Small businesses are the foundation of our community and what make our neighborhoods unique and vibrant. When the COVID-19 pandemic began, there was no playbook to guide our small businesses on how to remain open or survive. Nor was there a guide for how government could provide the necessary help to keep our small businesses afloat.
As the City, State, and Federal governments began rolling out resources, I knew I needed to shift my staff workloads to ensure that Peter, my Chief of Staff, was there to help small businesses navigate the resources available from all levels of government. While doing this work we found gaps that needed to be filled in these vital programs.
We collected input from small business associations and business owners across District 6 and compiled the identified gaps and solutions, into a letter addressed to our State and Federal delegation of elected leaders. Our letter was signed by the entire City Council on May 4th and sent to Congress ahead of the vote for the next round of COVID-19 relief.
I say, “our letter” because while my office organized the letter, the contents came from our small business community and residents of our District. Thank you to all those that helped make this possible. Specifically thank you to Amy, Raymond, Lara, Grace, and Haley of the Ballard Brewery District; Ian and Jeanie of Seattle Restaurants United; the Ballard Alliance, Brandi at the Fremont Chamber of Commerce; and Chris of the Phinney Neighborhood Association. This is the type of community collaboration I envisioned when I took office.
As your representative, I will continue to use my office to raise the voices of those in need of resources and sensible government solutions. I am thankful for the opportunity to have worked with such dedicated small business leaders and look forward to future collaborations.
My office continues to provide support to small businesses, nonprofits, and individuals who want assistance navigating COVID-19 relief resources. To date, we have assisted over 90 local individuals and institutions by:
- Helping them navigate city, state, and federal relief programs,
- Referring them to non-governmental resources such as pro bono legal services,
- Updating them on changing government regulations,
- Finding and addressing solutions from City departments, and
- Advising them on how to negotiate with landlords and other creditors.
We have achieved many successful outcomes with more success stories than this blog post has room for. Here are some highlights of our work:
- addo Restaurant in Ballard was having issues with ticketing from parking enforcement. We were able stop the ticketing by changing the parking enforcement rules to facilitate customer pickup for takeout orders
- Assisted the Fremont Arts Council with rent and utility relief due to the cancellation of their major income generating annual event, the Solstice Parade
- Advised a long-standing food service establishment in Phinney facing eviction and threats of rent increases by a landlord, getting them some additional time to find another location once the stay-at-home order is lifted
- Worked with the City of Seattle Arts & Culture Department to clarify the awarding of additional grant money to institutions like the National Nordic Museum in order to help them with budget planning for 2020-21
- Counseled and referred a restaurant owner in Fremont to resources for help with unemployment benefits for employees including undocumented workers
- Assisted a plumbing company in Ballard to quickly apply for City of Seattle and Small Business Administration relief programs at the outset of the crisis
- Helped a small fitness facility near Woodland Park Zoo avoid eviction under the City moratorium and negotiate a repayment plan
- Advised a small coffee brewing company on how to continue paying its employees full wages while navigating the Paycheck Protection Program application and requirements in order to receive a forgivable loan to stay open.
There are so many more stories: from helping a gentleman get his improperly towed car returned, to guiding a pet-sitting business on how to navigate City departments in order to address construction and driveway access issues. We continue to help District 6 residents every day. If you need assistance with anything during this crisis, please reach out to us at Dan.Strauss@Seattle.gov and Peter.Nguyen@Seattle.gov. We are here to help.
Here is the full text of the letter we sent to the State and Federal delegations:
Dear Senator Murray, Senator Cantwell, Representative Smith, Representative Jayapal, Governor Inslee, Attorney General Ferguson, Speaker Jinkins, and Majority Leader Billig:
We appreciate the leadership you have all demonstrated in steering our state and nation through the unprecedented crisis brought about by the outbreak of COVID-19. In response to the pandemic’s impact on local enterprises, the City of Seattle has bolstered our Small Business Stabilization Fund, provided tax and utility relief, prohibited rent increases for nonprofits and small businesses during the public health emergency, gave nonprofit and small business tenants a longer period of time to pay overdue rent and required their landlords to accept reasonable payment plans, and enhanced business constituent support services through the Mayor’s Office, all nine City Council Offices, and our various City departments.
However, based upon our daily conversations with local establishments throughout the City of Seattle, even in light of these measures, as well as various forms of state and federal support up to this point, the outlook for small businesses remains very bleak. As such, on behalf of these valued neighbors and constituents, we seek to highlight additional needs and measures that can be taken to save small businesses. These include:
- Support an extension of the current City of Seattle moratorium on commercial evictions to the either twelve (12) months or twice the length of the state of emergency (whichever is greater) and legislate appropriate repayment terms between landlords and tenants. For businesses, getting back on track financially will be a long haul. Many have ceased production/operations in the wake of the crisis and will not be able to open their doors and operate at full capacity as soon as the stay-at-home order is lifted. Additionally, many will have missed months where high levels of revenue are generated and placed in reserves for the slower season. Lastly, there is uncertainty around the appetite of the general public for gathering and how soon people will return to their previous level of spending. By extending the commercial eviction moratorium, we can enable more businesses to survive this crisis. In addition, we ask that a cap of five percent (5%) repayment per month is enacted for the first twelve (12) months following the crisis.
- Forbearance of business mortgage payments. Many small businesses are renters, and will be relying in the coming months on the generosity of their landlords in setting up rent reductions or abatements. If this happens, commercial property owners, some of whom are small landholders rather than large developers, may be left shouldering all of the burden of this crisis. Please use your political power to urge or mandate the banking sector and regulatory authorities to suspend commercial mortgage payments for at least twelve (12) months, so these landlords can then extend lenient terms to their renters. If the banks shoulder some of the burden, they make it possible for all of the partners in the chain — from the landowner, to the business renters, to the business vendors — to collectively put payments on hold while they all make it through to the other side of this crisis.
- Payroll credits to compensate workers for lost wages. Keep workers employed through payroll credits that compensate for lost wages due to COVID-19-related closures. Payroll credits will be made available to small business owners, demonstrating proven need, and their employees while their business operations are restricted or shut down. Maintaining employment through this mechanism will reduce the strain on unemployment insurance which is inundated with requests and offers insufficient assistance (at 60% compensation rates).
- Support a Paycheck Guarantee that covers 100% of wages for workers and ensures workers remain enrolled in employer-sponsored benefits including health care. Maintaining workers’ income will provide financial relief throughout the pandemic and speed up the economic recovery.
- Consistency and clarity in government messaging. When formal guidance or regulations are being issued, it would be helpful to have consistent, clear, and coordinated messaging from all levels of government. For example, business owners have expressed confusion regarding issues such as Full-time Equivalents vs. Employees and the definition of Bars & Restaurants, without mention of whether or not this includes Breweries and Tasting Rooms.
Procedural and Legal Guidance for Small Businesses Navigating Relief Programs
- Provide funding for technical assistance to all small businesses to help them navigate federal assistance programs.
- Provide non-English speaking small business owners and those without regular access to the internet with assistance in applying for relief programs to put them on an equal footing with their peers, consistent with Title VI of the Civil Rights Act of 1964 which prohibits discrimination on the basis of their race, color, and national origin in programs and activities receiving federal financial assistance. Given that, according to an April 22 CBS News report, upwards of 90% of businesses owned by people of color have been, or will likely be, shut out of the Paycheck Protection Program, this would ensure equitable access to government support programs for all Washington State businesses.
- Provide access to mediators who can help small businesses and landlords find a path to agreeable terms regarding repayment in the absence of a mortgage payment holiday for landlords provided by banks as suggested above (which is the optimal solution).
Ensure Equitable Access to Relief Programs/Funds
- Establish a grant program that better aligns with the needs of small businesses. Significant resources are needed for loans and grants that assist minority owned, businesses in underserved communities, and businesses that are underserved by the traditional banking system. Loans and grants should serve truly small businesses who have been left out of other programs and assistance.
- Processing of the Economic Injury Disaster Loan (EIDL) and Paycheck Protection Program (PPP) should be standardized so that all small business applicants have equitable access. The experience of applying for these two programs has varied widely from business to business and bank to bank. It has also been fraught with missteps, misinformation and brick walls.
- Ensure that smaller small businesses have equitable access to funding opportunities. The PPP funding was issued on a first-come first served basis, which favored larger banks and businesses that had more robust infrastructure for responding to the SBA’s instructions, and made it harder for small banks (and thus smaller businesses) to access funding. As written, the limited PPP funds are open to franchises and any corporation where the employees at any given location number fewer than five hundred (500). Restaurant and hotel chains with their own legal departments, tax advisors, and law firms on retainer enjoy an incredible and unfair advantage over our state’s small establishments.
- The PPP benefit has severe structural issues which must be remedied. Loan forgiveness under the PPP was set based upon payroll costs covered during the sixty (60) days after the loan origination. This fails to benefit businesses that are required to have their doors closed until the quarantine is lifted. It is preferable to have set-asides based on characteristics of the business rather than the lender characteristics in the future rounds of funding. The priority should be ensuring the program is structured to incentivize employees returning to work in fair, safe, and healthy workplaces.
- Provide direct grant stimulus to small businesses. The Federal government should consider a microbusiness or small business relief program along the lines of the individual $1,200 direct stimulus issued to individual taxpayers in order to infuse critical operating cash into struggling small businesses as soon as possible.
Long-Term Solutions Beyond the Immediate “Crisis” Period
- Fight for adequate testing and contact tracking capabilities so that our employees and patrons can remain as safe as possible as businesses gradually reopen and to ensure that a resurgence of cases does not lead to further shutdowns in the future, either after a too-early reopening or after a possible fall resurgence.
- Provide federal stimulus funds directly to Cities so that they can be utilized on forms of local small business support such as utility forbearance and extended or discounted repayment plans.
- Advocate for or require all business insurance carriers to include or offer a rider for pandemic coverage in their policies.
- Suspension of or decrease in federal taxes on small businesses for an extended period during and beyond the “crisis”.
- Institute a PPP-style loan forgiveness program supporting businesses when they are able to reopen their doors and return to full employment levels.
- Provide forbearance on commercial loans, on the basis of proven need, with requirement that landlords which receive such forbearance pass it on to their tenant who are making lease payments.
- Provide additional grants, loans, and deferments prioritized for small businesses which are not allowed to fully reopen as quickly or fully as others, because business restrictions are sure to continue during a step-by-step reopening process.
- Enact a tax credit for re-hiring laid-off or furloughed workers to encourage small businesses to re-invigorate their communities by putting people back to work. Each worker that is re-hired by a qualifying small business in 2020 would entitle that business to a $2,000 tax credit per re-hired employee on their 2020 or 2021 federal tax return.
- Increase production and distribution of Personal Protective Equipment (PPE) such that all small business employees may have the option to protect themselves.
Again, we are very appreciative of your leadership during this global pandemic, and look forward to continued dialogue with you on how we can collectively best be helpful to the small businesses which make the City of Seattle a vibrant and unique place to live and visit.