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HomeMy WebLinkAbout1P CITY COUNCIL STAFF REPORT DATE: January 13, 2022 CONSENT CALENDAR SUBJECT: CONSIDERATION OF WAIVERS OR REIMBURSEMENTS OF BUSINESS LICENSE AND VILLAGEFEST FEES FOR PALM SPRINGS MADE BUSINESS STARTUP PROGRAM PARTICIPANTS FROM: Justin Clifton, City Manager BY: Community & Economic Development Department SUMMARY: The Coachella Valley Small Business Development Center (SBDC) operates programs in partnership with lending institutions and government entities to assist entrepreneurs with starting businesses and has requested to work with the City of Palm Springs to operate such a program, called Palm Springs Made (Program). The Program provides entrepreneurs with four classes on starting a business, assistance with setting up the actual businesses and helping them through proof of concept where the program participants make actual sales. SBDC also partners with Sun Community Federal Credit Union, located in Palm Springs, which will provide a $250 grant to Program participants and help them improve their credit scores. SBDC is requesting the City of Palm Springs provide a matching grant of $250 for Program participants and waive or reimburse the participant’s business license and VillageFest fees as applicable. RECOMMENDATION 1)Approve the waiver or reimbursement of Business License and VillageFest fees as applicable for Palm Springs Made Business Startup Program Participants. 2) Appropriate $7,500 to provide a $250 matching grant for approximately 30 Palm Springs Made Business Startup Program Participants. 3)Authorize the City Manager to execute all necessary documents BACKGROUND According to the Economic Innovation Group, a Washington research organization, regarding business startups “The pandemic forced a big realignment that would never have been seen otherwise.” In addition, according to the United States Census Bureau, Americans filed paperwork to start 4.3 million businesses last year, a 24 percent increase from the year before and applications are on a pace to be even higher this Item 1P - 1 year. This wave of entrepreneurial activity provides a potential source of job growth, innovation, and economic resiliency. This is particularly important for California which, according to the UC Berkeley Labor Center, experienced massive job losses compared to the nation as a whole and is still a long way from fully recovering. As individuals suffer job losses, reduced hours, and income, some began pursuing entrepreneurial ventures. Examples of such cases are below: •Songlorious – Omayya Atout and Ellen Hodges were aspiring musicians in New York, with day jobs. Ms. Hodges was working as a barista in a Manhattan coffee shop and Mr. Atout had a job as a civil engineer at Amtrak. When the pandemic hit, the coffee shop sent workers home, and Mr. Atout’s salary was cut. They set up a website and opened a business, Songlorious, writing custom songs for weddings, birthdays and similar events. Within weeks, they had more business than they could handle and began hiring other musicians to help out. Mr. Atout quit his railroad job to work on the venture full time. •QuickHire – QuickHire is a career discovery platform for the service economy workforce started by Deborah Gladney and her sister Angela Muhwezi-Hall in Wichita Kansas during the pandemic. In this case, the pandemic provided a business opportunity as companies were struggling to find workers. QuickHire partners with job seekers to find career fulfillment by finding the right job and advancement opportunities. Gladney and Muhwezi-Hall are believed to be the first Black women entrepreneurs in Kansas to raise $1 million in seed funding. To assist entrepreneurs with navigating the process of starting a business, and access other business assistance resources, the SBDC has launched programs to train aspiring entrepreneurs in starting their businesses and would like to start a new program in the City of Palm Springs. STAFF ANALYSIS The proposed Program is four-week program that aims to assist start-up businesses with entering the marketplace to validate their concept and catalyze growth. Over this four-week period, participants will create their business, build their Palm Springs MADE Marketplace vending booth and create a successful e-commerce website. Participants will learn about planning, marketing, financing, management and best practices in business and sales. This quick-paced program will accelerate their business concepts in just a few weeks and give participants the opportunity to make their micro- entrepreneurship business dreams a reality. There is no cost to participate in this program and participants will have the opportunity to meet one-on-one with a SBDC consultant. Participants will attend a four-week program that meets one-time each week for two hours. Training topics include: Item 1P - 2 •Developing Your Business •Market Booths and Branding •Financials and Online Presence •Marketing and Marketplace Logistics •Make the first sale Business startup costs can range from $650 and above for fictitious business names, City fees, permits, and insurance. Annual vendor fees can start from $2,200. The Program would help offset these costs, while still requiring the entrepreneurs to invest their own resources. The SBDC consultants will also help the entrepreneurs avoid potential pitfalls. As proposed, the City of Palm Springs’ participation would include waiving or reimbursing City Business License and VillageFest fees as applicable and provide a match of $250 for approximately 30 Palm Springs Made Business Startup Program Participants. Sun Community Federal Credit Union will also provide a $250 grant to Program participants, waive bank fees for new accounts, and counsel participants on improving their credit scores. The Program would be free of charge to participants. SBDC has had success with this program in the Cities of Orange and Coachella. OC MADE was launched in cooperation with the Orange County Swap Meet and has graduated 150 businesses in four cohorts. The City of Coachella used CDBG money to match grants from Rabo Bank to help start businesses. FISCAL IMPACT: Approval of this action would require the appropriation of $7,500 from the Economic Development Budget to provide a $250 matching grant for approximately 30 Palm Springs Made Business Startup Program Participants. Business License fees for home occupation businesses are approximately $133 per business. If 30 businesses participate, a total of $3,990 for business license fees would be waived or reimbursed. Without knowing what types of businesses will participate, it is difficult to determine vendor fee reimbursement or waivers for VillageFest; however, it is estimated this amount would be approximately $15,000. REVIEWED BY: Department Director: Jay Virata City Manager: Justin Clifton Item 1P - 3