On Wednesday, November 6, the D.C. Council’s Committee on Business & Economic Development held a public hearing, in part to consider three recently introduced bills that would offer financial assistance to small and legacy businesses. The Committee heard testimony from a range of residents, including small business owners and small business advocates. Their testimonies spoke to a number of pressing issues, such as the rising cost of rent and property taxes, the lack of small commercial spaces available for small businesses, and consumers’ shift to large chain retailors and online shopping.
One of the bills in question at the hearing was the Protecting Local Area Commercial Enterprises (PLACE) Act of 2019, introduced by committee chair Kenyan McDuffie (D-Ward 5). The Act would establish a legacy business assistance program to provide financial assistance to legacy businesses that are struggling to continue operating due to increasing rent. It would also offer property owners financial incentives to lease to legacy businesses. According to the legislation, a legacy business is “one that has been continuously eligible for certification as a local business enterprise for 15 consecutive years or as a small business enterprise for 10 consecutive years and contributed to the history or identity of the District or its neighborhoods.”
In addition, the Small and Local Business Assistance Amendment Act of 2019, introduced by committee member Charles Allen (D-Ward 6), would offer a tax credit to qualifying small and local businesses for a portion of rent or property taxes paid. It would decrease the taxable value of a property if the property is owned by a qualified business and guarantee rent payments to property owners in the event the tenant (business) cannot pay. Under this Act, a qualified business is a corporation that is a District-based business as defined in the Made in DC Program Establishment Act of 2016 or a corporation that is certified or is eligible to be certified under the Small, Local, and Disadvantaged Business Enterprise Development Assistance Act of 2005. Among other requirements, qualified businesses must have a main business office in D.C., a majority of the owners must be D.C. residents, and/or a majority of employees must be D.C. residents.
Lastly, the Longtime Resident Business Preservation Amendment Act of 2019, also introduced by Allen, would offer “grants and low-interest loans to longtime resident businesses at risk of displacement.” The Act would supplement rent payments to landlords that enter into long-term leases with a longtime business. The Act is an amendment to the Small, Local, and Disadvantaged Business Enterprise Act of 2005 which defines a longtime resident business as a “business enterprise that has been continuously eligible for certification as a local business enterprise for 20 consecutive years, or a small business enterprise for 15 consecutive years.” In addition to being a longtime resident business, a qualified business must offer evidence of its historic impact, demonstrate a commitment to maintaining its impact in the neighborhood, and provide evidence that the business is at a significant risk of displacement.
Jennifer Kuiper, District Bridges Neighborhood Director for the Lower Georgia Ave Main Street program, testified that longstanding D.C. businesses are at risk of closing, partially as a result of increasing rent. Kuiper stated, “We are right now looking at losing a business that's been [here] almost 10 years because their lease is up for renewal, and it's going up from $6,000 to $10,000. . .The current owner asserts that this is market-rate, because he's convinced two other less experienced businesses to move in at that rate. And both of those businesses are at risk of closing."
Others who testified echoed similar sentiments while also offering the committee suggestions on how to improve current and future programs and expand efforts beyond the bills in question.
Che Ruddell-Tabisola, Board Secretary of Think Local First D.C. and owner of BBQ Bus, told the committee he struggled to find a commercial space that was the appropriate size for his business; in his experience, commercial space for rent is oftentimes too large for small businesses.
Ruddell-Tabisola went on to suggest an inclusionary zoning program for commercial spaces, something the committee has considered in the past. "We require developers building these condos and things to put aside some affordable housing. What would it look like if we required them to put [aside] some affordable retail space?" commented Ruddell-Tabisola.
Raj Aggarwal, board chairman of Think Local First D.C., spoke to another idea: expanding D.C.’s Home Purchase Assistance Program (HPAP) to include commercial endeavors. The HPAP program provides up to $80,000 in financing assistance at a 0% interest rate.
While financial assistance to small businesses and legacy businesses was the main topic of discussion, some who testified also mentioned the changing tides of consumer habits. Owner of 12 local Ace Hardware stores and former board chair of Think Local First D.C., Gina Schaefer expressed her concern that financial assistance alone will not solve the problem, and that the rise of corporate giants like Amazon and Walmart have hurt small business that are competing to sell similar products.
For information about the importance of supporting local businesses, visit ABA’s Local First and Economic Impact Studies page.