Reading City Council members call for fair process to distribute ARPA funds to small businesses

Dec. 16—Some City Council members are calling for a fair process before American Rescue Plan Act funds can be aimed at a proposed produce distribution center and other small businesses.

With more than $5 million in ARPA funds already distributed to city nonprofits and $2 million allocated to each of the city's three institutions of higher learning, council is turning its attention to small-business owners.

"I've been an advocate since Day One that we have ARPA dollars allocated (that) we do not forget our small businesses because they're pouring into our revenue base," Council President Johanny Cepeda-Freytiz said at a recent meeting.

Cepeda-Freytiz, a state representative-elect and partner in a downtown restaurant, has been calling for ARPA aid for small businesses for several months.

The topic was brought to the forefront at recent council meetings after the developers of a Super Natural & Fresh Produce at North Fourth and Elm streets asked the city and county each for $750,000 in ARPA funds.

Local businessman Leopoldo Sanchez and partners say development of the 40,000-square-foot building — formerly the city's vehicle maintenance garage — as a retail and wholesale grocery outlet and tortilla factory cannot proceed without an additional $1.5 million.

"This is an emergency," said Daniel Betancourt, president and CEO of Community First Fund, the nonprofit lender financing the project. "We have a project that cannot close."

Betancourt and other stakeholders advocated for ARPA funding Monday at council's committee of the whole meeting.

While none of the council members said they oppose the request, some said handing over money to support the produce business without an application process would be unfair to other small businesses.

"There is no process at this point to be fair to all other city businesses." Councilwoman Donna Reed said. "Why should we look at this as a separate and apart project?"

Councilwoman Marcia Goodman-Hinnershitz also called for an application process, noting the city could establish a process similar to that used by city nonprofits for ARPA funding requests.

But developers of the produce business say they are running out of time and need funding now to continue construction. All other opportunities for funding have been exhausted, Bettancourt said, and the project cannot support additional debt.

What was estimated in 2021 as a $6.4 million project, he said, escalated due to unforeseen infrastructure costs and inflation.

"There's some relations here to what happened with the pandemic," Betancourt said. "And we think that this lines up really well with, you know, the pandemic and the federal relief through ARPA."

The city received more than $61 million in ARPA funds, which, among other things, can be used to address the negative economic impacts caused by the COVID-19 public health emergency.

Speaking through an interpreter, Sanchez said he came to Reading 24 years ago because he saw the city as a place of opportunities. He started with a corner grocery and now owns Super Natural & Fresh Produce store at 1350 N. 12th St. and another one in Scranton.

The Fourth Street location would be his third.

Sanchez said he is happy to be a part of the city's success story.

"I'm very excited to keep moving forward," he said, "and every day it makes me more and more happy to see the city come to a success."

Although the North Fourth Street location is expected to create 120 jobs, Bettancourt said, it meets the criteria for a small business as defined by the U.S. Small Business Administration.

No decision has been made regarding the request.