The Oak Park Economic Development Corporation (OPEDC) has submitted a letter to the Oak Park village board requesting $500,000 of the village’s American Rescue Plan Act (ARPA) money to fund an equity-focused local business assistance grant program. The village of Oak Park has been allotted a total of $38.9 million through ARPA.
Dated Dec. 18 and signed by OPEDC Executive Director John Lynch, the letter states “the program specifically supports Black business owners and recognizes the historic lack of access to capital that holds Black entrepreneurs back from realizing their entrepreneurial aspirations.”
Lynch, who is on vacation, was unavailable for comment.
According to the OPEDC letter, the program was “intentionally structured to fill larger funding gaps and support the kinds of projects that may not traditionally have the start-up capital to get underway.”
Through the program, as detailed in the letter, OPEDC intends to provide forgivable loans to eligible local Black businesses looking to establish a new physical storefront or expand into an adjacent or additional storefront. Loans can be for up to $50,000 per eligible business, with an additional $50,000 available for commercial kitchen buildout projects.
“Storefront businesses often require additional financial cushion to help them respond to the inherent challenges of operating during the modern climate of internet competition, staffing challenges, and high rent and property tax burdens,” the letter reads.
OPEDC recommended the village reserve the right to modify loan eligibility criteria over time but proposed the following conditions: applicant businesses must be 75 percent Black-owned; more than 50 percent of revenue must be derived from the sale of goods subject to sales tax and, if applicable, liquor tax; and the applicant contributes equity funds totaling at least 5 percent of project cost. Additionally, the business owner must prove financial need for the loan to complete the project. If total project cost to commence business operations exceeds the equity contribution plus the forgivable loan, the applicant must also “demonstrate sufficient additional funding to fill project requirements and open or expand the business.”
As proposed, the loans could be either partially or fully forgivable. For full loan forgiveness, the applicant must continue to meet program guidelines and the storefront must stay in operation for five years. If the storefront fails to stay open for those five years or the applicant does not abide by program guidelines, the forgiveness amount would be based on “a pro‐rata calculation of the time in business as a percentage of the 5‐year threshold, rounded downward to the nearest year.” Finally, for the loan to be forgiven in any amount, the applicant must be in good standing with the village of Oak Park regarding licenses, permits and fees.
The OPEDC request falls in line with guidance from the U.S. Department of Treasury related to recovery fund disbursement. Recognizing that COVID-19 pandemic has had a disproportionate impact on certain communities, the U.S. Treasury is urging recipients to use recovery fund payouts to support those communities. U.S. Treasury guidance published Nov. 15, states that “recipients are encouraged to design projects
that prioritize economic and racial equity and promote equitable outcomes.”
All matters related to ARPA funds must be discussed by the village board of Oak Park, which has committed to engaging the community in allocation decisions. As the village board had its last meeting of the year on Dec. 6, it is unclear when the OPEDC’s request will be discussed. However, the village is required to have its entire $38.9 million share of ARPA funds committed for spending by Dec. 31, 2024 and spent in full by Dec. 31, 2026.