ELY –Federal funding made available to the city of Ely is being passed along to local businesses in this year of unpredictable and unprecedented financial disruptions due to the coronavirus pandemic.
City officials announced last week that as much as $50,000 in federal CARES Act funding is available in the form of business grants. Time is of the essence as the deadline for applying to city staff for the funding is Friday, Oct. 23.
Clerk-Treasurer Harold Langowski updated city council members last week on the progress of his committee, consisting of Ely Economic Development Advisor John Fedo and council members Paul Kess and Heidi Omerza, to identify and directly contact local businesses about the grant initiative.
“We came up with a list of those businesses that were most affected by the economic shutdown and divided them into different tiers,” Langowski said. “We had some difficulty in determining an assistance level based on the type of business and size and what the effects were from the COVID-19 pandemic, and especially from the Governor’s executive orders.”
The committee divided the local businesses into three tiers: restaurants, bars, hair salons, gyms and medical clinics; lodging and outfitters; and general retail.
“We put together a mailing list and sent application letters to each of our businesses,” Langowski said. “The application process is very simple, and includes a one-page form. Let us know what your impacts and hardships were. Get them returned to us by Oct. 23. We will review all the applications, get approval by the city council and could be awarding funds by early November.”
Langowski was not sure how much money would be available to each business, as it depends on how many businesses are approved.
Funds can be spent to cover any operating expenses, including utilities, rent/lease payments, mortgages, or payments made to suppliers, he said. Funds are not eligible to recover lost revenue.
“We are trying to do as much outreach as we can,” Langowski said. “It is just recently that people are starting to realize the programs are out there and are starting to ask questions.”
“We don’t know what the future may bring or if there will be additional CARES Act funds. We certainly want to give it out so we don’t have to give any back. That has been the concern all along.”
The economic impact of the coronavirus has already been acknowledged by the city council. They recently approved refunding liquor license fees paid this year by license holders who were closed temporarily earlier this year.
Local business owners were able to apply for forgivable loans through a program funded by the Department of Iron Range Resources and Rehabilitation.
“We have as many as five local businesses that are looking to take advantage of that program,” he said.
Council member Paul Kess admitted that the funding mechanism is “uncharted territory” for local economic development.
“We did our best to try and create a system that would work and benefit the businesses that were affected by the COVID virus,” he said.
Eligible businesses must be in good standing with the Minnesota Department of Revenue, Secretary of State and St. Louis County, and demonstrate a financial hardship as a result of the COVID-19 outbreak.
VA clinic funding
In another funding windfall, late last week IRRR members granted almost $250,000 to the city for the Veterans Affairs Community Clinic remodeling project.
The city-owned building, locally known as the Sato Building, is set to undergo a $3 million expansion project next year with help from a $247,918 grant from IRRR to be used for site development and infrastructure work, including utility replacement and sewer line relocation.
Remodeling of almost 2,400 square feet at the current facility and new construction will double the size of the VA Clinic portion of building. Approximately 20 construction jobs will result from the project, according to Langowski. The expansion comes with a 20-year lease with the VA. The project will begin this fall and is expected to wrap up by the end of next summer.