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HomeMy WebLinkAbout2026-09-08 - AGENDA REPORTS - BOUQUET CYN BUSINESS ASSISTANCE GRANT PGMO Agenda Item: 1 CITY OF SANTA CLARITA .` AGENDA REPORT PUBLIC HEARINGS CITY MANAGER APPROVAL: DATE: September 8, 2026 SUBJECT: BOUQUET CANYON BUSINESS ASSISTANCE GRANT PROGRAM DEPARTMENT: Economic Development PRESENTER: Tyler Pledger RECOMMENDED ACTION City Council: Conduct a public hearing and adopt a resolution entitled: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, ESTABLISHING THE PUBLIC PURPOSE FOR AND APPROVING THE BOUQUET CANYON BUSINESS ASSISTANCE GRANT PROGRAM." 2. Approve a one-time transfer of $640,000 from Contingency Account (1009300-701001) to Business Development and Retention Account (1003500-517105). 3. Authorize the City Manager or designee to execute all documents necessary to administer the Bouquet Canyon Business Assistance Grant Program, including agreements with eligible grant recipients and a third -party grant administrator, subject to City Attorney review. BACKGROUND The City of Santa Clarita (City) is committed to supporting a strong and diverse local economy and the long-term viability of businesses throughout the community. Through the City's Economic Development Division, the City provides business retention and expansion assistance, permitting support, market research, workforce resources, and connections to regional business assistance partners. On February 13, 2026, Bouquet Canyon Road was closed between Plum Canyon Road and David Way as part of construction associated with the Bouquet Canyon Project. The closure, anticipated to remain in place for approximately 11 months, has detoured traffic through Haskell Canyon Road and Copper Hill Drive and altered normal traffic and access patterns for nearby commercial centers. Since the closure began, City staff has maintained regular communication Page 1 Packet Pg. 9 O with businesses within the corridor and implemented efforts to increase awareness and support for those businesses. These efforts have included direct outreach to businesses, ongoing communication regarding construction and access, promotion through the City's Shop Local initiatives, and sharing available business resources with business owners. As part of these efforts, the City also hosted a Shop Local pop-up event within the impacted commercial area to encourage residents to patronize businesses in the corridor and increase awareness that the businesses remain open and accessible. Despite these efforts, businesses within the corridor have continued to report challenges associated with reduced customer traffic and changes in normal access patterns. On July 14, 2026, the City Council directed staff to explore options for providing assistance to businesses impacted by the extended road closure. In response, City staff evaluated potential financial assistance models and researched programs implemented by other public agencies, including the Los Angeles County Metropolitan Transportation Authority's Business Interruption Fund. Based on this research and applicable legal considerations, City staff developed a proposed Bouquet Canyon Business Assistance Grant Program (Program) focused on business retention and the continued operation of businesses within the affected commercial corridor. Proposed Grant Program The proposed Program is intended to provide temporary, prospective financial assistance to eligible businesses experiencing documented economic hardship during the Bouquet Canyon Road closure. The proposed Program is structured to provide prospective assistance to businesses demonstrating economic hardship associated with the road closure, restrict funding to eligible operating expenses, and require appropriate verification, recordkeeping, and accountability measures. As an additional condition of assistance, grant recipients would be required to remain open and actively operating for a minimum of two years following execution of the grant agreement. These provisions are intended to ensure that financial assistance is directly connected to the public purpose established in the attached resolution. The proposed Program would not compensate businesses for previously lost revenue, rather, demonstrated revenue decline would be used to measure economic hardship and determine the appropriate level of prospective assistance toward eligible operating expenses. Program Eligibility To qualify for assistance, a business would be required to: • Be a for -profit business or eligible non -religious nonprofit organization located within the defined commercial corridor, which is limited to businesses located within the following Assessor's Parcel Numbers 2812-038-005; 2812-038-006; 2812-038-007; and 2812-008- 030; • Have operated continuously at the location for at least 12 months prior to the road closure; Page 2 Packet Pg. 10 O Provide financial documentation demonstrating a measurable revenue decline during the closure, such as federal tax returns, payroll records, sales tax reports, and bank statements; and Be solvent and in good standing with applicable governmental authorities. National or regional chain retailers, except independently operated franchises, and commercial property owners would not be eligible for assistance. Grant Awards An eligible business demonstrating economic hardship associated with the Bouquet Canyon Road closure may receive a grant to support continued operations. Grant awards may provide up to 50 percent of eligible fixed operating expenses for a six-month period, not to exceed $35,000 per business. The applicable grant percentage would be based on the business's demonstrated revenue decline: Demonstrated Revenue Decline Grant Assistance Tier 5-10% 10% of eligible six-month expenses 11-20% 20% of eligible six-month expenses 21-30% 30% of eligible six-month expenses 3 1 % or greater 50% of eligible six-month expenses Revenue decline would be determined by comparing each completed quarter occurring during the road closure with the corresponding quarter from the preceding year. The greatest demonstrated percentage decline would establish the applicable assistance level. Each eligible business may receive one grant, not to exceed $35,000, during the Program. Eligible Uses Grant funding would be restricted to documented operating expenses intended to support continued business operations, including: • Rent; • Utilities; • Insurance; and • Payroll and associated employer payroll costs. Grant Agreement and Compliance As a condition of receiving grant funds, recipients would be required to enter into a grant agreement with the City and remain open and actively operating for a minimum of two years following execution of the agreement. Businesses that cease operations prior to the end of the two-year period would be required to repay a pro-rata portion of the grant. Applicants would be required to certify the accuracy of information submitted and maintain supporting financial records for two years following receipt of an award. The City would retain the right to review and audit records to verify eligibility and compliance with Program requirements, with material violations potentially resulting in repayment of all or a portion of the grant. The Program would also include an appeals process for applicants disputing an eligibility Page 3 Packet Pg. 11 O determination or grant award. Program Administration Due to the financial documentation, eligibility verification and compliance requirements associated with the Program, staff recommends utilizing a qualified third -party administrator to assist with application intake, financial review, award calculations, documentation, and grant administration. Program Budget City staff recommends establishing a total Program budget of $640,000, including $590,000 for direct grant assistance and $50,000 for third -party Program administration. Funding for the Program would be transferred from the Contingency account, which has an annual budget of $750,000. The proposed Program budget is based on an estimate of the number of eligible businesses anticipated to apply for and receive grant funding. Program funding needs may be higher or lower depending on the number of applications received, the number of businesses determined to be eligible, and the amount of individual grant awards. If additional funding is needed to meet Program demand, staff would return to the City Council for consideration and approval of an additional appropriation. If approved by the City Council, the Program application will be released in early October. City staff would conduct direct outreach to eligible businesses regarding the Program and application process and remain available to assist businesses throughout implementation. Pursuant to Government Code Section 53083, the City is required to provide public notice and conduct a public hearing prior to approving an economic development subsidy of $100,000 or more. The required information regarding the proposed Program, including its estimated cost and public purpose, has been made available to the public in connection with this item and available online at econdev.santaclarita.gov. ALTERNATIVE ACTION Other action as determined by the City Council. FISCAL IMPACT If approved, funds in the amount of $640,000 will be transferred from Contingency Account (1009300-701001) to Business Development and Retention Account (1003500-517105) to support the recommended action. ATTACHMENTS Resolution Page 4 Packet Pg. 12 1.a RESOLUTION NO. 26- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, ESTABLISHING THE PUBLIC PURPOSE FOR AND APPROVING THE BOUQUET CANYON BUSINESS ASSISTANCE GRANT PROGRAM WHEREAS, the City of Santa Clarita (City) recognizes that maintaining a strong and diverse local economy and supporting the long-term viability of its commercial areas are important to the economic health and quality of life of the community; and WHEREAS, business closures and prolonged commercial vacancies can result in job losses, reduced economic activity, commercial blight, diminished investment, and reduced access to goods and services for the surrounding community; and WHEREAS, the extended closure of Bouquet Canyon Road between Plum Canyon Road and David Way has altered normal traffic and access patterns and created economic challenges for businesses located within the affected commercial corridor; and WHEREAS, supporting the continued operation of businesses impacted by the extended road closure serves a broader public purpose by preserving local employment and commercial occupancy, maintaining economic activity and access to goods and services, and reducing the potential for business closures and prolonged commercial vacancies, which would result in a loss of tax revenue, increased vehicle miles traveled for local residents utilizing the businesses, and potentially blight; and WHEREAS, pursuant to Government Code Section 53083, the City has made the required information regarding an economic development subsidy available to the public, provided public notice, and conducted a public hearing. NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1: Public Purpose. The City Council hereby finds and determines that the extended Bouquet Canyon Road closure has created an unusual and temporary disruption to normal access and travel patterns within the affected commercial corridor. The continued operation of businesses during this period supports the City's interest in preserving employment and commercial occupancy, maintaining economic activity and access to goods and services, and reducing the potential for business closures, loss of tax revenue, prolonged vacancies, commercial blight, increased vehicle miles traveled by local residents not able to patronize the businesses, and diminished investment in the surrounding area. The City Council therefore finds that providing temporary financial assistance to eligible businesses demonstrating economic hardship associated with the Bouquet Canyon Road closure serves a public purpose when such assistance is structured to support continued business operations and is subject to appropriate eligibility, use, verification, and accountability Page 1 of 3 Packet Pg. 13 1.a requirements. Any private benefit received by an individual grant recipient is incidental to the broader public purposes advanced by the Bouquet Canyon Business Assistance Grant Program. Each eligible business may receive one grant, not to exceed $35,000, during the Program. As a condition of receiving assistance, each recipient shall enter into a grant agreement with the City and remain open and actively operating for a minimum of two years following execution of the agreement. Assistance shall be restricted to eligible operating expenses and subject to the eligibility, verification, recordkeeping, compliance, and other requirements established in the grant agreement. Failure to comply with the grant agreement may result in repayment of all or a portion of the grant award. SECTION 2: Program Approval. The Bouquet Canyon Business Assistance Program ("Program") is outlined in Exhibit A, attached hereto. The City Council hereby approves the Program. SECTION 3: Implementation. The City Manager or his designee is authorized to retain the services of a qualified grant administrator to administer the Program. The City Manager or his designee is also authorized to execute any documents required for the Program, including without limitation, agreements with grant recipients under the Program. SECTION 4. The City Clerk shall certify to the adoption of this resolution. PASSED, APPROVED, AND ADOPTED this _ day of 2026. ATTEST: CITY CLERK DATE: MAYOR Page 2 of 3 Packet Pg. 14 1.a STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF SANTA CLARITA ) I, Melody Bartlette, City Clerk of the City of Santa Clarita, do hereby certify that the foregoing Resolution No. 26-_ was duly adopted by the City Council of the City of Santa Clarita at a regular meeting thereof, held on the _ day of 2026, by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: CITY CLERK Page 3 of 3 Packet Pg. 15 EXHIBIT A 1.a Bouquet Canyon Business Assistance Grant Program Program Framework: 1. Introduction: The City of Santa Clarita (City) plays an important role in supporting the economic vitality and long-term stability of the Santa Clarita community. The City advances this objective in part by maintaining a "Business - Friendly" environment and supporting businesses of all sizes and industries. The City's Economic Development Division provides site selection assistance, market research, business retention and expansion services, permitting support, workforce resources, and connects businesses with regional partners and other available resources. Business retention and expansion are essential to maintaining a vibrant business community and high -quality of life for residents. Business closures and prolonged commercial vacancies can result in job losses, commercial blight, reduced economic activity, and diminished investment in the surrounding community. Accordingly, maintaining the stability and viability of the City's commercial areas serves a broader community and economic interest. The Bouquet Canyon Project (Project) is located in the developed community of Saugus along the northern edge of the City on the eastside of Bouquet Canyon Road, and south of Copper Hill Drive. The Project includes construction of a new segment of Bouquet Canyon Road along the eastern portion of the Project site, following the general alignment identified in the General Plan Circulation Element. During construction of the Project, Bouquet Canyon Road is closed from Plum Canyon Road to David Way, with traffic detoured through Haskell Canyon Road and Copper Hill Drive. The road closure began on February 13, 2026, and is anticipated to remain in place for approximately 11 months. The City recognizes that an extended roadway closure of this nature can impact residents who live and travel in the area, as well as businesses within the impacted commercial corridor, by altering normal access and travel patterns and potentially disrupting customer activity. 2. Purpose: The Business Assistance Grant is intended to preserve the economic stability and ongoing viability of the impacted commercial corridor during the roadway closure by providing short-term financial assistance to affected businesses. The assistance is designed to help businesses remain open, retain employees, and continue serving the community, while reducing the risk of business closures, prolonged vacancies, job losses, loss of tax revenue, increased vehicle miles traveled, commercial blight, and diminished investment in the surrounding area. The specified corridor contains over 54,000 square feet of commercial space occupied by a diverse mix of business and organizations that serve residents in Page 1 of 5 Packet Pg. 16 EXHIBIT A 1.a the surrounding community. These establishments provide access to everyday goods and services, including food and dining, convenience retail, personal care, fitness and recreational activities, educational services, and community and faith - based services. Collectively, these uses provide local employment, generate economic activity and contribute to an active and occupied commercial area. Preserving the continued operation of the corridor through the temporary construction period serves the public interest at large. The assistance will be administered through small business grants intended to support certain fixed operating expenses through the remaining road closure. Qualifying businesses for awards shall be those with at least one year of operating history within the specified construction corridor be solvent and in good standing with applicable governmental authorities; and able to produce financial records demonstrating economic hardship directly related to the period of construction disruption. 3. Business Eligibility: To qualify for assistance, a business would be required to: • Be a for -profit business or eligible non -religious nonprofit organization located within the defined commercial corridor, which is limited to businesses located within the following Assessor's Parcel Numbers (APNs) 2812-038-005; 2812- 038-006; 2812-038-007; and 2812-008-030; • Have operated continuously at the location for at least 12 months prior to the road closure; • Provide financial documentation demonstrating a measurable revenue decline during the closure, such as federal tax returns, payroll records, sales tax reports, and bank statements; and • Be solvent and in good standing with applicable governmental authorities. 4. Ineligible Businesses: The following types of businesses are ineligible to receive funds through the Program: 1. National or regional chain retailers or outlets unless operated under a franchise agreement 2. Commercial property owners 5. Grant Award: An eligible business that can demonstrate economic hardship associated with the Bouquet Canyon Road closure may receive a grant to support continued business operations during the remaining closure period. Grant awards shall be based on the severity of demonstrated economic hardship and the business's eligible fixed operating expenses, with prior revenue declines used as an indicator of the level of assistance needed to support continued operations. Grant awards may provide up to 50% of the business's eligible fixed operating expenses for a six-month period, not to exceed $35,000. The applicable Page 2 of 5 Packet Pg. 17 EXHIBIT A 1.a percentage shall be determined based on demonstrated revenue decline' during the road closure through the most recent eligible quarters2 available at the time of application. Revenue decline shall be calculated by comparing each completed quarter occurring during the road closure with the corresponding quarter of the preceding year. The greatest demonstrated percentage decline among the completed eligible quarters shall be used to determine the applicable grant award percentage. The revenue comparison is intended to measure the severity of economic hardship experienced by the business and establish the level of operating assistance needed to support its continued operation during the remaining road closure period. Grant awards are forward -looking and are not intended to reimburse businesses for previously lost revenue. Example Formula - 5-10% revenue decline — 10% of 6-month fixed expenses - 11-20% revenue decline — 20% of 6-month fixed expenses - 21-30% revenue decline — 30% of 6-month fixed expenses - 31 %+ revenue decline — 50% of 6-month fixed expenses Eligible businesses may receive one Business Assistance Grant during the Program. The award amount shall be determined at the time of application based on the applicable revenue decline tier and documented eligible operating expenses for the grant assistance period. Businesses that receive an award may not subsequently apply for additional funding under the Program, and total assistance to any business shall not exceed $35,000. 6. Eligible Expenses: Business Assistance Grant funds shall be used to support continued operation of the business through the remainder of the road closure. Grant funds may be used for the following eligible operating expenses: a. Utilities b. Insurance c. Rent d. Payroll and associated employer payroll costs Applicants shall provide documentation sufficient to substantiate eligible operating expenses for the six-month grant assistance period. Acceptable documentation may include current lease or rental agreements, utility bills or account statements, insurance invoices or policy statements, payroll registers, payroll processor reports, and other records deemed acceptable by the City. Revenue decline is defined as a decrease in business revenues throughout the quarter(s) containing period of time during the Bouquet Canyon Road closure. 2 A completed calendar quarter containing any portion of the Bouquet Canyon Road closure and for which the business can provide sufficient financial documentation to establish gross revenue. Page 3 of 5 Packet Pg. 18 EXHIBIT A 1.a Federal and State taxes shall not be considered fixed operating expenses for the purposes of the grant. 7. Grant Agreement, Verification, and Compliance: Prior to receiving a Business Assistance Grant, each grantee shall enter into a grant agreement with the City establishing the terms and conditions of the award. The grant agreement shall require the grantee to remain open and actively operating for a period of no less than two years following execution of the grant agreement. If a grantee ceases operations prior to the end of the two-year period, the City may require repayment of a pro-rata portion of the grant based on the remaining term of the two-year period. Applicants shall certify that all information and documentation submitted in connection with the application is true, accurate, and complete, including financial records used to establish economic hardship, eligible operating expenses and the applicable grant award amount. Grantees shall maintain financial records and supporting documentation related to the grant award and use of grant funds for a period of two -years following receipt of the award. The City, or its authorized representative, reserves the right to review and audit such records to verify eligibility, the accuracy of information provided in the application, and compliance with the terms and conditions of the Program and grant agreement. Grantees shall provide requested records within a reasonable period established by the City. Any material misrepresentation, submission of false or misleading information, use of grant funds for ineligible purposes, or other material violation of the Program requirements or grant agreement may result in the grantee being required to repay all or a portion of the grant award, as determined by the City. Grant recipients are responsible for determining and satisfying any applicable Federal or State tax obligations associated with receipt of grant funds. Grant awards may constitute taxable and reportable income, and the City will issue any applicable tax reporting documentation as required by law. 8. Appeals Process: An applicant denied Business Assistance Grant funding, or disputing the amount of an award, may submit a written request for reconsideration within 10 business days of receiving notice of the determination. The request shall identify the basis for reconsideration and include any supporting documentation. Requests shall be submitted to the City of Santa Clarita Economic Development Division. Upon receipt of a timely request, the Economic Development Division shall review the application, supporting documentation, initial determination, and any additional information submitted by the applicant. If a third -party grant Page 4 of 5 Packet Pg. 19 EXHIBIT A 1.a administrator is utilized, the administrator may provide the City with the application record and basis for its initial determination. The Director of Economic Development, or designee, shall issue a determination on the request for reconsideration within 10 business days, unless additional information is required from the applicant. The Director or designee may uphold, modify, or reverse the initial determination based on the eligibility requirements and provisions of the Business Assistance Grant Program. The determination of the Director of Economic Development, or designee, shall be final. 9. Program Schedule: The application period is anticipated to take place from October through November, 2026. Following application review, awards will be issued to eligible businesses. Grant recipients must remain open and actively operating for a minimum of two years following execution of a grant agreement. Page 5 of 5 Packet Pg. 20