Title
Resolution of Council of the City of Hampton, Virginia Providing for Certain Relief for Small, Independent, Hampton-Owned Businesses Financially Impacted by COVID-19
Purpose
PURPOSE/BACKGROUND:
On March 12, 2020, Governor Ralph S. Northam issued Executive Order Fifty-One (51) declaring a state of emergency for the Commonwealth of Virginia arising from the novel coronavirus (COVID-19) pandemic. Executive Order Fifty-One (51) acknowledged the existence of a disaster as defined by Virginia Code Section 44-146.16 arising from the public health threat presented by a communicable disease anticipated to spread. Executive Order Fifty-One (51) ordered implementation of the Commonwealth of Virginia Emergency Operations Plan, activation of the Virginia Emergency Operations Center to provide assistance to local governments, and authorization for executive branch agencies to waive “any state requirement or regulation” as appropriate.
On March 13, 2020, the Governor further ordered all K-12 schools in the Commonwealth closed for two weeks. And, on March 17, 2020, along with the Virginia State Health Commissioner, issued an Order of the Governor and State Health Commissioner Declaration of Public Health Emergency (later amended) limiting the number of patrons in restaurants, fitness centers, and theaters to no more than 10 per establishment.
Quickly seeing those measures would not suffice to sufficiently limit the rapid spread of COVID-19, on March 23, 2020 the Governor issued Executive Order Fifty-Three (53), which (i) prohibits all public and private in person gatherings of 10 or more; (ii) ceased all in-person instruction for K-12 for the remainder of the 2019-2020 school year; (iii) closed all dining and congregation areas in restaurants, dining establishments, food courts, breweries, microbreweries, distilleries, wineries, tasting rooms, and farmers markets effective through April 23, 2020; (iv) closed all public access to certain recreational and entertainment businesses until April 23, 2020; and (v) authorized only certain retail businesses deemed essential to remain open during normal business hours. In furtherance of that order, on March 30, 2020, the Governor issued a temporary stay at home order, effective until June 10, 2020.
In recognition of the financial stress this disaster is imposing directly on many of Hampton’s small, independently owned the businesses, the City Council of the City of Hampton authorizes the Economic Development Authority of the City of Hampton, Virginia (the “EDA”) to establish a forgivable loan program (subject to certain terms and conditions) to assist those businesses. For this purpose City Council will authorize the redirection and use for this disaster relief up to $500,000 of funds previously appropriated to the EDA for the purpose of awarding discretionary economic development grants (the original intent of which was to stimulate economic activity by providing to companies and/or other organizations where the primary outcome is job growth or capital investment).
In furtherance of this initiative, and to ensure the best use of those limited funds, City Council asks that the EDA use the following general parameters in the development of this disaster relief loan application and program:
• Qualified applicants shall be only small, independently-owned businesses with (i) one or more physical locations in the City; (ii) with demonstrated financial loss directly related to COVID-19; and (iii) have applied for federal relief through the Small Business Administration Loan (if eligible and able), and has determined the relief available under that federal program will not sufficiently sustain the applicant’s viability as an on-going business concern. For this purpose, a small business shall be a business with average annual gross receipts of $1,000,000 or less;
• Loan awards shall be capped at $10,000 per applicant, with reasonable repayment terms commensurate with the disaster and reasonable recovery therefrom;
• Each loan awarded may be wholly forgiven if the awardee is current on all taxes and fees owed to the City on and due through August 1, 2020. Any portion of a loan used to pay any delinquent taxes owed by a business shall not be forgiven and must be repaid with interest to the EDA by the business over a 12-month period; and
• Taxpayers granted an extension of the due date for the City’s real and/or personal property taxes due on June 5, 2020 shall not be eligible for relief through the EDA.
Discussion:
See Purpose/Background above.
Impact:
See Purpose/Background above.
Recommendation:
Rec
Staff recommends approval.
Body
WHEREAS, on January 31, 2020, the United States Health and Human Services Secretary declared a public health emergency for the entire United States to aid the healthcare community in responding to COVID-19;
WHEREAS, on March 11, 2020, the World Health Organization declared the COVID-19 outbreak a pandemic;
WHEREAS, on March 12, 2020, Governor Ralph Northam declared a state of emergency in the Commonwealth of Virginia in response to the continued spread of COVID-19, and declared the anticipated effects of COVID-19 to be a disaster as described in Section 44-146.16 of the Code of Virginia, 1950, as amended;
WHEREAS, on March 15, 2020, Governor Northam announced a ban on all gatherings of one hundred or more people statewide, and a ban on gatherings of fifty people or more within the Peninsula Health District;
WHEREAS, on March 16, 2020, President Donald Trump urged people to avoid gathering in groups of more than ten people;
WHEREAS, on March 17, 2020, in an effort to increase social distancing to inhibit the spread of the virus, Governor Northam and the State Health Commissioner announced that all restaurants, fitness centers, theatres are mandated to significantly reduce seating capacity to ten patrons or close, and the Governor’s public announcement stated that the Commonwealth will follow the federal guidelines for gatherings of ten or more people;
WHEREAS, on March 23, 2020 the Governor issued Executive Order Fifty-Three (53), which (i) prohibits all public and private in person gatherings of 10 or more; (ii) ceased all in-person instruction for K-12 for the remainder of the 2019-2020 school year; (iii) closed all dining and congregation areas in restaurants, dining establishments, food courts, breweries, microbreweries, distilleries, wineries, tasting rooms, and farmers markets effective through April 23, 2020; (iv) closed all public access to certain recreational and entertainment businesses until April 23, 2020; and (v) authorized only certain retail businesses deemed essential to remain open during normal business hours;
WHEREAS, there have been confirmed cases of COVID-19 in the City of Hampton;
WHEREAS, the Council understands and acknowledges the financial stress and strain this disaster is imposing directly on many of the City’s small, independently-owned businesses;
WHEREAS, the purposes of the Economic Development Authority of the City of Hampton, Virginia (the “EDA”) include promoting economic stability and attracting and retaining businesses;
WHEREAS, in an effort to alleviate some of that financial stress and strain on those small, independently-owned Hampton businesses, City Council desires to authorize the redirection and use for that disaster relief up to $500,000 of funds previously appropriated to the EDA for the purpose of grants that would stimulate job growth and capital investment; and
WHEREAS, to maximize the impact and benefits of this disaster relief, the City Council also desires to provide the EDA with certain parameters to be used when awarding those disaster relief loans.
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of Hampton, Virginia that:
1. The Economic Development Authority of the City of Hampton, Virginia (the “EDA”) is authorized and directed to use up to $500,000 of funds previously appropriated to the EDA for the purpose of grants that would have stimulated job growth and capital investment to fund a disaster relief loan program for small, independently-owned Hampton businesses.
2. To maximize the impact of those funds, the EDA is further directed to use the following parameters in its development and administration of this disaster relief loan program:
a. Qualified applicants shall be only small, independently owned businesses with (i) one or more physical locations in the City; (ii) with demonstrated financial loss directly related to COVID-19; and (iii) have applied for federal relief through the Small Business Administration Loan (if eligible and able), and has determined the relief available under that federal program will not sufficiently sustain the applicant’s viability as an on-going business concern. For this purpose, a small business shall be a business with average annual gross receipts of $1,000,000 or less;
b. Loan awards shall be capped at $10,000 per applicant, with reasonable repayment terms commensurate with the disaster and reasonable recovery therefrom;
c. Each loan awarded may be wholly forgiven if the awardee is current on all taxes and fees owed to the City on and due through August 1, 2020. Any portion of a loan used to pay any delinquent taxes owed by a business shall not be forgiven and must be repaid with interest to the EDA by the business over a 12-month period; and
d. Taxpayers granted an extension of the due date for the City’s real and/or personal property taxes due on June 5, 2020 shall not be eligible for relief through the EDA.