Edmonton considering grants for struggling businesses near major construction

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Businesses struggling due to major construction projects in nearby Edmonton may be offered financial assistance, but city staff warn the program could be risky.

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Operators near major public infrastructure or long-running repair works, like the LRT expansion, could get up to $20,000 a year under a new grant program set to be reviewed by the city ​​council on April 4. Municipal funds available for grants would be capped and set in the annual budget.

Eligible stores would depend on customers stopping in person, such as retail stores, with a gross profit loss of more than 10% in one year. City staff will choose which construction activities are included, but generally this would be city-funded work spanning several years where vehicular traffic is disrupted.

The idea comes from the Con. Andrew Knack, who unsuccessfully lobbied for such a policy last season. Last week, he told the council’s executive committee that sometimes construction does not go as planned and companies ask for help.

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“Not acknowledging that this should happen with every building project – it shouldn’t – but where you have these really big projects where you have something that lasts for a number of years, and where you can prove that has actually had a measurable impact on the business, I think it’s important to do that,” he said.

The municipal administration warns, however, that there are risks to be taken into account.

“One of the greatest risks of a financial assistance program is that it compensates for losses and is able to establish a causal link between the loss and the construction activity,” said the deputy city manager Adam Laughlin.

Reviewing financial records alone would make it impossible to know whether a company is struggling due to construction or due to other external factors, such as market conditions, the COVID-19 pandemic, or the company’s business model. company, according to a staff report.

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Companies could also abuse the program and misrepresent their financial situation, or could make errors in 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 does not prevent fights from occurring in the first place, the report says. If taxes were raised to fund it, companies that figure out how to make things work would effectively subsidize those that don’t.

Laughlin also noted that the city is already helping businesses amid construction disruptions through engagement, advance notice and offering signage to help customers find their way.

“Devastating” construction

Marnie Suitor, speaking on behalf of the Downtown BIA and co-owner of a cafe in the neighborhoods, said she knew construction was important and essential. But she said downtown businesses were already grappling with the COVID-19 pandemic and other economic factors.

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“Many of them are now unable to sustain the results of lengthy construction, business disruptions and significant financial difficulties,” she said. “When you add in the impacts of a major construction, it’s really like pulling the IV tubes out of a patient who’s in the middle of an operation.”

Her 97th Street cafe has already suffered from LRT expansion, Jasper Avenue beautification projects and road closures, she said.

“Small businesses (that) rely on physical, in-person foot traffic are critical to the tourism economy and the vibrancy of downtown Main Street,” she said. “The negative impacts of major construction are more devastating today than they have ever been before.”

She also noted that offering a property tax rebate instead would not benefit businesses that rent space, only property owners.

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Todd Janes, executive director of the Stony Plain Road and Area Business Association, suggested the council instead consider helping businesses before construction by giving money to a third party, such as BIAs or developers, for advertising and other activities “that would breathe new life and safety into construction areas. He also suggested property tax refunds and the provision of credit to affected businesses.

As recently as this weekend, Saturday afternoon, four businesses impacted by Epcor’s Kinnair Sewer Separation Project as well as residential improvements 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 should be held every Saturday in the future.

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