San Antonio’s small businesses soon will be able to apply for grants from federal COVID-19 relief funds available under the American Rescue Plan Act.

The City Council voted unanimously Thursday to open applications Aug. 1 for grants ranging from $15,000 to $35,000 aimed at helping businesses that lost revenue during the pandemic.

Of the roughly $327 million San Antonio received from ARPA, the council designated $30.9 million to help small businesses. Roughly $17 million of that will go toward the grants approved Thursday, which will be awarded and distributed before the end of the year. 

The council must still determine how to spend the remaining $14 million, though Thursday’s vote approved a basic framework aimed at bolstering business development organizations, helping businesses improve their digital presence and encouraging consumers to spend their money at local businesses.

“That amount of money [$17 million] can help about 850 companies,” said Jeremy Roberts, chair of the Small Business Advisory Commission that advised the city on how to spend its pandemic relief money. “It doesn’t help everybody … but we’re doing what we can to help those in immediate need first.”

Thursday’s vote came as City Council heads into its July break. It won’t meet again until August. 

Though council members agreed on the urgency of approving the small business grant money before then, questions and conflicting opinions remain about how the city should approach helping businesses that have been hurt by the pandemic.

Despite previous tranches of federal financial aid throughout the pandemic, the San Antonio Hispanic Chamber of Commerce estimated more than a third of small businesses have already failed since the coronavirus took hold in spring 2020, triggering shutdowns and other business restrictions.

With those numbers in mind, much of the discussion about this round of funding centered on whether the city should spend ARPA money on efforts to build a stronger infrastructure of support for small businesses that have managed to weather the pandemic. Among the criteria for this round of funding, businesses must be able to demonstrate a minimum of 20% reduction in gross revenues from 2019 to 2021.

“As a small business owner, I know that I could not continue for two years experiencing [that] loss — it’s unheard of,” said Robert Melvin, president and CEO of San Antonio for Growth on the Eastside, a nonprofit that provides support for small businesses.

“However, these funds can be used to enhance [business development organizations] that would allow for them to be more successful in the future … allowing the city to reconnect with a growing and thriving small business community,” he added.

The Small Business Advisory Commission, which includes several leaders from those business nonprofits, previously crafted a plan that would have directed roughly $6 million of the ARPA funds toward those organizations.

Last week the council’s Economic and Workforce Committee called an emergency meeting to override that proposal, moving a greater share of the money toward individual grants. 

“Our feeling was that we needed more cash infusions, and we needed more direct access to the funds,” said Marina Gonzales, CEO of the Hispanic Chamber, which pushed for the change. “ARPA was meant to be a rescue plan act, not a sustainability or ecosystem development act for later on.”

At Thursday’s City Council meeting, differences of opinion on how the city should help small businesses were still on full display.

Councilman Mario Bravo (D1) proposed an amendment to the plan that would require businesses that are behind on their utility payments to enter a payment plan with CPS Energy before they could become eligible to receive ARPA money.

The council voted not to include that requirement for businesses seeking the $17 million in grant money, but agreed to consider it for those helped by the remaining $14 million.

Bravo’s idea incensed one business owner in his district, Augie’s Alamo City BBQ Steakhouse owner Augustine “Augie” Cortez Jr., who stormed away from the podium after he was cut off from airing his complaints.

“I owe CPS more than what this [grant] check is going to be,” said Cortez, who suggested that the city should work with its utility to help businesses that are struggling.

Cortez was this year’s El Rey Feo after raising more than $300,000 for scholarships. The Hispanic Chamber held a recent meeting at his restaurant in an effort to help bolster business.

Referring to the City Council, Cortez said in an interview, “These people have ambitions of trying to run the city, but they have no idea about local business.”

Rent on Cortez’s lower Broadway restaurant costs roughly $12,000 per month, and utilities run another $3,500 per month, he said. He plans to apply for the small business grant, even though he believes he’ll have to close his Broadway location, one of two restaurants he owns, before the end of the year.

“It’s not just about business,” said Cortez. “This affects my family, this affects my wife, my livelihood, our personal debt, our personal bills.”

Augie’s BBQ is among the businesses that could qualify for an extra $10,000 in grant money because of its proximity to a city construction project, an idea that was included in Thursday’s plan at Bravo’s urging. The city’s eligibility framework lists 19 ongoing construction projects that could cause business owners to qualify for more money.

The city will not require businesses to explain how they’ll use the grant money. But Economic Development Department Director Brenda Hicks-Sorensen said Thursday that federal guidelines stipulate the money can’t be used to pay outstanding bills or debt. 

San Antonio is partnering with microlender LiftFund to administer the grants and leaning on that organization to see that the money is spent in accordance with the federal guidelines. 

Applications will be accepted Aug. 1-22. The city plans to market the program and offer assistance with applications beginning in July. All funds must be distributed by mid-December.

“To be perfectly frank, we could have used every dollar [from ARPA] on small businesses,” said Jim Hollerbach, another member of the city’s Small Business Advisory Commission who expressed disappointment that the group wasn’t doling out a larger share of the city’s $327 million.

“There’s lots of special interest groups out there that have been bird-dogging this funding since it was rolled out from the feds,” Hollerbach said.

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Andrea Drusch

Andrea Drusch writes about local government for the San Antonio Report. She's covered politics in Washington, D.C., and Texas for the Fort Worth Star-Telegram, National Journal and Politico.