La Mesa City Councilwoman Laura Lothian would like to target $2 million dollars of the city’s American Rescue Plan Act funds for local businesses in the form of 400 grants worth $5,000 apiece.
However, the only ARPA funding currently slated for business development in La Mesa is being steered toward the newly developed La Mesa Entrepreneurship Accelerator program run in partnership with the East County Economic Development Council.
Assistant La Mesa City Manager Carlo Tomaino described the accelerator as “a startup program designed to encourage new businesses to open in La Mesa” or help an existing business owner if they wish to expand to a second location or open another business.
The accelerator program is slated for activity from June 2022 through December 2026 and will be available to all San Diego residents, but specifically marketed to women and minorities. Under the LEAP program, each entrepreneur would receive individualized advising sessions, an accountable case management system, and up to $20,000 in grant funds. Ostensibly, participants would rent business space in La Mesa which, according to program materials, would “help reduce City of La Mesa’s 5.5% vacancy rate, generate additional sales tax revenue, create jobs and opportunities within the community, and facilitate the local economy’s resurgence following the COVID-19 pandemic.”
La Mesa City Council recently approved $800,000 in funding toward the initiative.
According to LEAP information, “providing a robust program for entrepreneurs to develop new businesses in La Mesa will directly reduce the region’s 5.7% unemployment level, reduce the 5.5% commercial vacancy rate, increase sales tax numbers and support new businesses” in an effort to stimulate the local economy.
However, the program, which focuses on new businesses, would not directly benefit existing business owners who are not in the market to expand.
Because two years’ worth of income was affected by the pandemic, Lothian said, many existing business owners do not have money for equipment, repairs, replenishing inventory, restoration, or remodeling and a $5,000 grant could help keep established businesses afloat, a different approach than the LEAP program which is designed to benefit new ventures while filling empty business space.
Since then, Lothian said, many business owners have shared their business experience through the pandemic with her, most of whom said they struggled to remain in business. The councilwoman is circulating a survey through La Mesa Chamber of Commerce to gather data on whether providing local business owners with ARPA funding could help them recover from the economic impact of COVID-19.
She said she plans to share the survey results with Vice Mayor Jack Shu, who co-chairs the Ad Hoc Committee which oversees COVID-19 funding along with Lothian, as well as La Mesa city staff, Mayor Mark Arapostathis and fellow Councilmembers Bill Baber and Colin Parent.
The survey is designed to provide data rather than rely on anecdotal information.
“One restaurant owner showed me her bank statement from January 2021. She had $1,100 in her business checking account and some $30,000 in outstanding invoices. She was terrified of losing everything. I interviewed La Mesa business owners who could really use ARPA funds to restore lost business,” Lothian said.
Funding existing small businesses would benefit all of La Mesa, Lothian said.
“La Mesa’s small businesses are major employers and the engine driving our local economy. If, for example, a restaurateur builds a permanent parklet with ARPA Funds, they will serve more customers, increase their income, hire more workers, order more product and help food suppliers, and raise La Mesa’s coffers through property and sales taxes,” Lothian said.
Although Chamber CEO Mary England said the City of La Mesa and the Chamber are not working together on Lothian’s survey, she believes the funding Lothian wants to secure would help existing local businesses.
“The funding can definitely help local businesses: they can purchase new tables and chairs if they run a restaurant, buy appliances or computers, retail shops can increase their inventory to a level playing field with regional stores, owners can upgrade their facilities to make them more competitive for consumers, invest in marketing their business to consumers,” England said.
There are “so many ways they can use any type of funding” England said, yet the city has not created a process by which local business owners could directly apply for ARPA funding.
“The process should be fair and equitable for everyone that wishes to request these funds. The American Rescue Plan was put into play by the President in 2021 by allocating $350 billion to states, counties, cities and tribal governments to assist with economic recovery efforts and provide emergency relief in direct response to the pandemic,” England said.
Tomaino said the city “previously provided approximately $750,000 in emergency business grants of up to $5,000” through California state COVID-19 relief funds received prior to the 2021 federal ARPA allocation.
Any additional proposed ARPA funding for businesses is subject to a formal recommendation from the City Council ARPA Ad-Hoc Subcommittee to the entire City Council.
