Mayor Steve Schewel and the Durham City Council are doing an outstanding job of keeping our community safe from the ravages of COVID and protecting our most vulnerable citizens. Now it’s time for them to take much swifter and bolder action to assure that our small, independent businesses will still be standing after Durham reopens and the crisis starts to subside.
Following the city council’s work session last Thursday, we have great concerns that the small business relief program proposed by the Office of Economic and Workforce Development and the funding approved for it by the city council will be too little, too late.
It was starkly clear after OEWD’s presentation that little data was utilized to develop the proposed loan program or determine the right level of investment. No data was shared about the value of Durham’s small businesses from a job or tax revenue standpoint. Nor were any metrics offered on the rate of COVID-related insolvencies or permanent closures among the city’s small business sector or what might be coming in the weeks and months ahead.
How can a relief program be devised without understanding the value of the sector taxpayers are being asked to invest in and its state of crisis?
In addition, the relief program presented had no specific funding amount requested or rationale for it. According to OEWD head Andre Pettigrew, as much as $5 million would be great. Yet after some discussion, the city council settled on only $1 million.
The town of Carrboro dedicated $500,000 to a relief program almost two months ago. Its annual budget is $58 million, while Durham’s is about $475 million. If Durham were to make a proportional investment, it would be $4 million.
It is entirely unclear if Durham’s yet to be finalized program and taxpayer investment in it will have any meaningful impact.
What’s more, there was no specific timeline presented to implement the program, aside from “hopefully at the start of the new fiscal year,” as Pettigrew said. That would be July sometime. While Raleigh, Charlotte, Apex, Garner, as well as Carrboro and other North Carolina cities stood up emergency small business aid programs several weeks or even months ago, it is now startlingly clear that Durham’s officials and municipal managers have been slow to recognize the importance of recovery for Durham’s small businesses, especially when it comes to safeguarding jobs and tax revenue.
As small businesses operate with slim margins, little cash reserves, and cannot carry the burden of more debt, the most important part of developing this relief fund is figuring out how to make it a forgivable loan or grant or a hybrid with a very low-interest, long-term loan. There is an opportunity to create a grant with the generous offer from Duke to match up to $1 million for a Durham small business recovery fund. A grant is especially important for our most vulnerable and historically disadvantaged businesses that we know our city council wants to support in the right way. But the level of due diligence and planning that was needed to create a hybrid program of this kind had not been done prior to the work session. If this occurred a month ago, we wouldn’t be as concerned, but with 50 percent of small businesses having less than seven days left of cash in the bank, time is not our friend.
It’s also critical that this fund support both our most vulnerable businesses that are revitalizing diverse commercial corridors across our city, as well as our more mature small businesses that generate a significant number of jobs and tax revenue for the city. It’s tough to imagine how a recovery fund capitalized with only $1 million in city funding could do this, and be worth the resources deployed to create and manage it.
Meanwhile, when asked a few weeks ago what Durham County’s plans were, county manager Wendell Davis said the county had no plans. On a town hall call a week later, county commissioner Jacobs said the county focuses its economic development efforts on RTP and Treyburn, not small businesses. Wake County has committed $5 million to recovery for its small businesses. Orange County had a program up nearly two months ago.
Before finalizing its 2020–21 budget, we hope our county commissioners will approve significant funding for Durham’s small business recovery effort and partner with the city on its program.
Our mayor and city leaders and managers have performed heroically to keep our community safe during this unprecedented crisis. We are very encouraged by conversations we have had with the mayor and some city council members since last week’s work session. But we must have a broader public dialogue on small business recovery and relief aid to get it right.
With the mayor and city council’s participation, we are holding a public forum on small business recovery this Friday at 11:00 a.m. The forum will be live-streamed on the city of Durham’s YouTube page and via Zoom Webinar (password: 141993, webinar ID: 936 5695 0330).
The authors are the founding members of the Durham Small Business Coalition. Ryan Hurley is the co-owner of Vert & Vogue, Nicole Oxendine is the owner of Empower Dance Studio, and Leonardo Williams is the co-owner of Zweli’s.
Comment on this op-ed at email@example.com.
DEAR READERS, WE NEED YOUR HELP NOW MORE THAN EVER. Support independent local journalism by joining the INDY Press Club today. Your contributions will keep our fearless watchdog reporting and essential arts and culture coverage viable in the Triangle, coronavirus be damned.