Holladay grant program bolsters small businessAug 11, 2021 11:59AM ● By Zak Sonntag
A new awning paid for with help from a grant program helps market and drive foot traffic to All the Raige Dog Salon. (Courtesy Treven)
By Zak Sonntag | [email protected]
Small business revenue in Utah has decreased by 34% since January 2020, when the coronavirus first began its menace in America, according to data from Opportunity Insights, an economic research thinktank. In the city of Holladay, many small businesses owners have felt this drop profoundly, because unlike large companies and corporate entities, mom-and-pop style businesses lack the capital to weather big downturns and face the real threat of going belly up.
Of course, businesses come and go, but local closures are often replaced by chain companies, and in a city like Holladay, where local institutions bestow a special sense of place, a shuttered business can feel like a personal loss for proprietors and patrons alike.
“When you look at the shops in our city it’s clear they each offer their own character. It’s a beautiful thing, and it brings a unique charm and value to our community,” said Arianna Mevs, owner of the local Dance Box Studio.
Vying to maintain that charm and stave off closures, the city’s leaders created the Small Business Grant program, which got $214,000 to local businesses throughout Holladay.
“This is our way to acknowledge the pain you’ve undergone and also a way to help our businesses transition through the pandemic,” said Mayor Robert Dahle during a March conference with local owners.
The program offered Holladay companies up to $5,000 reimbursement payments for investments in “marketing and long-term technological improvements.” The program was hatched partly in response to a pair of citywide business surveys, conducted in 2020 and 2021, which revealed that pandemic recession had thrown many local companies against the ropes. The surveys indicated that certain sectors were being hit especially hard—like retail, service, and restaurant industries—and showed that most operations were struggling to adjust to the new consumer paradigms of a lockdown environment.
“Like so many other businesses in the city, we were having trouble weathering the storm. The grant was a huge help and the timing was critical,” said Treven, owner of All the Raige Dog Salon in the Oakmont Plaza. “This grant helped us make investments and adjustments at a time when we were in the middle of a big location switch.”
The program was the brainchild of city leaders, but the grants roundabout underwriter was the federal government, whose CARES Act stimulus money flowed into Holladay coffers where it was used to finance big obligations, like fire and police, and thereby freed up the city’s general fund for other uses. The council moved quickly to put the windfall to use in juicing the local economy.
“There is no doubt that the grant will help us generate income,” said Mevs of Dance Box Studio, who used the money to fund, amongst marketing projects, video-graphic advertisements. “These photos and videos are especially effective because what we do is very experienced-based, so this lets us communicate that efficiently to potential clients.”
Some businesses might have liked to use the money on additional expenses, like rent or payroll, but the city decided to place parameters on the grant funding.
“A big reason for why we limited the use of the grant money to marketing and tech improvement is because those were the major problem areas identified in the small business survey. But we also know that this is a one-time source of funding, so you typically don’t want to spend one-time money for ongoing needs,” said LaNiece Davenport, the city’s economic development director who oversaw the program.
Surprisingly, however, the program’s popularity fell short of anticipation. The city budgeted half a million dollars for the program with the intention of getting assistance to up to 100 local companies. Yet overall approvals came to less than half that number with 44 companies participating.
“We had about 25 applications that were started but not completed, and about 12 people who applied but weren’t approved. Some businesses were not actually incorporated in the City of Holladay. Others didn’t have an active business license. And, in some cases, these companies could not demonstrate sufficient loss,” Davenport said. “There were some nuances that might have been awkward for applicants, but we tried to be as flexible as we could within the parameters. So we’re still surprised there wasn’t more participation.”
The city emphasized accessibility in the grant design, hoping to create a program with high impacts and not high barriers.
“We’re trying to make this as unbureaucratic as possible and find ways to get this money in the hands of businesses,” said Mayor Dahle during a conference call in March. “But if we get audited by the federal government, we’ll have to show that we had justification for how we ran the program and who we gave the money to and have some underlying paperwork. I assume we’ll fudge on the side of being lenient with how we distribute the money.”
The city reports positive feedback from participating businesses, and those who spoke with the City Journals described the process as user friendly.
“The permitting process was really easy. The city worked with us and walked us through it. We needed to show documentation of Covid-related revenue loss, and show viable proposals for marketing and tech investments. It was not difficult,” said Treven at All the Raige.
The city budgeted $500,000 for the small business grant program, but with the program concluded and only half that allocation spent, leaders had to decide where to put the remainder. The funds were unofficially earmarked for direct local stimulus. Although, because the money originates in the general fund, it’s technically untethered, a point raised at a June hearing by Councilmember Paul Fotheringham, who wanted to consider the windfall against the full scope of the city’s issues and suggested the money may result in a larger impact if put toward some of the municipality’s derelict infrastructure.
His points were acknowledged. But the council ultimately felt the appropriate use of the windfall dollars, by virtue of having been freed up by CARES money, should be the prerogative of direct stimulus to the local economy. So, the council decided to roll that money into the Holla Dollars program, set to begin this month, which will put cash-equivalent vouchers in the hands of Holladay residents to be spent at exclusively local businesses.
“This will allow us to get more Holla Dollars money to residents, which has the potential to help an even wider array of businesses,” Davenport said.
As to the success of the city’s first ever Small Business Grant program, it will take time to ascertain the full impact. Nonetheless, the prevailing sense amongst small business owners is that the program is a victory.
“This grant allowed me to invest in advertising that I otherwise couldn’t have afforded,” said Carrie Coppola, owner of Mudita Yoga in the Creekside shopping center, who used the grant money “up to the last penny.”
“I hoped for a bigger response from the advertising, but I’m still happy because people are starting to come back. I was in tears because I had quite a few people in class for the first time in a long time and it makes me hopeful that things will get better. After what we’ve been through this last year, I think yoga is what we need more than ever,” Coppola said.