Costa Mesa throws $2M lifeline to restaurants and personal care businesses

To support local restaurants and personal care services, businesses hardest hit by the pandemic and stay-at-home orders, Costa Mesa is starting a small business bridge grant program that aims to help proprietors survive until new federal stimulus funds arrive.

City Council members recently approved taking $1.995 million from the declared disasters reserve fund to implement a three-phased assistance program for independent restaurateurs and the owners of local nail and hair salons and other by-appointment services.

Small businesses that previously qualified for and received relief grants through a city-run program this summer would be eligible to receive another $10,000 in the program’s first phase, while other operators with gross annual receipts under $2.5 million could apply for grants of up to $10,000 starting in January.

The details of a third phase, similar in structure to Phase 2, would depend on federal stimulus dollars coming to the city in early 2021. City officials will look into hiring a third party to administer the program with a portion of the funds.

Dan Inloes, Costa Mesa’s economic development administrator, told the council in a Dec. 15 meeting businesses have been hard-pressed to accommodate ever-changing pandemic restrictions, particularly restaurants and personal care services, whose customer base has been whittled away or completely shut out.

While a second Congress-approved $900-billion COVID-19 stimulus package — still in the works at the time the council approved the program but passed by lawmakers Sunday — may offer some relief, Inloes acknowledged Costa Mesa businesses need help now.

“Help is coming, but it’s not here, and that’s what this proposed bridge grant program is for,” he said. “It’s meant … to help them survive until additional support comes.”

About $1.1 million will be distributed in the coming weeks to some 110 local establishments that previously qualified for assistance. Those were independently owned, licensed brick-and-mortar businesses operating in good standing in Costa Mesa that had not already received federal coronavirus assistance.

Under the original proposal, an additional $800,000 of second-phase funding would be used to offer grants starting at $5,000 to another 160 businesses through an application and lottery process. In their deliberations, council members maintained the fund level but increased grant amounts to $10,000.

Phase 2 grantees would have to have at least one business officer residing in Orange County, fewer than 100 employees and operate a restaurant or personal care service with a city-issued business license active for six months as of June 1.

Eligible businesses would have to be legal and located in commercial or industrial spaces.

Franchisees would not qualify, Inloes said.

Recipients would also have to affirm they would follow all state and county reopening guidelines, including those mandating mask-wearing and social distancing.

Mayor Katrina Foley acknowledged many business owners who received assistance earlier this year would no longer qualify, due to their continued defiance of state health orders.

“I suspect, of the grants we issued in the first go-around, there will be many businesses that will not be eligible based on what is going on in the community,” Foley said. “I can think of six restaurants that will not be eligible because they will not comply with the governor’s orders.”

A handful of Costa Mesa restaurateurs and shop owners shared in public comments the dire straits they’ve experienced since a three-week stay-at-home order took effect Dec. 7.

“We continue to do the right thing, but we’re left in a position to where we’re feeling strained and somewhat helpless about how we’re going to survive into the new year,” said Old Vine Kitchen & Bar owner Mark McDonald. “We are in desperate need of a grant like this.”

Tim Taber, who owns Dick Church’s restaurant, said when Orange County moved last month back into the more restrictive purple reopening tier, sales went down 30%. When restaurants were forced to forego outdoor dining under the regional stay-at-home order, sales plummeted another 80%.

“This is a desperate time for many, many people in the restaurant and service industries,” Taber said. “We are running on fumes. We are running out of cash. And we are trying desperately to keep some people employed.”

Mayor Pro Tem Andrea Marr thanked city staff for pulling the program together so quickly.

“We all know businesses are going out of business, and we all know people are losing their jobs. So, whatever we can do as a city to try and stop that, to stem the tide, we should be doing,” she said.

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