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City Council reinstates business improvement loans

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A successful business improvement loan program was reinstated by the Sonoma City Council Monday.

The program, long in existence and part of an award-winning Economic Development Strategy, was cancelled when its funding source, the Sonoma Community Development Agency, was dissolved by the state legislature.

Funding such items as façade improvements, access ramps for the disabled, signage and permanent interior building improvements, the program provided low-interest loans to many small businesses that met basic criteria.

The only caveat was that the business had to be located within the redevelopment agency project area.

The reinstated program has been updated and no longer has redevelopment project area limitations, making funds available for businesses located within the city limits. Other differences are that this is a single program, providing up to $5,000 in matching-fund loans in a single category (or a $10,000 total over three years). The program is targeted at business owners who own or lease the property (not commercial property owners, unless they operate the business at that location). Another change is that “formula businesses,” as defined by the city, will not be eligible.

Priority will be given to businesses that locate in buildings that are long vacant, historic or whose building features have functional obsolescence. Businesses that contribute to the diversity of the business mix will also be given priority.

It does have financial limitations. The council approved setting aside $50,000 for the program from property taxes returned by the state when redevelopment funds collected by the city were redistributed.

“The majority of the returned funds went into our street fund,” said City Manager Carol Giovanatto. “This is a token amount.”

The city will annually receive a portion of the property taxes that originally went into the redevelopment fund as tax increment. But the yearly amounts are not yet clear, given the fact that initial payments have included funds from previous years.

Council members were happy to reinstate the program, which has been ongoing since the late ’90s. Laurie Decker, Economic Development manager, said that from 2007 to 2011 alone, a half-million dollars was reinvested in the business community.

The program will be starting again in May and will not be retroactive.

Decker also announced a new project in conjunction with the Sonoma Valley Economic Development Partnership. Called Sonoma Valley Springboard Program, it will provide technical assistance to low- and moderate-income microenterprise owners and prospective entrepreneurs in Sonoma Valley, along with connections to other available resources, in order to provide a springboard to economic advancement.

This program is being funded through a federal CDBG grant.

In other business the council:

• Heard a presentation on public banking.

• Met new finance director, DeAnna Hilbrants and police Sgt. Adrian Mancilla.

• Presented Student Creative Arts Awards to Maya Harris and Siena Guerrazzi, winners of the Cultural and Fine Arts Commission’s competition.

• Proclaimed Children’s Memorial Day, National Crime Victim’s Rights Week, and Sexual Assault Awareness Month.

  • http://www.amillioncooks.com/ davecooks

    The city’s efforts to support local businesses are to be applauded. That said, unless the property taxes used to fund this initiative are exclusively from property taxes paid by local businesses, this is an innapropriate use of taxpayer funds. I’d like to have access to property tax collections to improve my home… that’s not going to happen.

    • Village Idiot

      It’s inappropriate — call it graft — any time public funds are used to benefit a special private interest, and can there be any doubt that a privately owned business is a special interest?? This whole program should be scrapped. Any time a business needs public money to help it pay its expenses, it should close down. Businesses, like private residents, should be paying into the fund that supports PUBLIC projects and services that benefit the entire public, like streets, schools, water, sewer, public safety, etc. This town doesn’t even have a public swimming pool (something many towns half our size have) and yet City Council insists on subsidizing private businesses.

      • http://www.amillioncooks.com/ davecooks

        Agree, public funds used for private interest is not good business.