Iowa City businesses awarded financial aid nearly one year into pandemic

Through pandemic relief grants and gift card incentive programs, small, local businesses in Iowa City have been given opportunities to receive financial aid amid a time of economic difficulty brought by COVID-19.

Claire Benson, News Reporter

As Iowa City nears the one-year mark of dealing with COVID-19, small, local businesses are still struggling financially, prompting them to apply for and in some cases receive financial aid through pandemic relief grants.

Through CARES Act funding and the Community Development Block Grant Assistance, the City of Iowa City was able to award over $360,400 to 27 eligible small businesses in Iowa City, all who have faced financial hardships because of COVID-19 imposing restrictions and limitations on their business operations.

“The city had the option of how they were going to use it and had to basically respond to the pandemic in some way to alleviate poverty, to help businesses,” Iowa City Neighborhood and Development Services Director Tracy Hightshoe said. “So, the city allocated the money for small business assistance relief, and it was prioritized for those businesses who haven’t gotten aid.”

Hightshoe said the priority requirements for small businesses applying to receive this grant funding included how severely COVID-19 had financially impacted the business, if these businesses had received any previous state or federal financial aid, and if the business was owned by a woman or person of color.

Along with these staple requirements, Hightshoe said these applicable businesses had to have less than $1,000,000 in annual gross revenue, less than 25 employees, and be located in Iowa City, regardless if the business is a local franchise or single location.

Hightshoe said from the two rounds of CARES Act funding the city has received, 60 percent of the funding has gone to direct aid for rent or utility assistance for citizens who might be at risk of eviction.The other 40 percent was prioritized to go towards nonprofit agencies that provide homeless services, childcare, mental health services, and food distribution, Hightshoe said.

“Our first two rounds of funding are going to nonprofits for rent assistance [and other services], and then this pot of money, we dedicated to small business assistance,” she said.

Hightshoe said approximately 60 businesses were eligible to be reviewed to receive this funding Out of the 27 selected, businesses that had at most 25 employees received $10,000 in grant funding, she said, and businesses with no employees were eligible to receive $15,000.

In addition to the city aiding local businesses, the Iowa City Downtown District organization has introduced several gift card incentive programs to encourage community members to support downtown businesses, the most recent program explicitly targeting downtown restaurants during the month of February.

Iowa City Downtown District Director of Operations Betsy Potter said for every $100 spent at downtown restaurants, community members will receive a $20 gift card to use at any downtown restaurant.

With this, Potter said $5 will also be donated to local food distribution organization Table to Table to help combat food insecurity in Iowa City.

With the downtown district’s board of directors approving this budget spending, Potter said the organization was able to use its own finances to support this initiative.

“I think it’s also important to note that February is one of the toughest months for restaurants, any year, because it’s colder. It’s a short month,” Potter said. “We’re coming off the holidays, and January and February are traditionally always just a challenging time for our restaurants. Supporting local businesses now is really important to make sure that they’re there this spring or summer when you want to come back out.”

Downtown restaurant Crepes De Luxe Owner Hicham Chehouani said his restaurant has faced many financial difficulties since March, with sales exponentially decreasing, leaving him worried about the restaurant’s financial situation.

“It’s been really tough since March 2020,” Chehouani said. “Our sales dropped more than 50 percent for some months, even 70 percent, and after when we started doing carry out, they came to 50 percent, so a bit more. But still until this day, almost 38 percent of sales were lost and I’m still struggling.”

Crepes De Luxe was one of the 27 small Iowa City businesses to receive pandemic relief grant funding. Chehouani said he received $5,000 to go for the business.

Chehouani said through the pandemic relief grant from the City of Iowa City, the downtown restaurant gift card incentive program, and supportive patrons, his restaurant has received financial aid to help offset some of the revenue lost due to COVID-19.

Although these financially supportive initiatives have helped Chehouani’s restaurant, he said he does not believe business will return to a steady pace until the COVID-19 vaccine is widely available and distributed within Iowa City.

“These initiatives will help a little bit, encourage people to go grab things, and encourage us to keep surviving,” Chehouani said. “But really, the foot traffic and all this stuff, people are still really scared to be downtown or to be all around until this vaccine is distributed and COVID-19 is done with. So even with the gift cards, people are still scared to come out.”