The Northfield Economic Development Authority on Thursday green lighted a reimbursement program to help Northfield restaurants and retailers transition to more of an e-commerce format in the wake of COVID-19.
Companies within city limits with 20 or fewer full-time equivalent employees are considered eligible for grant funding, which consists of 50% of costs associated with e-commerce investment, with a maximum $1,500 allocation. Applicants must demonstrate how the e-commerce format will be achieved, and the applicant is responsible for covering all upfront costs. Reimbursement for previous investment in e-commerce tools is retroactive to March 15.
Businesses must demonstrate they have been operational since Jan. 1. Applications will be accepted in June and come on a first-come, first-serve basis. EDA reserves are expected to fund the $15,000 program cost.
“The need for e-commerce has become vitally important for businesses to compete in the current economic environment,” according to the proposal submitted by the Community Development Department. “However, many small businesses do not possess the time or skills necessary to launch a successful e-commerce platform. In some cases, e-commerce platforms may be cost prohibitive depending on the scale of the business.”
Economic Development Coordinator Nate Carlson said it can cost up to $6,000 for businesses to add a quality online feature, and the prospect can create additional costs in hiring someone to manage e-commerce.
“It’s a great use of our funds in the near term,” said EDA board member Mike Strobel.
In discussing the need for more specialized local funding for businesses seeking to survive during the pandemic, Carlson said federal, state and county governments have already approved business assistance grants. Based on that knowledge, the EDA is seeking more of a long-term approach.
EDA board member Jessica Peterson White said as a retailer, she wouldn’t advise business owners to immediately spend a significant amount of money developing a larger e-commerce presence. Instead, she said a more attractive course of action is using less costly tools to develop an online presence.
Despite that, she said she wasn’t opposed to the program, adding she believes there are a lot of businesses that could use the program.
Board member Britt Ackerman said she supports the proposal because it addresses an identified e-commerce need and could make a major difference for small businesses with a lack of capital.
EDA discusses other options to stimulate economy
The EDA discussed closing portions of downtown streets and allowing restaurants to set up picnic tables as Gov. Tim Walz continues to limit indoor restaurant seating to combat COVID-19. The EDA also discussed offsetting costs associated with outdoor dining. Even if that happens, businesses will still likely be facing expenses in creating an outdoor dining environment, raising feasibility questions.
Community Development Director Mitzi Baker said discussions have taken place on extending liquor licenses to include dining in public rights-of-way.
She said she expects a proposal will be brought to the City Council next week.
The EDA is expressing interest in hosting a session to listen to the needs of the cbusiness ommunity. Peterson White also suggested creating a working committee to handle pandemic-related business needs.
There is evidence of a need for business funding. Carlson said local banks have seen more than 300 applications for the federal Paycheck Protection Program. As of Thursday, only two counties in Minnesota have been able to access federal CARES act funding: Hennepin and Ramsey in the Twin Cities. Rice County isn’t expected to receive its allotment until the Legislature decides how to allocate the money, which is not likely until a special session begins.