Murray calls for creation of stabilization fund for Central Area businesses during 23rd Ave. construction

Mayor Ed Murray announced that he will work with the City Council to create a new business stabilization fund to assist local businesses affected by delays and extreme construction impacts from the 23rd Ave. road reconstruction project.

Murray also directed City departments to conduct a new evaluation through a race and social justice lens to determine if the project should continue as currently designed and whether it would lead to significant displacement of local businesses. SDOT will also conduct a review of the construction phasing and schedule to consider other ways to proceed with construction of the project to have less of an impact.

“I’ve gone to 23rd Ave. and inspected the project, and I’ve met with several of the small, family-owned primarily minority-owned businesses in the area. It is obvious that the project is having serious impacts on those businesses. It is obvious that they need help. That is why today I’m proposing the creation of a business stabilization fund to help those businesses survive,” Mayor Ed Murray said. “I’ve heard allegations from some members of the community that the work on 23rd is really an attempt to push out the existing, largely African-American owned businesses to pave the way for the gentrification of the neighborhood. That has never been the intention. This project is supposed to provide better and safer infrastructure so the community can grow and thrive. But given those allegations, the City will make a new assessment of the project to examine carefully its race and social justice impacts, to ensure the project actually benefits the community. If it does not, we will end it.”

Working with the City Council, the Mayor will propose a new 23rd Ave. business stabilization fund focused on assisting locally-owned small businesses that have struggled the most during the project, with an emphasis on low-income business owners and those in danger of displacement.

“I whole-heartedly thank the Mayor for working with the City Council on this issue, and Councilmember Sawant for bringing this issue to the Council’s attention,” said Councilmember Lisa Herbold. “Tomorrow at 9:30 a.m., the Civil Rights, Utilities, Economic Development, and Arts committee will facilitate a conversation with SDOT and the Office of Economic Development to learn more about mitigation options available for stabilizing the Central Area businesses during the 23rd Ave. construction.”

“Small businesses – especially those owned by people of color, women, and the LGBTQ community – are often left out of the political calculus of City Hall. Through organizing and activism, the 23rd Ave. small businesses have won mitigation,” said Councilmember Kshama Sawant. “I want to thank the Mayor and Councilmembers for working with me on this issue.”

“I appreciate the Mayor finding the resources to respond to the businesses who are struggling right now. As the city grows and changes, it is critical we do so in a way that doesn’t displace our longstanding businesses and residents,” said Councilmember Mike O’Brien. “As chair of the Sustainability and Transportation Committee, I look forward to working with the Mayor to examine our policies going forward to mitigate the impacts to local businesses during major transportation infrastructure projects.”

The potential revenue sources for the stabilization fund are twofold:

  • $400,000 in federal Community Development Block Grants (CDBG) dollars that have already been allocated to the City can be made available on a one-time basis without disrupting other City funding priorities; and
  • Up to $250,000 in funding that can be made available from the Seattle Investment Fund, which was established to award and oversee federal New Market Tax Credits in support of local development projects. The Fund earns fees through the allocation process, and support to distressed businesses is consistent with the Fund’s purposes

In addition to the new stabilization fund, Mayor Murray ordered that all affected businesses on the 23rd Ave. corridor, for the duration of the project, will be eligible for deferred payment of bills and fees, including:

  • City utility bills,
  • Annual Business permits,
  • Annual signage permit fees, and
  • City portion of B&O tax.

Under the Washington State Constitution (Article VIII, Section 5 and 7), local governments are prohibited from gifting local tax dollars to private entities. The new 23rd Ave. stabilization fund announced will use federal CDBG dollars and New Market Tax Credit fees which are not subject to this prohibition. A past example of when Seattle used CDBG dollars to assist local, low-income and minority owned businesses was in the Rainier Valley to create the Community Development Fund during the construction of light rail along Martin Luther King Ave. in 2006-2009.

The new stabilization fund is being proposed by the Mayor in recognition of the unexpected and significant disruptions from the construction project after it began. In the fall of 2015, a design error by a private vendor resulted in a three month delay. This delay caused changes to the originally planned project phasing. Instead of a multi-phase project where new city blocks would not undergo lane closures until previous blocks were re-opened, the result is that more of the corridor is currently under construction at one time. This represents significant and new impacts to the neighborhood, such as limited access to more storefronts at once and a greater decline in foot and car traffic than originally anticipated and promised to the community.

The proposal of a new stabilization fund also reflects the City’s renewed commitment to equitable development. According to a 2015 Growth and Equity analysis the Central Area is considered an urban village that is particularly at high-risk of displacement factors.

Designed in 2013, the 23rd Ave. improvement project was intended to improve safety and mobility for drivers, pedestrians, transit users and bicyclists. It was to include wider sidewalks, improved transit speed and reliability and build new street lights. To take advantage of another capital need, a 100 year old water main was to be replaced at the same time as the road project so the neighborhood would not have to undergo multiple construction projects. Before construction, 23rd Ave. reported 900 collisions in five years (4 fatalities), had narrow and uneven sidewalks, was rated “very poor” for pavement conditions.