It’s one of SLO County’s smallest cities — but it’s providing some of the biggest COVID aid

When COVID-19 shut down high school events — proms, baseball games, even graduations — Krista Smith knew her business was in trouble.

She owns Hey Gorgeous Formal Wear in Grover Beach, and prom dresses are her bread and butter.

“Owning a business is challenging ... Obviously, the bills still need to be paid,” said Smith, 29, who is working a second job at a restaurant to help support her shop.

A financial boost came from an unexpected source: The city of Grover Beach awarded her a small, one-time grant.

“That was huge for me — a game-changer,” said Smith. “I lost prom ... all of my tux rentals. This is life-changing.”

Smith is one of 20 small business owners to receive micro-grants of up to $10,000 from the city of Grover Beach. Others include a laundromat, a used book store, a yarn shop, a couple of hair salons and a sandwich shop.

These mom-and-pop operations are using the money to cover rent, pay employees and pay down debt. One is even expanding operations.

Grover Beach is not wealthy. In fact, it has one of the smallest budgets of any city in the county.

Yet it put a priority on helping small businesses stay afloat in one of the worst economic disasters in our history, using $50,000 from its general fund, plus $100,000 in economic development money from PG&E — money that was part of the Diablo Canyon closure settlement.

If Grover Beach can do it, why not other cities?

Not all businesses qualify for loans

While there are other sources of financial aid from agencies with much deeper pockets than local governments, not everyone qualifies for those.

Julia Powers, who owns the Grover Beach yarn shop Let’s Knit, has gotten no financial aid at all, aside from a Grover Beach grant.

“I didn’t qualify for the PPP (Paycheck Protection Program) because I’m the sole proprietor. I don’t have any employees,” she said.

She also applied for pandemic unemployment assistance, but hasn’t gotten a response.

Powers said she’s going to use her Grover Beach micro-grant to pay three months of rent. Otherwise, she’d have to dip into her personal savings.

“I’m just grateful to them,” she said. “This is a gigantic help for me.”

Even businesses that qualify for other COVID-19 financial aid programs can benefit from local assistance.

Take Grover Beach grant recipient Anthony Salas, who runs Epic Entertainment.

He supplies DJs, lighting and photo booths for special events such weddings, school dances and corporate shindigs — events that practically disappeared when coronavirus hit.

Yet Salas isn’t freaking out — just the opposite.

He’s expanding his business to add offices in Santa Barbara and Monterey. He wants to take advantage of opportunities that are still out there — such as scaled-down weddings — and to be ready when things open back up.

The Grover Beach grant, he said, is “awesome.”

“This helps us keep the doors open as we plan for this expansion process.”

The payoff for cities

This isn’t just about altruism. It benefits cities to have businesses open and generating the tax revenue that funds police and fire, road repair, parks and libraries and all the other services we rely on.

Even though many shops and restaurants are operating at reduced capacity due to the coronavirus pandemic — Smith’s formal wear shop, for example, sees customers by appointment only — they continue to generate some sales tax revenue. And that’s better than nothing.

There’s another, less tangible benefit: Empty store fronts often beget more empty store fronts, and there’s nothing like boarded-up buildings to signal a dying downtown.

For tourist areas like ours, that’s an economic catastrophe.

It’s understandable that cities and counties would be reluctant to offer financial aid to businesses when they are facing huge deficits themselves.

That’s where the $10 million Diablo Canyon economic development fund could come in. It’s money specifically earmarked for attracting new businesses — but it also can be used to shore up existing ones.

Every city in the county, as well as the county itself, received a share of funds, paid for by PG&E ratepayers.

Here’s the approximate breakdown per agency:

• San Luis Obispo County: $3.6 million
• San Luis Obispo City: $1.8 million
• Paso Robles: $1.1 million
• Atascadero: $780,000
• Pismo Beach: $760,000
• Arroyo Grande: $750,000
• Morro Bay: $500,000
• Grover Beach: $196,000

The county plans to use $1.7 million of its share on economic development.

So why not put a small portion of that money to good use now, as Grover Beach has done?

Even a modest investment could go a long way, given the number of small businesses in communities such as Cambria, Nipomo and Oceano.

It’s true that a small grant or loan to any one business — be it a restaurant, a gym or a prom dress shop — can’t guarantee its success in these uncertain times.

If COVID-19 cases continue to rise in San Luis Obispo County, we, too, may have to backtrack on reopening, and that could very well cause a fresh wave of closures.

On the other hand, throwing businesses a lifeline now could have huge pay-offs down the road, if it means they’ll still be around when we finally come out the other side of this.

Yes, we need big job generators like Mindbody and Dignity Health. But allowing small enterprises to wither and die makes zero sense, especially if a $10,000 or $20,000 grant or loan can keep them going.

Local governments shouldn’t wait for Diablo Canyon to close. They should start grant and/or loan programs now to help small businesses survive the coronavirus pandemic.

This story was originally published July 12, 2020 at 7:19 AM.