ELY – Eighteen local businesses will share approximately $50,000 in federal CARES Act funds following grant distribution approval at a special city council meeting last week. The grant program and a separate forgivable loan initiative come from the federal government and the state, through the city, in response to the coronavirus pandemic.
The one-time grant payment application process proceeded quickly last month once the program was announced. An ad hoc committee of the city’s Clerk-Treasurer Harold Langowski, Economic Advisor John Fedo and council members Paul Kess and Heidi Omerza recommended the payments to all 18 eligible businesses that applied.
Following council approval, the checks were cut and sent late last week. Grant payments were divided into three tiers.
Tier 1, restaurants, bars, hair salons, gyms, dentist/eye clinics, received $3,500 each, including Studio North, Jasper Company (Northern Grounds and Stay Inn Ely), Northern Expressions, Heavy Metal Sports, Rockwood, Amici’s, Zaverl’s Bar and Sir G’s.
Tier 2, lodging, outfitters, bait and tackle shops, received $2,500 each, including Arrowhead RV, Women’s Wilderness Discovery, and Motel Ely.
Tier 3, general retail, received $1,500 each, including Kondos Outdoors, Potluck, Art and Soul Gallery, Wintergreen Northern Wear, Ely Bike and Kicksled, Kekekabic Studios, and Hand Done T-Shirts.
Langoswki said the committee sent direct-mail inquiries to about 111 businesses that met the category consideration approved by the council earlier last month. “Of those 111 we received 20 responses,” he said.
“One of the businesses was a non-profit organization (not a qualification) that made a valued argument as to why they should get assistance, and another applicant was the recipient of county or state assistance and were withdrawn from consideration, so we ended up with 18 applicants.”
Mayor Chuck Novak commented on the low number of city businesses who applied for the grants.
“That goes back to the old adage, ‘You can lead a horse to water, but you can’t make them drink it,’” he said.
Langowski said the two council members “made most of the decision-making” and city staff provided assistance as needed. The total grant amount distributed was $46,000.
Kess said more businesses were more adversely affected (by the economic challenges of the coronavirus pandemic) than others.
“Some were closed for up to 90 days,” he said. “We tried the best we could, although this is not a perfect system, to direct the aid to the businesses that were more impacted.”
Omerza said the committee expected more participation.
“We had an original dollar amount in mind but we didn’t have as many applicants as we thought,” she said. “And we want to add the non-profits to the list as they are a big part of our community.”
Langowski added that an additional funding round of $1,000 each was recommended for non-profit organizations that maintain a storefront business in the city. Those applications will be considered by the council at their Nov. 10 meeting.
A forgivable loan program offers another aid package for city businesses to create more jobs.
The city of Ely’s COVID Assistance Program allows businesses to apply for $11,000 for one new employee or $22,000 for two new employees. The new staff must be paid at least $15 per hour and remain in the position for at least two years.
Those businesses that meet the program requirements would have the loan forgiven. Those businesses that don’t would be required to repay the loan over five years at one-percent interest.
The Department of Iron Range Resources and Rehabilitation contributed $120,000 for the program, according to Fedo, and the city of Ely Economic Development Authority kicked in another $30,000. A subcommittee will review the applications.