available and then tell you what you can apply for. But even though the program is available that does not mean you can get the money from it. It is a lottery, that is, maybe only 1%, 2% of people can get it.”
Di Yu said that Aplus Karaoke had applied to both PPP and COVID-19 Economic Injury Disaster Loan (EIDL), which is a federal program administered by SBA that has no employee retention policies but has a 3.75% interest rate and cannot be forgiven. However, they chose not to apply to any local government grant program. Di Yu said that, “In fact, these money are not given by the city government. It is impossible for us to get the money given by the local city government because there are too many businesses that apply for the city's grants, such as museums. We apply for EIDL and PPP, and it is a loan offered by the federal government, it is not a grant. It is a low-interest loan that is supplied during the pandemic.” The reporter is unable to locate or confirm any record of Aplus Karaoke applying to PPP or learn about the amount of money Aplus Karaoke received from the PPP program.
Savoy 16 + IMAX is located at 232 Burwash Ave, Savoy, Illinois. They did not apply to any grant programs during the pandemic. Phil J. Zacheretti, the President & CEO at Phoenix Theatres Entertainment LLC, which is the owner of Savoy 16 + IMAX, said, “Since the Savoy 16 + IMAX Theatre went through a change of ownership and was closed pre-pandemic, The Savoy was not eligible for the SVOG grant program from the SBA. We were unable to apply due to certain restrictions placed on the offerings.” According to its official website, the Shuttered Venue Operators Grant (SVOG) program was established by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, and amended by the American Rescue Plan Act. It includes over $16 billion in grants to shuttered venues and is administered by SBA.
Anita Purves Nature Center is located at 1505 N Broadway Ave, Urbana, Illinois. It is managed by the Urbana Park District which is a part of the local government. Savannah Donovan, the Environmental Program Manager mentioned that because they are affiliated with the local Urbana Park District, they do not have to worry about applying to grant programs.
Krannert Art Museum, located at 500 East Peabody Drive, Champaign, Illinois, is affiliated with the University of Illinois Urbana-Champaign. Because the Krannert Art Museum is not an independent entity having to earn its own revenue, it does not need to worry about grant programs. Their Assistant Director for Marketing & Communications, Julia Nucci Kelly, said, “The Illinois Arts Council made a special effort to recognize pandemic hardships and added a section about that to the proposal we submitted for annual operating support. We think that they overall did an outstanding job on responding to the pandemic and supporting arts institutions. Arts Alliance Illinois also has done an outstanding job in supporting arts institutions and artists, including by advocating on the state level. Finally, because the U of I is a state entity and Krannert Art Museum operates here on campus, it’s worth noting that the Chancellor explicitly let public engagement units know that we would not be responsible for cutting services during the pandemic. In fact, the campus poured new funding streams into our work, from which KAM benefitted: two grants called Broadening Inclusion + Arts CO+RE. And locally, Urbana Arts Council has given both in-kind support for Arts CO+RE.”
These two grant programs are provided by the University of Illinois Urbana-Champaign. According to their official websites, the Broadening Inclusion Grant is designed to encourage members of the campus community to think broadly about innovative ways to engage across disciplines and perspectives to create a more inclusive and just society. Arts CO+RE is an outgrowth of the CO+RE Program. It aims to extend the campus community’s interest in community-directed and -responsive practices for engaging local youth and adults in the generative and creative practice of the arts.
Another museum affiliated with the university is Spurlock Museum, located at 600 S Gregory, Urbana, Illinois. It is a unit of the College of Liberal Arts & Sciences. The Education and Publications Coordinator at Spurlock Museum, Beth Watkins, said that they did not apply to any grant program. “We are lucky to have so much support and guidance from the university, which is of course part of the state of Illinois. Not all cultural organizations are as well supported, and most of them can always use more help, even in the best of times. For example, many museums have laid off visitor-facing staff with no indication that those positions and services will ever be reinstated. Others have closed permanently.” said Beth Watkins.
Indeed, as Beth Watkins said, even with the support of various levels of governments, some businesses and organizations, including museums, have shut down permanently, unable to survive the relentless onslaught of the pandemic. Orpheum Children’s Science Museum, located at 346 N Neil Street, Champaign, Illinois, is a prime example. According to the FederalPay organization website, it had applied to PPP and received $19,700 on April 8, 2020. The Orpheum Children’s Science Museum spent $14,775 on payroll and $4,925 on rent. They retained five jobs during the duration of the loan. However, they still did not survive the COVID-19 pandemic and eventually shut down.
“Unfortunately, the efforts that have been made were not enough.” The announcement on their website read, “At this time, we will not be reopening the Orpheum Children’s Science Museum…The impact of this pandemic has regrettably been too great.”
