Manhattan Beach City Council To Consider Loans To City Businesses

MANHATTAN BEACH, CA — The Manhattan Beach City Council will consider an "Emergency Business Loan Program to Assist Local Businesses During the COVID-19 Public Health Crisis," according to the online agenda for the Tuesday, Dec. 15 regularly scheduled meeting. The meeting marks Mayor Suzanne Hadley's first full meeting as mayor [she was voted in 5-0 at the previous council meeting], the final meeting for outgoing City Council member Nancy Hersman and the first meeting for newly elected Council member Joe Franklin.

The plan calls for $250,000 to be made available for funding business loans made by the city from its General Fund Reserves. Repayment of the loan and the start of interest accrual would begin within 100 days after the City’s affirmative declaration that the local emergency is no longer in effect with the stipulation that all loans must be repaid three years from that point, according to the agenda.

City staff has researched loan programs in place in other cities and staff recommends that the "COVID-19 Business Sustainability Program" in Manhattan Beach have three prioritized tier levels for qualifying for the loan. Tier 1 would go to "Independently owned businesses that were required by the government to close or significantly alter their business activity due to COVID-19."

City staff "is recommending a maximum loan amount of $10,000 to allow for up to 25 loans. Loans may only be used to cover the following items: payroll, lease or mortgage payments, and utilities and accounts payable for business premises. Loan recipients must use all loan funds to benefit businesses physically " in Manhattan Beach, according to the agenda.

The agenda item also states, "There is a legitimate municipal interest in expenditures and disbursements of public funds for public purposes, even if a private person incidentally benefits. Developing a loan program as described herein to support local businesses serves a public purpose and directly benefits the City of Manhattan Beach, its residents, and its taxpayers. Establishing the proposed loan program: (i) promotes the economic viability of local businesses financially impacted by the COVID-19 pandemic; (ii) reduces the risk that local jobs will be lost due to the COVID-19 pandemic; and (iii) reduces the risk that the City’s sales tax and other revenues will be further diminished due to the COVID-19 pandemic."

City staff anticipates that the loan program guidelines will be developed this month with a goal for accepted businesses to receive their loan distributions in January 2021.

Cities with similar loan programs already in place include West Covina, Fountain Valley and Long Beach. To find out how to make a public comment on any agenda item before or during the live meeting as well as to see the full agenda, visit this City of Manhattan Beach webpage. Details on how to watch or listen to the meeting are also on the same webpage. The meeting begins at 6 p.m.

This article originally appeared on the Manhattan Beach Patch