Charlottesville is establishing a fund to provide low-interest loans to minority-owned businesses.
City Council unanimously approved up to $109,000 to establish a business equity fund at its meeting on Tuesday.
“This was a huge step for us in terms of equity and economic equity,” said Councilor Wes Bellamy.
The fund will be administered by the Community Investment Collaborative and provide loans to “socially disadvantaged individuals.”
Eligible applicants are defined as those who “have been subjected to racial or ethnic prejudice or cultural bias because of their identity as members of a group. Social disadvantage must stem from circumstances beyond their control.”
Bellamy, who led the initiative, said it would “level the playing field.”
“I think it would be a tremendous asset to the community especially as we have been making strides in addressing equity,” he said.
The proposal was originally to allocate $100,000 at the CIC’s typical interest rates that range from 6 to 9 percent.
CIC President Stephen Davis said the interest rate goes to cover administrative costs.
Councilors decided to cap the rate at 3 percent and allocate up to $9,000 in additional funds to cover administrative fees so CIC could offer a lower rate.
Davis said 97 percent of CIC loans are repaid.
“Our loss rate could go up, but we would be comfortable if we’re giving people a chance and making more of an impact on the community,” he said.
Loans would be between $5,000 and $35,000 over six months to five years.
Some councilors were hesitant to pass anything because several changes were made to the original proposal during the meeting.
“I think right now it’s really important that we have a clean document in front of the public so they see what we’re voting on,” said Councilor Kathy Galvin.
Councilors asked if there was a rush to approve the proposal and Bellamy said he will be attending an upcoming minority business breakfast and “I want to be able to let them know that, yeah, this has passed.”
Councilors agreed to approve the allocation and will consider the donation agreement, which includes the terms of the loans and interest rates, at its next meeting.
City Council also received a written report on a proposed priority-setting commission determining how Charlottesville contributes to nonprofits.
Last month, councilors deferred action on the proposal and expressed concern for a work session with nonprofits, the people they serve and city staff about the Agency Budget Review Team process.
The commission is an extension of an effort by Mayor Nikuyah Walker to study the process for city funding of nonprofits, which largely has contributed to organizational operating costs.
The proposal was put on hold so staff can determine how to gather feedback, revise a resolution, create cost estimates and schedule a work session.
The report says staff members plan to conduct community outreach in March and will hold a meeting with the Center for Nonprofit Excellence on Feb. 21.
According to the report, an assessment on the community’s nonprofit needs could cost $80,000 to $100,000.
In other business, council received an update on a small area plan for the Cherry Avenue corridor.
The corridor, which spans from Ridge Street to Roosevelt Brown Boulevard, was identified in the city’s 2013 Comprehensive Plan as a target for a plan, which sets out methods for addressing housing, transportation, infrastructure and environmental needs. The city Planning Commission designated the area for the next planning initiative in 2016.
The Thomas Jefferson Planning District Commission is crafting the plan.
At a community meeting in August, residents said they wanted more sidewalks and parking spaces, and they were concerned about the effect of increasing density and rentals on parking. They also worried about increasing traffic in the area.
A final proposal will be presented to the Planning Commission in March.