In recent years, the city has paid out almost $60 million in aid to bolster small businesses hit hard by the pandemic and bond-related construction.
City council members and the mayor say even more needs to be done.
With money in the current year’s budget to address the same issues, the city’s Economic Development Department has come up with a plan for how to disburse another $1.4 million — before, during and after construction is completed.
That amount is “meager” in terms of the number of businesses in need, Mayor Ron Nirenberg said.
But, “I think our effort is better spent thinking about how we can shrink the timeline of these construction projects,” he said. “Can we use $1.4 million in a way that helps more businesses in a more substantial way,” like incentivizing contractors to work faster?
Brenda Hicks-Sorensen, director of the Economic Development Department, presented a construction mitigation plan to council Wednesday, saying previous grant programs made a difference, according to the department’s analysis.
Their data shows that grant recipients overall had a survivability rate 13% higher than non-recipients in construction corridors from 2022 to 2024, while accommodation and food services businesses that received grants had a survivability rate 25.5% higher than non-recipients.
“I’ve had literally business owners crying during my office hours because of this,” said District 1 Councilwoman Sukh Kaur, whose district includes South Alamo Street where construction has been ongoing since December 2022.
Kaur joined several other council members in saying city staff should do a better job of communicating with business owners about projects before they start.
“Small businesses in our community don’t believe that the city actually wants to help them, and quite frankly, it’s why some of them are gathering to try to actually recruit council people that they think can make change,” she said.
The city should be more nimble, Kaur added. “When folks come to us with challenges for things that they’re facing with the grant program, we say, this is the grant program that we created and we can’t change it.”
3 mitigation grants
Hicks-Sorensen proposed to the city council a new program with three components, each with a different purpose, eligibility criteria and buckets of money.
The Stabilization Construction Grant is modeled after a previous program that in 2024 made grants to small businesses affected by city-initiated construction projects for a year or more in areas where at least 10 small businesses were operating.
The program has been funded with $1 million.
Businesses eligible in 2025 include those situated on streets within the Zona Cultural, on the near western area of downtown, and along South Alamo Street. The city estimates 266 businesses could qualify for grants up to $35,000 each if they can prove net revenue losses in the past year.
Sorensen outlined a set of eligibility and scoring criteria, and also how the funds can be used, which ranges from payroll and benefits to working capital and critical operating expenses.
Another grant program is geared toward helping a business prepare for upcoming construction.
The Mitigation Construction Grant would provide enhanced marketing and promotion to small businesses that might feel the effects of city-initiated construction projects for a year in a corridor where at least 10 small businesses exist.
Only one project has been identified for this cycle — the Marbach Road Area Streets and Drainage Project, which is expected to start this fall and continue through 2029.
From the $80,000 budgeted for the program, grant awards of $2,000 will be available to assist up to 40 businesses with marketing and signage costs. Applicants will be required to submit a bid proposal for service along with payment receipts to confirm how the funds were spent.
A third grant program, known as the Accelerate Recovery Grant, is intended to help small businesses, affected by city roadwork, improve the exterior or interior of the establishment.
Eligible businesses are located on Bynum Avenue, Bulverde Road and Broadway Street, all of which underwent improvements completed in 2024.
Funded with $120,000, the program would award grants of $5,000 for up to 24 businesses.
“This could be if they need to do that power washing of the building, if they want to do some paint enhancements, new signage, seating,” Hicks-Sorensen said. “We’re affectionately referring to this as the spruce-up effort.”
The Stabilization and Accelerate Recovery grant applications open by May 1, with funds disbursed through August. The Mitigation grant application period starts June 2 with grants disbursed through September.
South Alamo Street
Councilwoman Phyllis Viagran (D3) and Councilman Jalen McKee-Rodriguez (D2) questioned why more corridors in their district were not selected for the program. “I need an answer on why so many South Side streets are not eligible, and why New Braunfels wasn’t eligible either,” Viagran said.
The challenges are citywide and felt by nearly all council members, they said. District Councilman Manny Pelaez pointed to a restaurant owner in District 5, Bo Jean Lim of Golden Star, whose business has faced a number of challenges and also received construction mitigation grant funding.
But it was the project on South Alamo Street in downtown San Antonio that prompted the most discussion. Kaur repeated a rumor that she heard the project would take another two years to complete when it was initially expected to be done before San Antonio hosts the NCAA Men’s Final Four, starting April 3.
“The project is not two more years,” said City Manager Erik Walsh. “I don’t know where the rumor came from.” The work is expected to be completed April 26, he added.
What is true, Walsh said, is that the street will be temporarily repaved and the sidewalks widened for the event which will bring an estimated 100,000 visitors to San Antonio.
“We are spending a significant amount of money overall for the Final Four,” he said. “The economic benefit … is [$440] million to the city over a three- or four-day period … From my perspective, making some temporary improvements to facilitate the safe passage of a whole bunch of folks, both residents and visitors, makes a lot of sense.”
Business is still open
Many businesses across San Antonio suffered losses in recent years, first by the pandemic and then due to construction zones that repelled customers.
As a result, the city has disbursed millions in aid under a variety of programs, including $29.5 million to “micro” businesses with fewer than 20 employees in 2020; $13 million in hospitality grants in early 2021; $15 million in Covid-impact grants in 2022, and a previous round of construction mitigation grants totaling $2.45 million.
The city also spent $400,000 in 2023 on related construction mitigation programs, including development and distribution of custom signs to let customers know the business is still open during construction.
The city also partnered with the nonprofit microlender LiftFund to loan out approximately $8 million to local small businesses.
Hicks-Sorensen proposed that the city again partner with LiftFund to administer the program, which would come at a cost of $185,000.
Council will consider and vote on the contract with LiftFund and the proposed plan at a future meeting.
