Overland Park eyeing $3 million grant program for hospitality businesses with federal COVID money

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Overland Park is considering allocating $3 million of its federal relief money to a grant program for hospitality industry businesses. The grants might be targeted at efforts to help retain employees, such as child care services, sign-on bonuses or incentives to remain with the employer. File photo.

Hotels, restaurants and other Overland Park businesses in the hard-hit hospitality industry will likely become the next priority to get federal help from the American Rescue Plan Act, a city council committee has decided.

Council members in the six-member Finance, Administration and Economic Development Committee have given the go-ahead to begin developing a plan to spend $3 million for hospitality-related businesses that continue to struggle from losses during the pandemic shutdowns last year. That would be part of the $18 million the city has in the pipeline in Rescue Plan money.

The money comes out of the $9 million the city has already received. Overland Park will get another $9 million next May. Officials now have to develop a set of criteria on who will get it. The committee decided Wednesday to work with AltCap or its subsidiary the Community Capital Fund to settle the details of administering the fund

Under federal rules, the city must obligate the money by the end of 2024 and spend it by the end of 2026.

Grants could be up to $50,000 per business

Plans are still in the formative stages, but staff has recommended a sliding scale for the grants, with a maximum of $50,000 per business. Some staff suggestions for how the money could be used include efforts to help retain employees, such as child care services, sign-on bonuses or incentives to remain with the employer.

“The number one issue that my team hears when they’re talking to businesses here in Overland Park is that they’re struggling to retain talent and struggling to hire people,” said Tracey Osborne Oltjen, president of the Overland Park Chamber of Commerce.

One of the biggest details yet to be worked out is eligibility. Some committee members said they were particularly concerned that local businesses get the grants, particularly those that did not get money in earlier rounds of pandemic relief.

Councilmember Fred Spears cited restaurants as an example. “I want to make sure that these moneys go to the franchises that are owned locally rather than an xyz restaurant that’s owned by a major corporation.”

Councilmember Logan Heley added that social equity should be considered in outreach and allocation of the money.

With some businesses in downtown Overland Park reporting improvements now that pandemic restrictions have eased, Councilmember Paul Lyons wondered whether there is still significant need for more aid.

“We’ve had a lot of programs since the COVID pandemic started,” he said. “We’re at a point in this pandemic and the economic recovery where I wonder whether we’re past this.”

But city planning and development director Jack Messer said businesses have already indicated a lot of interest in this round of aid. Osborne Oltjen said hotel owners are still trying to regain footing after losing 18 months of revenue. Some owners now have second mortgages or were forced to move into their hotels, she said.

“The struggle is still very real for them,” she said.

Messer told the committee the staff hopes to use lessons learned in earlier aid given through the Community Development Block Grant program. There were stricter limits on the block grant money that resulted in some businesses’ needs not being met, he said. The Rescue Plan funds should be more flexible in part because they do not have income guidelines.