When the city of Sacramento put out a $1 million pool for emergency relief to aid local small businesses affected by the coronavirus pandemic, applicants had about 48 hours to respond.
After more than 3,000 applications made it through the portal, only about 1,000 were in a position to be considered for a zero-interest loan from the city that could be as much as $25,000.
When the applications were processed, reviewed and the decisions were made based on requirements, 101 small businesses from the city of Sacramento were approved. Though there may be more, only five businesses were Black-owned, with one African American owner who is the proprietor of two businesses.
The Black businesses that received loans — ranging from $5,000 to $25,000 — were Flatstick Pub, D’s Smokin Pit, Urban Roots Brewery, Family Matters Child Care Center and Pangaea Bier Cafe. Pangaea, located in Curtis Park, and Urban Roots in Midtown, have the same owner, Rob Archie.
Kenneth “KJ” Johnston, the owner of KJ2 Productions, an award-winning film and video production company, said he was one of the applicants. Johnston, who has eight employees on payroll, did not receive a loan.
Sacramento City Councilman Allen Wayne Warren of District 2 mentioned the emergency loan to Johnston who said he “went through the proper channels” to apply for a piece of the $1 million pool before the deadline.
“I submitted my application on time, and then I hadn’t heard anything,” Johnston told The OBSERVER. “Then I finally received an email saying I was denied. And the reason why I was denied because it said I was not a ‘non-essential business.’”
An essential business and essential worker are defined as work that involves the safety of human life and protection of property, in regard to the 2013 Essential Services Act.
That means that public safety, health care, restaurants, and emergency employees are able to work. Everyone else must stay home to prevent the spread of COVID-19. However, many restaurant businesses were among the 101 entities that will receive a loan from the city of Sacramento.
“That kind of sucks that you think a business is non-essential,” Johnston said. “But that’s the reason why I was denied. It was not explained when I applied. It just said small businesses can apply.”
The Community Engagement Manager for the City of Sacramento, Lynette Hall, confirmed that the loan was limited to essential businesses and if an applicant did not fit the criteria they were eliminated from the process.
“Priority was given toward restaurants, retail businesses with a storefront, and childcare facilities,” Ms. Hall said. “Priority was given to them on a first-come, first-served basis.” She said Flatstick Pub, where some of the ownership is African American, were No. 8 on the list when the application was submitted.
Ms. Hall’s position was created within the City’s Innovation and Economic Development department, which will work across most city departments to create and design effective outreach strategies to engage, educate and empower the community.
She started her job last December. The five Black businesses that were awarded loans are the one she can identify. The City did not ask the applicants about ethnic ownership.
Ms. Hall said she sounded the alarm to alert a few Black businesses that she was aware that the emergency loan was available. She went around knocking on doors and appeared on KDEE 97.5 FM radio station to discuss the opportunity.
Ms. Hall says the loan application, in her opinion, was “fair,” and that it was not geared to seek out what groups of businesses were classified by color. She said the city was “reluctant” to ask that information up front, but a survey was sent out to the businesses awarded a loan with the information of race included. Still, some that advocate for Black businesses in Sacramento say the process was flawed. Azizza Davis-Goines, the president of the Sacramento Black Chamber of Commerce, SBCC, sticks by her comments she voiced after the portal to apply for the loan closed.
“It was a rush-job with no strategy,” Ms. Davis-Goines said. “It’s pretty much the same. I think that was rushed and not well thought out. I really think the whole idea was to infuse the restaurants and retail industries. The businesses I represent are not so much in those categories.”
SBCC does have members in the small beauty salon and barbering industries. African Americans, whether they are members of SBCC or not, absolutely have a presence in the city of Sacramento. But they are nowhere near the category of essential.
Akilah Uwimana Hatchett-Fall, who runs a small business in Sola Salon, a line of beauty salons located across the street from Golden 1 Center, did apply for the loan. She was denied too. Mainly because she doesn’t have any employees on top of not being essential.
Ms. Davis-Goines said she is working with the city to seek funds for Black non-essential businesses, which may have a few employees or one self-employed person.
“I believe that Black businesses are essential and we should be able to maintain economic stability,” Ms. Hatchet-Fall said. “I do hair and I’ve been doing hair for 33 years. I never had to apply for unemployment. I’ve been working since I was 14 years old.”
A few days after the portal closed, Sacramento Mayor Darrell Steinberg said the emergency loan was put in place to let small businesses know that the city was “doing something.” City officials estimated that more than 3,000 small businesses applied and about 1,400 were processed.
Rob Archie, an African American entrepreneur, submitted applications for his Pangaea restaurant in Curtis Park and Urban Roots, which is located in midtown Sacramento. Between the two businesses, he has 75 employees.
Archie said he has been working extremely hard to keep his employees working and paid.
“That’s the No. 1 thing. To take care of them,” Archie said of his employees. “When it first happened it was fear as the first emotion and second it was like, ‘How can we help?’ We had to take care of our team, we didn’t cancel their healthcare, and we wanted to make sure everyone get paid.”
Inititionally, there were some decisions made, Archie said. The hourly employees were furloughed while the salaried positions stayed on. All of that has changed in the last couple of weeks.
With the loan Pangaea and Urban Roots received from the city and the Paycheck Protection Program loan from the Small Business Administration, Archie is now able to have all employees punching the clock.
“Looking at the problem, you know things don’t stop like payroll, rent and everything,” Archie said. “I know the city only had a $1 million to spread among everyone. It’s not a lot of money to take care of everything. But it was a great thing that the city did to try to do something.”
By Antonio Ray Harvey | OBSERVER Staff Writer