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Operators near big and long-standing public infrastructure or repair work, like the LRT expansion, could get up to $20,000 per year as part of a new grant program set to be reviewed by city council on April 4. City funds available for grants would be capped and set in the annual budget.
Eligible shops would rely on customers stopping by in person, like retail stores, with a gross profit loss of more than 10 per cent in a year. City staff will choose which construction activities are included, but generally, it would be city-funded work spanning multiple years where vehicle traffic is disrupted.
The idea comes from Coun. Andrew Knack, who unsuccessfully pushed for such a policy last term. Last week, he told council’s executive committee that sometimes construction doesn’t pan out as expected, and businesses are crying out for help.
“Not recognizing that this should happen with every single construction project — it shouldn’t — but where you have these really large projects where you have something that goes on for a number of years, and where you can prove that has actually had a measurable impact on the business, I do think it’s important to do this,” he said.
City administration, however, warns there are risks to consider.
“One of the largest risks with a financial assistance program is that it compensates for losses, and being able to make a causal link between the loss and the construction activity,” deputy city manager Adam Laughlin said.
Looking at financial records alone would make it impossible to know if a business is struggling because of construction or because of other external factors, like market conditions, the COVID-19 pandemic, or the company’s business model, says a staff report.
Businesses could also abuse the program and misrepresent their financial position, or could make mistakes on applications. And unless the company’s finances are audited, it would be difficult to verify, the city warns.
Such a program is also reactive and doesn’t prevent struggles from happening in the first place, the report says. If taxes go up to fund it, businesses who figure out how to make things work would be effectively subsidizing those that don’t.
Laughlin also noted the city already helps businesses amid construction disruptions through engagement, advance notice, and by offering signage to help customers find their way.
‘Devastating’ construction
Marnie Suitor, speaking on behalf of the Downtown BIA and who co-owns a cafe in the Quarters, said she knows construction is important and essential. But she said businesses downtown are already struggling from the COVID-19 pandemic and other economic factors.
“Many of them are now unable to sustain the results of lengthy build-outs, business disruptions and substantial financial hardship,” she said. “When you layer on the impacts of major construction, it’s really like pulling the intravenous tubes out of a patient that’s in the middle of an operation.”
Her cafe on 97th street has already suffered through the LRT expansion, Jasper Avenue beautification projects and road closures, she said.
“Small businesses (that) rely on physical in-person foot traffic are essential to the tourism economy and downtown main street vibrancy,” she said. “The negative impacts of major construction are more devastating now than they have ever been before.”
She also noted offering a property-tax rebate instead wouldn’t benefit businesses that rent spaces, only landowners.
Todd Janes, executive director of the Stony Plain Road and Area Business Association, suggested council instead look at helping companies before construction happens by giving money to a third-party, like BIAs or developers, for advertising and other activities “that would breathe new life and safety into construction zones.” He also suggested property tax rebates and giving credits to impacted businesses.
Just this weekend, on Saturday afternoon, four businesses affected by Epcor’s Kinnair sewer separation project as well as residential upgrades on the north side of 118 Avenue and 88 Street, were part of the Construction Party Cash Mob event hosted by the Alberta Avenue Business Association. The effort to attract more customers is to be held every Saturday, going forward.
Source: EdmontonJournal
