Economic Resiliency Grants buoying North Dakota businesses’ pandemic response

According to James Leiman, the department’s director of economic development and finance, the state has

According to James Leiman, the department’s director of economic development and finance, the state has issued roughly 1,800 Economic Resiliency Grants totaling $32 million. The grants, which have been distributed to businesses to reduce the spread of the coronavirus and restore consumer confidence, have funded purchases of personal protective equipment, plexiglass, touchless payment systems and HVAC equipment statewide.

“The response itself has been relatively amazing,” Leiman said. “We’ve had about 3,500 applications for it, so the demand is extremely high.”

The high demand for the department’s grants as opposed to federal offerings, such as the Paycheck Protection Program and Economic Injury Disaster Loans, Leiman explained, is because the state’s grants are designed for consumer confidence-building and COVID-19 mitigation, whereas federal programs are expenditure-based.

The Economic Resiliency Grants may very well be a one-of-a-kind offering nationwide, Leiman continued. “I know other states have basic grant programs but none tied to revenue generation that I am aware of,” he said.

“In speaking with companies across the state — and we surveyed in excess of 11,000 — everybody had the same response when it came to ‘What are your biggest needs?’,” Leiman said. The resounding answer: “‘We need to get customers back in the door.'”

Business ground to a halt for Men’s Hair Co. at the beginning of the pandemic when North Dakota Gov. Doug Burgum ordered barbers to close, Troy Rinehardt said, leaving the hair salon with few options for generating revenue.

“We weren’t able to do takeout or anything compared to some other businesses, which impacted our whole team and operations for close to two months,” Rinehardt explained.

In order to reopen when the state allowed, Men’s Hair Co., which has three Fargo locations and one each in Bismarck, Grand Forks, West Fargo and Moorhead, needed to take precautions.

“Before we even knew this grant was out there, we did a significant amount of improvements in our stores just to not only get our team to be safe but for our customers to feel like we went the extra mile,” Rinehardt said.

Those improvements included installing shields between stations, purchasing masks and more aprons for staff, installing touchless faucets in restrooms and procuring professional-grade disinfectants. The disinfectants, which have a “kill-time” of 30 seconds, Rinehardt said, allowed Men’s Hair Co. to quickly clean between clients.

Work stations are distanced at Men's Hair Co. located at 855 13th Ave. E. in West Fargo. David Samson / The Forum

Work stations are distanced at Men’s Hair Co. located at 855 13th Ave. E. in West Fargo. David Samson / The Forum

Men’s Hair Co. made the improvements to their shops before hearing about the grant program in July. Rinehardt said the company applied for grant funds in August and received the funds in September.

“The process overall was great,” he said. “The Department of Commerce did an excellent job with some lead-up conference calls to communicate with the group.”

Roughly 60% of the funds Men’s Hair Co. received were used to reimburse its COVID-19 mitigation expenses.

“It’s been a huge benefit to be able to recoup some of those expenses that we weren’t expecting to ever see again,” Rinehardt said. “We just knew we had to do it to get our stores reopened and have that safe environment.”

Even before the cities of Fargo and West Fargo implemented mask mandates, Men’s Hair Co. required patrons and employees to wear masks. It’s why Rinehardt described Burgum’s reversal of a quarantine mandate for close contacts of COVID-19 positive individuals as a “huge game-changer” for the business.

“That’s been a huge help for us because we’ve had plenty of employees that are completely healthy and test negative, they still had to quarantine because a customer was in our store and was positive,” he said.

Without an actual storefront, Bismarck-based Exceptionally Nuts is anticipating the return of large-scale events to bring customers back, owner Marisa Iverson said. Exceptionally Nuts operates out of the Bismarck Event Center, which over the past six months has been the site of COVID-19 testing instead of its typical slate of concerts and sporting events. While Exceptionally Nuts has maintained its online shop and wholesale operations to Pride of Dakota retailers, events are its largest source of revenue.

“In-person events are our bread and butter,” Iverson said. “We are able to see a large group of people in a small amount of time, so we really thrive on those large-scale events.”

Iverson’s business ground to a halt once the pandemic took hold and canceled highly profitable events such as the North Dakota State Fair, she said.

“We were in the thick of business when all of a sudden we were shut down,” she said. “We went from 90 mph to basically everything shut down.”

RELATED:

The retail and hospitality industries, two of the sectors devastated by the sudden downturn in business, were a large portion of what Leiman termed a “diverse mix” of applicants. “From an aggregated perspective, naturally retail and hospitality were our biggest benefactors,” he said.

Because of the way the program was designed, though, other industries have been able to take advantage of the funds.

“We wanted to ensure supply-chain resilience, so manufacturers were able to apply for dollars to protect their employees,” he added.

Also among “heavy requesters” have been dentists, ophthalmologists and day cares, Leiman added.

“Who wants to go to a dentist when there’s nothing but flying aerosols or who wants to see an eye doctor when you have to put your face on something?” he said.

Although the department is no longer accepting applications, there are still more funds to be allocated.

“We’re not done with the grant program yet,” Leiman said. “We still have another 500 applications or so to go through.” In total, the department received $96.5 million worth of applications.

Because the Economic Resiliency Grants’ funds have already been appropriated, it’s possible another round of applications may open, primarily focused on the hospitality industry. The department will need to determine how much is left over after the remaining 500 applications are reviewed and whether or not there are leftover CARES Act funds.

“We’re working right now with Gov. Burgum’s office as well as key stakeholders and legislative leaders on what a next round could potentially look like,” Leiman said.

The Emergency Commission convened Friday, Oct. 23, and authorized that the approximately $25 million remaining Economic Resiliency Grant funds and an additional $29 million be used for the hospitality industry. The move will support more than 3,000 food and beverage establishments, entertainment venues and professional production companies, the Department of Commerce said. Businesses can apply for $25,000 in grant funds per location, up to $75,000.

Should more CARES Act funds come available, the Department of Commerce will need to act swiftly.

“We won’t really have a choice,” he said. “The CARES Act funding is dictated by the federal government, so we have to move as quickly as possible on it.”

Iverson said that Exceptionally Nuts received its funding in mid-September, roughly two weeks after submitting an application.

“The Department of Commerce did an excellent job as far as educating people,” Iverson said.

With funding secured, Iverson ordered masks and plexiglass shields for her employees, meeting the grant’s goal of both COVID-19 mitigation and building consumer confidence.

“Once we are able to get back to work, our customers are going to have peace of mind knowing that it’s the safest possible environment,” she said.

Not receiving the funding “would’ve just set us back even more,” Rinehardt explained. “We weren’t expecting it when we reopened, we just knew we had to make sure that we were going to be as safe as possible for our staff and clients.”

“At the end of the day, business is still good for us,” Rinehardt concluded. “It’s just a matter of being patient and getting through this whenever it ends.”

Source Article