$3M in local small business loans could start flowing Friday in Juneau

Juneau Assembly Chambers on July 30, 2015. (Photo by Jeremy Hsieh/KTOO)

Update (April 3, 5:43 p.m.) — Jeremy Hsieh, KTOO

A website went live at 5 p.m. Thursday to take in applications for small business relief loans in Juneau. By midday Friday, dozens of completed applications had come in for the publicly financed program. (Read more)

Original story

Small businesses in Juneau could have emergency cash headed into their accounts as soon as Friday.

The Juneau Assembly approved an emergency measure Wednesday night to make up to $3 million of public money available as low- or no-interest loans to qualified businesses.

Over two nights this week, the Assembly presented, debated and approved the resolution that establishes and funds the program.

Public health mandates to combat the spread of COVID-19 have frozen a lot of economic activity. The loan program is intended to help small businesses get by until federal and state relief is available.

Assembly member Wade Bryson is a business owner. He framed it as an obligation. Specifically, because the Assembly shuttered many local businesses to combat the pandemic.

“I understand that some businesses won’t use this help. Debt is bad. Business owners don’t like debt. We are now giving them a tool to help them in the form of debt, which is not universally liked. … But here we are, we have to solve this. ”

The Assembly’s debate Wednesday centered on tradeoffs between getting the money out to the community quickly, oversight and unforeseen expenses the money could be spent on.

Assembly member Maria Gladziszewski tried to amend the program so the $3 million wouldn’t be released all at once. She wanted to build in what she called some “minimal oversight” from the Assembly.

“OK, the state of Utah — not a city in Utah, but the state — is considering doing loans of ($5,000 to $20,000). And here we are way early, and I commend us for moving quickly, but we’re talking about giving loans in a city of Juneau from ($25,000 to $50,000).”

Mayor Beth Weldon got the last word.

“I appreciate where everyone’s coming from, but quite honestly, there are two businesspeople in this room. While everyone else was doing whatever their — the usual whatever they did today, I did payroll,” she said, choking up. “And paid bills. And hoped I had enough money in the bank to make it. So by delaying this with this amendment, you’ve taken the legs out from under it. So with that being said, madame clerk, call roll.”

Gladziszewki’s amendment failed. The overall measure passed unanimously.

Today, the city wired its $3 million to the Juneau Economic Development Council, which is administering the loans. JEDC Executive Director Brian Holst said a dry run for the web-based application process happened this afternoon. If it goes well, he said applications and money could start flowing as early as Friday.

The application and particulars of the loan conditions will be at JEDC.org.

The loan program will add a $3 million expense to the city’s annual budgeting process, which is filled with unknowns.

“We don’t know the effect of COVID to our economy,” City Manager Rorie Watt told the Assembly. “We don’t know how much we’re going to end up spending. We don’t know if the governor’s going to sign the budget with or without veto. We don’t know if the federal aid, the one and a quarter billion (dollars) or so to the state, is going to make it our way.”

Watt said he did recommend, at least as a starting point for budget deliberations, a significant property tax increase to balance the budget. He proposed an increase of one mill, which works out to $100 more per $100,000 of assessed property value.

The city’s budget must be complete before the new fiscal year begins in July.

Correction: The nonprofit administering the loans was misidentified in an earlier version of this story. JEDC is short for Juneau Economic Development Council, not Corp.

 

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