Industrial Development Agencies in New York State can use their reserves to help coronavirus-affected small businesses and nonprofits under a new law.
Gov. Andrew M. Cuomo this week signed a bill into law that gives IDAs the authority to make grants and loans to businesses and nonprofits with 50 or fewer employees. However, the new power expires on Dec. 31, 2021, or when the coronavirus “state of emergency” is ended, whichever comes first.
The grants of up to $10,000 per applicant are for the purchase of personal protective equipment, or PPE, and “installing fixtures necessary to prevent the spread of COVID-19," such as safety shields, the law states.
Loans of up to $25,000 per applicant are to pay employee salaries, rent, utilities and other expenses during the pandemic. The loans are interest free and have a one-year term after a grace period.
The legislation was adopted overwhelming by the State Senate and Assembly on May 27; the only "nay" vote came from Assemb. David DiPietro, a Republican from a Buffalo suburb, according to official votes tallies. The bill was signed on Wednesday by Cuomo, who generally has opposed any expansion of IDAs.
Another IDA critic, Sen. Todd Kaminsky (D-Long Beach), said the new law would “make it easier for our downtowns to bounce back” from the three-month shutdown of nonessential activity to slow the virus’ spread.
IDAs across the state have reserves of millions of dollars, which come from fees charged to developers seeking IDA tax breaks, not taxpayer dollars.
“Many IDAs have a lot of cash that can now be used to help retailers and other small businesses get through this crisis,” said Nassau County IDA chairman Richard Kessel, who championed the legislation. Nassau’s reserves total about $2 million.
Last month, he appointed a committee of IDA board members and staff to design a program of grants and loans.
On Long Island, besides the Nassau IDA, there is the Suffolk County IDA and IDAs in Glen Cove and the towns of Hempstead, Babylon, Brookhaven, Islip and Riverhead.
Advocates for downtown businesses said the new law offers another avenue of financing as small businesses and nonprofits exhaust funds from federal Paycheck Protection Program loans or didn’t receive federal help.
“The federal money trickled on small businesses, it didn’t trickle down to them,” said Robert G. Fonti, a property manager and co-chairman of the Long Island Business Council, which lobbies government on behalf of entrepreneurs. “This new program must be from the ground up. People are really struggling.”