By the end of July, Atlanta businesses impacted by the two water main breaks that upended the city for days may see thousands of dollars from the city start to hit their bank accounts, officials said at a City Council committee meeting this week.
Mayor Andre Dickens announced last week the city would set up a $5 million fund to help the affected businesses. Among the losses: restaurants had to close on lucrative Friday and Saturday nights and the company that runs Ponce City Market’s popular rooftop food and attractions said it lost $200,000.
Johnny Martinez, owner of Joystick Gamebar on Edgewood Avenue, implored the council members to set up the fund quickly with a particular focus on small businesses. He said he would be late paying his rent because of his estimated $8,000 to $11,000 losses. Martinez spoke at the community development and human services committee meeting.
The fund is intended to help owners like Martinez recoup some of their losses, but the big question entrepreneurs wondered is: how? When the mayor announced the fund, details were slim. All that was known was the amount and that the fund would be managed by the city’s development agency, Invest Atlanta.
But on Tuesday, the agency’s CEO and President Eloisa Klementich told council members how Invest Atlanta plans to disperse the funds and prioritize small businesses who were impacted the longest.
Nearly 7,000 businesses were affected by the initial May 31 boil water advisory that covered a large swath of the city, Klementich said. But while repairs and water service were restored by June 3 to some parts of the city, the Midtown water main break left about 3,700 businesses under the boil water advisory until June 6.
The money is intended for losses not paid by insurance, Klementich noted at Wednesday’s finance committee meeting.
“We are also allowing that if potentially they lost $10,000, their insurance policy only covers $5,000 of it, they can still come to us to try and seek the other five” Councilman Alex Wan said Wednesday.
The amount of the grant will depend on a business’ revenue and how long they were impacted, according an Invest Atlanta presentation.
Those closed or impacted for one to three days and have:
— less than $500,000 in revenue will be eligible for about $2,000 in funding; four or more days, about $6,000;
— revenue of $500,000 to $1 million will be eligible for about $4,000 in funding; four or more days, about $8,000;
— revenue of more than $1 million will be eligible for about $5,000 in funding; four or more days, about $10,000.
“We had several conversations with small businesses and what they told us was that their loss per day was anywhere between $1,000 to $2,000,” Klementich said.
But not all businesses will be eligible. Nonprofits without for-profit activity, companies that derive some income from gambling, home-based businesses, pawnshops, liquor stores, corporate-owned franchises and nightclubs are among those that cannot receive grants, according to Klementich.
At Wednesday’s City Council finance committee meeting, Councilman Howard Shook said those restrictions seemed “kind of judgy,” but Klementich noted they are the same restrictions that Invest Atlanta has for its loans.
Klementich said if every business that was impacted applied for funding, the total cost would be about $10 million, almost twice what the city is budgeting. But Invest Atlanta estimates only about 40% of eligible businesses will apply, based on the turnout for pandemic relief funds. If that estimate holds true, it will cost the city about $4.5 million.
“We obviously won’t know until we get the applications in, but we feel pretty confident that statistically, we will be able to address ... probably upward of about 700 businesses with this plan,” she said.
On Tuesday, Councilman Matt Westmoreland floated a potential option for the council’s finance committee to increase the amount of the relief fund at Wednesday’s meeting, but did not give specific figures. Councilmember Liliana Bakhtiari raised that possibility again on Wednesday, but the committee did not amend the funding, instead opting to discuss it before the full council meeting Monday.
Atlanta’s Chief Financial Officer Mohamed Balla cautioned Wednesday that the $5 million is coming from the Department of Watershed Management budget and is funded by ratepayers.
“It’s not a limitless pot and you are impacting money that’s critical, that would be used for capital and operational needs of the utility as well,” Balla said.
Committee members voted in favor of the ordinance after Klementich detailed Invest Atlanta’s plan. The full council will vote on Monday, and if approved, Invest Atlanta will hold its first webinar for businesses that day, Klementich said. The agency will also set up a hotline for businesses to call.
The Invest Atlanta board plans to vote on the fund on June 20. Applications will be taken for two weeks, from June 24 to July 8. The agency would notify businesses if they receive a grant the week of July 29.
To apply, businesses will need to provide a point-of-sale report from the week before the water main breaks and then another from the impacted week. They will also need to submit an impact statement, their business license, a copy of their insurance policy and other documentation.
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