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Kent County business leaders are working with county officials on a $5 million grant program to help small businesses and the hospitality sector. | PHOTO COURTESY UNSPLASHED[/caption]
DOVER — Kent County officials are working on a proposal that would use $5 million of federal funding to establish a grant program for local businesses still struggling from the financial fallout of the COVID-19 pandemic.
The program will set aside $3 million for small businesses and another $2 million for the hospitality sector that can demonstrate a financial loss. Grants will range between $50,000 to $100,000, with amounts capped depending on the size of the business and the percentage of loss demonstrated. It would be open for three rounds of funding, and selection would be dependent on whether a business had received other financial relief.
“While some businesses may have recovered at this point, some that suffered a loss may still be struggling with back bills and face challenges in rehiring,” Kent County Administrator Michael Petit De Mange told the Delaware Business Times. “You see businesses struggle to hire, running on shorter hours because of it, and some that are struggling to buy the equipment they need … businesses have made the call, and we will answer.”
The grant program proposal, which is being workshopped with Kent County Finance Department, may be presented to the Levy Court on Nov. 9.
As part of the $1.9 trillion America Rescue Plan Act (ARPA) signed by President Joe Biden in March, Delaware received $1 billion to spend for COVID-19 response and investments to spur economic growth in the wake of the pandemic. Kent County will see roughly $35.5 million, with about half already received.
None of the ARPA funds has been spent yet, Petit De Mange said. The small business grant program would account for 28% of the $17.5 million accounted for in the county’s coffers, if approved by the Levy Court.
Central Delaware Chamber of Commerce (CDCC) President Judy Diogo and Kent County Tourism Executive Director Pete Bradley proposed the program to Kent County officials earlier this month as a way to lift up the small businesses in the state’s smallest county. Both leaders put together task forces with hoteliers, restaurateurs and other shop owners to discuss the best way the county government could support them through a financial recovery.
“The businesses we see that are struggling haven’t been struggling for years. They’ve been struggling because there is an exact incident that has happened to them and the owners have gone through their personal savings and the PPP and we are still here,” Diogo told the county administration subcommittee on Oct. 5.
It has been a hard 20 months for Kent County businesses, according to the data presented to county officials. State accommodation tax for Kent County’s 30 hotels was down 42% from March 2020 to March 2021. Bradley estimated that Kent County provided $2.6 million in hotel tax, $1.5 million less than the previous year. The hospitality industry was also getting hit hard by the staffing shortage, as it had a direct impact on room inventory, Bradley pointed out.
“We have major hotels that just can’t turn the rooms so the room occupancy stays artificially low, and that impacts accounting and staffing,” Bradley told county officials. “For example, we have a 500-room hotel that has 150 rooms during the week.”
The CDCC lost 53 members because their businesses closed for good between April 2020 and July 2021, Diogo noted. Many others may be struggling to pay the electric bill or for key vendors. With cold weather on the horizon, outdoor dining and other events that draw people to destinations will be on the downswing once more.
The proposed program would be limited to businesses with 100 employees or less. That would account for 633 businesses that are registered with the chamber, Diogo said.
The grant program would likely create four categories of size for this aspect of the program. and allocations would be dependent on the percent of income lost between the last two years, Petit De Mange told DBT. For example, a business that has lost 50% of its revenue may see a higher grant award than one that can demonstrate a 10% loss of revenue. The program details have not yet been finalized.
Diogo stressed that this program would be geared to getting businesses “over the hump” and to next spring, when she hopes the pandemic will be fading from memory.
“That’s all our hope. Nobody has a crystal ball, but we’re all hoping for it,” she said. “But we want to give them the opportunity to get there.”
