Oakland Can Raise $400 Million To Help Small Business Thanks To Gov Newsom, AB-464, But Will It?

Oakland Can Raise $400 Million To Help Small Business Thanks To Gov Newsom, AB-464, But Will It?
Oakland Can Use TIF To Raise $400 Million To Help Small Business Thanks To Gov Newsom, AB-464, But Will It? The details: Oakland can use tax increment financing to raise $400 million for small business economic assistance thank to AB464. In the aftermath of the COVID-19 pandemic, which devastated California’s mom and pop enterprises, small business advocates won a historic victory today when Governor Gavin Newsom signed AB464 into law. The bill will supply small businesses with new state funding to buy and/or renovate their own brick and mortar locations, an incredible boost for the state’s local economies. To date, EIFDs have only been used for small individual projects in only a few cities, and the funding was limited to new construction. The law signed today allows for state funding to be used for the maintenance of existing small businesses or the acquisition of new commercial properties. Widening the scope and authority of EIFDs will allow for more access to capital to address large and pressing needs at the local level. “Economic and community recovery from the devastating impacts of the COVID pandemic will depend on public investments as soon as possible in order to restart local economies,” stated AB 464 author, Assemblymember Kevin Mullin. “Since local communities have few alternatives to raise significant funding on their own, EIFDs can solve this civic investment crisis quickly, when it’s most needed. With tax-exempt bond interest rates currently under 4%, this is a perfect time to leverage civic financial capabilities. The need for affordable housing, homeless and community facilities, as well as small business capital is at crisis level and I am proud that AB 464 provides the ability to expand the scope and authority of EIFDs so these issues can be addressed at sufficient scale and have a real impact.” The new law couldn’t come soon enough: California voters in a statewide January 16- 19, 2021 poll conducted by David Binder Associates reported widespread distress due to the Covid-19 Pandemic: 32% have seen household members lose their job. 35% have experienced some other income loss. 15% have seen their family business shut down. Overall, 61% have experienced some negative financial impact. “Now that California has opened the door to EIFDs as a financing mechanism for business development -- the sector most severely impacted by the pandemic -- we will see renewed and stabilized small business growth across the state, said John Elberling, Founder and President of Build Affordable Faster California, which sponsored the bill. “That is precisely why Assembly member Mullin introduced AB 464, to allow California cities to assist small businesses in buying or renovating their own properties as part of their community’s economic recovery.” The new law will also allow cities to support the acquisition and improvement of new facilities for community nonprofit agencies that provide homeless, youth, health, and social services to local residents. “The Richmond District and communities throughout the City will need significant infrastructure investments in affordable housing and for our small businesses so we can re-emerge and recover from the pandemic,” said San Francisco Supervisor Connie Chan. “Assembly Speaker Pro Tem Mullin’s bill will offer new financial tools for San Francisco to deliver those investments.” The message from voters is clear: Californians need an economic stimulus for small businesses to jump-start its recovery, and an investment in affordable housing to protect hundreds of thousands of residents from falling into a serious crisis. Oakland can turn the flatlands into one big EIFD zone and raise $444 million for a bond issue to help small businesses with $10,000 grants to each of the 44,000 small businesses in the City. It can taylor it to help the homeless. The possibilities are limited only by imagination. Oakland must do this now. No excuses. Stay tuned.
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