City of Centralia City Council met May 20.
Here is the minutes provided by the council:
A Public Hearing to discuss and consider the City’s proposed Downstate Small Business Development Program grant applications. As per the COVID-19 Executive Orders, the meeting was held and attended remotely via telephone conference. Mayor Herb Williams, called the Public Hearing to order at 3:01 p.m. requesting that the attendance be taken of those attending.
City Council and Staff Members Present: Mayor Herb Williams, Lowell Crow, City Manager; Rose Aldag- McVey, Economic Development Director; Kala Lambert; Assistant City Manager; and Kim Enke, City Clerk
The members of the public present included Marilyn Hodges & Virgilia Detering
Mayor Williams stated that the purpose of the hearing is discuss and consider the City’s proposed Downstate Small Business Stabilization Program grant applications for local small businesses in the amount of $25,000 each to aid Fleming Cleaners and Marilyn’s Downtown Lounge. He noted that application will be submitted around May 26, 2020 to the Illinois Department of Commerce and Economic Opportunity.
Rose Aldag-McVey explained that The Department of Commerce and Economic Opportunity (DCEO) has adjusted funds from the US Department of Housing and Urban Development to address needs specific to small businesses that have experienced detrimental impact due to COVID-19 through the new Downstate Small Business Stabilization Program. She added that this grant is designed to provide working capital to fund the community’s most vulnerable businesses economically impacted by the COVID-19 virus. The program makes funds available for 60 days of verifiable working capital up to a grant ceiling of $25,000 to eligible businesses.
She stated that there will be no displacement or relocation resulting from the proposed projects. Ms. Aldag McVey noted that through this hearing process, the City is soliciting and conducting an assessment of the Community Development and Housing Needs of our community. She detailed and listed those needs as follows: 1) The need for economic stabilization and development through support of local businesses and recruitment of new businesses to the community through the Downstate Small Business Stabilization Program which provides assistance to small businesses in the community, specifically at this hearing discussion of support for Fleming Cleaners and Marilyn’s Downtown Lounge. 2) The need for adequate, reliable, clean and affordable water supply. This need is being addressed through the CDBG assisted water tower rehabilitation in spring 2020 at the 8th street 750,000 gallon elevated water storage reservoir 3) The need for improved, efficient, safe, and reliable mobilization of residents, customers, visitors, and tourists that is being addressed through CDBG assisted street improvements including overlay Oak Park Drive from US Highway 161 to West 4th Street, including Oak Park Drive East, Oak Park Drive West and Middle Street, West 4th Street from Oak Park Drive to Randolph Drive and Randolph Drive from West 4th Street to US Highway 161. She stated that other improvements included STU assisted street improvements scheduled for the next three years include Hickory Street, South Locust, and Gragg Street along with MFT assisted Street improvements on East Broadway and Frazier Street. 4) Neighborhood stabilization by combating blight in neighborhoods where individuals have little funding to rehabilitate or demolish structures which is being addressed by demolishing dilapidated structures with assistance from the Illinois Department Housing Authority.
Ms. Aldag-McVey stated that the grant applications discussed in this hearing, subject to Council approval, will be submitted around May 26, 2020, to the Illinois Department of Commerce and Economic Opportunity, Office of Community Development.
The first application discussed was for Fleming Cleaners. Ms. Aldag- McVey stated that the City’s Downstate Small Business Stabilization Program grant application supporting Fleming Cleaners includes the following history, activities that will be undertaken with grant funds, amount, scope of project, costs, benefit area, and impact on community finances: The City’s Downstate Small Business Stabilization Program grant application supporting Fleming Cleaners includes the following history, activities that will be undertaken with grant funds, amount, scope of project, costs, benefit area, and impact on community finances: Fleming Cleaners has been serving the region for over fifty years. Virgilia Detering worked in a dry cleaner for eight years before becoming a presser at Fleming Cleaners in 1999. She knew the business first-hand and purchased Fleming Cleaners in January 2009. The business has been successful and has outlived other cleaners in the area. There are no dry cleaners for quite some distance. Looking in the east/west direction, the closest to the east is in Mascoutah and to the west, there are none until you enter into Indiana so that is about 130 miles or a two-hour drive between the two points. In the north/south direction, the closest is in Effingham and Mt. Vernon and that is 70 miles or about a one-hour drive between the two points. Detering’s son also works in the family business.
This sole proprietorship functions as a dry cleaner, launder, folder, and presser of clothing and materials of a variety of substances for a variety of customers. As an example of unique services, they handle drapes, quilts, preserve wedding gowns, clean placemats, linen tablecloths, and blue color worker uniforms. Two major business customers, the local hospital and community college have changed their services due to the COVID-19 Executive Order; Fleming Cleaners no longer has their steady work that has stopped altogether. The business employs four.
January is typically a slower month for cleaners due to customers’ holiday expenditures so the January budget provided does not show the revenue and payroll expenses of a typical month. Fleming Cleaners’ revenue has dropped by 30% due to the virus. But for the pandemic, the family business would have continued successfully without the need for additional assistance, but with the forced closures and change of ‘normal’ for business customers, Fleming Cleaners is unable to meet their needs for working capital. The declining revenue is not sufficient permanent funding to sustain normal operating working capital needs. Detering and her son are not taking income from the business and are pulling from their personal savings to pay business expenses.
When businesses reopen and the hospital and community college resume normal business with Fleming Cleaners, the incoming revenues will again be able to support the prior epidemic level of working capital needs of payroll, operating costs, and short-term liabilities. Twenty-five thousand dollars from the Downstate Small Business Stabilization Program grant will be used to pay operating bills. During this time, they are servicing customers, are deep cleaning the physical plant, maintaining equipment, and they are in communication with customers. Fleming Cleaners to the prior pandemic level of employment.
She noted the LMI data: This business site is at 71.30% LMI at block group 4, census tract 9527, Marion County, based upon 2011-2015 ACS data for use in 2020. The City of Centralia is at 59.83% LMI.
She stated that supporting this project will not have an impact upon the community finances beyond grant preparation and administration, as the full project funds requested of $25,000 are from DCEO to support this business. The participation agreement between the City and this business holds the business responsible to pay back funds if they do not hire staff to their prior COVID-19 level.
The Fleming Cleaners grant application is available and will continue to be available for public review during regular business hours by contacting raldag-mcvey@cityofcentralia.org.
Ms. Aldag-McVey invited any interested individuals to express their personal observations or comments regarding the proposed Downstate Small Business Stabilization Program grant supporting Fleming Cleaners that will be considered by the Centralia City Council next week on Tuesday May 26, 2020. There were no comments made.
Next, Ms. Aldag-McVey presented the information regarding the City’s Downstate Small Business Stabilization Program grant application supporting Marilyn’s Downtown Lounge Inc. which includes the following history, activities that will be undertaken with grant funds, amount, scope of project, costs, benefit area, and impact on community finances: Marilyn’s Downtown Lounge Inc. is a family business that Marilyn Hodges opened at its current location in downtown Centralia in 2003. Serving the community with hearty breakfasts, lunches, and dinners in a comfortable family-friendly environment has been the family’s calling.
They employ seven individuals and the family continues to work and manage the business. The Downtown Lounge attempted to remain open and provide order ahead with curbside service the first two weeks after the Executive Order to shelter in place. As the restaurant’s food preparation and service was not designed for the fast-food/curbside type approach nor is the architecture conducive for drive-up service, the number of customers was very limited and therefore financially draining so they have been closed since the end of March 2020.
The Downtown Lounge has been a successful business in Centralia for seventeen years. Seven employees have been temporarily laid off. Once the Orders change and the restaurant is allowed to reopen for sit down dining, Hodges plans to reopen her business and hire to the pre-COVID-19 level. A large expense is the new food inventory since Marilyn's Downtown Lounge proudly serves fresh foods.
January and February are traditionally slower months with tight or negative net income with the reliability upon March, April, and future months to cover those losses. But for the pandemic, the family business would have continued successfully without the need for additional assistance. With the forced need to function so drastically different, the Downtown Lounge is unable to meet their needs for working capital. There is no incoming revenue to pay bills; there is not sufficient permanent funding to sustain normal operating working capital needs.
When reopening, the incoming revenues will again be able to support the prior epidemic level of working capital needs of payroll, operating costs, and short-term liabilities. Twenty-five thousand dollars from the Downstate Small Business Stabilization Program grant will be used to pay operating bills. During the mandatory closure, they have deep cleaned, maintained communication with customers, and continued to market the restaurant. Marilyn Hodges is committed to reopening Marilyn’s Downtown Lounge and will hire staff to her prior pandemic level. She and her family look forward to again seeing their customers and serving them their favorite homestyle cooking.
Ms. Aldag- McVey noted the LMI data: This business site is at 84.62% LMI at block group 2, census tract 9526, Marion County, based upon 2011-2015 ACS data for use in 2020. The City of Centralia is at 59.83% LMI.
Ms. Aldag- McVey stated that supporting this project will not have an impact upon the community finances beyond grant preparation and administration, as the full project funds requested of $25,000 are from DCEO to support this business. The participation agreement between the City and this business holds the business responsible to pay back funds if they do not hire staff to their prior COVID-19 level.
Ms. Aldag-McVey invited any interested individuals to express their personal observations or comments regarding the proposed Downstate Small Business Stabilization Program grant for Marilyn’s Downtown Lounge Inc. that will be considered by the Centralia City Council next week on Tuesday May 26, 2020. There were no comments made.
With no comments or further discussion, the public hearing was adjourned by Mayor Williams at 3:16 p.m.
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