The City of Iowa City will allocate $4 million in funding to several local businesses and entrepreneurs, specifically to those run by and serving people of color, who have had a difficult time getting started.

At the city council’s Nov. 6 meeting, the city council approved a preliminary recommendation for where and how the $4 million will be split up. 

The funding comes from federal COVID-19 relief money the city received through the American Rescue Plan Act; Iowa City received a total of $18.3 million from this act. This grant program is the largest single allocation of ARPA funding the city has proposed, Redmond Jones II, Iowa City’s deputy city manager, said. 

According to the Nov. 6 agenda documents, a total of 30 organizations applied, and seven organizations were recommended to receive the funding. 

The nonprofit Dream City received a recommendation of $3 million. Dream City, located at 611 Southgate Ave., advocates for residents with community development projects, such as local businesses.

Frederick Newell, the founder and executive director of the nonprofit, said Dream City plans to use the $3 million to purchase the building, Kingdom Center Church, that the organization currently rents. 

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Newell said they also want to renovate the building and expand it into the green space near it. The renovations will include creating spaces for entrepreneurs and businesses to host events and work within. 

Ultimately, this grant will help Dream City become a regional hub for aspiring entrepreneurs and business owners to help get their businesses started and growing, which will benefit the entire community, Newell said.

“Though the language is ‘Dream City, Dream City, Dream City,’ this really isn’t about Dream City,” Newell said. “We’re just a part of a larger community that will have a home that really inspires people.”

The second largest funding recommendation is to the Multicultural Development Center of Iowa for $600,000. This organization is a local nonprofit that aims to support underestimated businesses and encourage diversity in local economic development.

Tracy Jon Sargeant, the nonprofit’s founder and executive director, said the center was one of the first community partners who helped develop the grant program. 

The organization has been working with city staff for the last two years to help determine where the ARPA funding should be allocated, he said.

Sargeant said the multicultural center, which is entirely run by volunteers, plans to use its $600,000 allocation to hire full-time staff to eventually help the organization become a certified Community Development Financial Institution.

The certification allows the organization to receive federal funding that it can then loan to certain demographics to generate inclusive economic growth. Sargeant said the center will target Black and Brown entrepreneurs and business owners.

“There’s a lot of nonprofits that are doing a lot of really important things, but there’s not a lot of public dollars to go to support that,” Sargeant said. “So having the city see the value in what we’re doing, obviously makes us feel seen, and it validates what we’ve been doing and plugging along for the last seven years.”

The remaining organizations that have received preliminary funding recommendations are as follows:

• $100,000 to DOTŁ’IZHI LLC for small grants and technical assistance for Native American arts and culture-related businesses

• $100,000 to Tailored & Tax Accounting LLC for accounting, tax preparation, and financial business planning
• $100,000 to the Wright House for business support and small capital upgrades
• $80,000 to the Neighborhood Centers of Johnson County for financial literacy and business development
• $20,000 to Just from the Heart for marketing and advertising assistance, such as television, radio, and online advertisements

In terms of the next steps, the specific businesses that have been selected to receive $100,000 or more will now go through training from the University of Iowa Nonprofit Resource Center to help them learn how to report their spending to the government before actually receiving the funds, Jones said.

Additionally, the selected businesses will also receive training and support from the city to help prepare their final grant agreement to be presented and voted upon by the city council, Jones said. 

A specific timeline of when this will be presented to the council cannot be determined yet because of the unique circumstances of each organization, Jones said. Once the agreement is approved by the council, the organizations will receive their funding.