29A - SMALL BUSINESS INCENTIVE PROG

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Santa Ana Small Business Incentive Program December 2, 2013 Page 2 In July 2013, the Community Redevelopment and Housing Commission was given an overview of the Micro - Enterprise program. The general consensus from the Commission was that this program would be a valuable benefit to start -up businesses in the City and should be forwarded to City Council for approval. In August 2013, staff presented an overview of the proposed Micro - Enterprise Program, now named as the Santa Ana Small Business Incentive Program to the Finance, Economic Development and Technology Council Committee (Committee). Staff reviewed with the Committee the proposed $2,000 grant program for small business, the eligibility criteria for the small business to obtain the grant and the administration process. The Committee was in support of the proposed new business incentive program but had questioned whether the $2,000 grant would be enough to assist a start -up business. In October 2013, staff presented an update on the status of the Santa Ana Small Business Incentive Program to the Committee. Staff informed the Committee that more recent research indicated that City of Redlands has a higher grant program ($10,000). Based on an interview with their staff, it became evident that the administrative work and the required documentations from small businesses were complex and comprehensive. However, the grant amount has to be sizable to make it worthwhile for any small businesses to obtain such a grant. As a result of the new information, staff recommended an increase to the grant program from $2,000 to $5,000. The Committee was in support of the change. SUMMARY OF SANTA ANA SMALL BUSINESS INCENTIVE PROGRAM 1. Businesses are eligible for the program if they meet one of the criteria listed below: A. Income Qualifying — The business owner is determined to be low- income pursuant to HUD requirements; or B. Geographic Area Qualifying: 1) Community Service Area Map - The business is a new community - serving retail or service -based business and located in the designated area (Exhibit 1 - Map A); or 2) Targeted Resident Area Map - The business owner or an employee lives in a designated area where 70% of households are low- income (Exhibit 1 - Map B); or 3) Targeted Business Area Map - The business is located in a designated area where 20% or more of the families are below the poverty level (Exhibit 1 - Map C); 2. Reimburse business start -up costs of up to $5,000. Approximately up to 56 new businesses could be assisted in the City. Expenses such as rent, insurance costs, utility connections, advertising, working capital, supplies, fixtures, furniture, equipment, or working materials could be reimbursed to businesses under this program. According to CDBG guidelines, reimbursement for this type of grant must be incurred within the first year of operation, with the new business creating a minimum of one job during its start -up phase. After initial review by Community Development staff, the City's Executive Director for Community Development will approve the final application and forward to the Finance department for audit and request for disbursement of funds. 29A -2