As part of its ongoing economic recovery plans, City Hall will debate rent relief for tenants of city owned properties on Tuesday.

The City’s Rent Deferment Program was established in April 2020 in accordance with the City’s emergency orders, which implemented a temporary moratorium on evictions of commercial tenants. Under the program, those who lease or license City-owned properties and who are unable to pay rent due to financial impacts related to COVID-19 are protected from eviction and may defer rents owed for the period of April 2020 through March 2021.

The program waives any late fees and interest penalties and requires participants to repay all deferred rents by September 30, 2021, according to a staff report, which detailed, collectively, the City has deferred approximately $5.3 million in rents for the 60 tenants enrolled in the Rent Deferment Program across all funds.

With the Commercial Eviction Moratorium set to expire on March 31, 2021 and the associated deferrals under the Rent Deferment Program currently required to be repaid by September 31, 2021, the report adds, “Council’s direction is needed at this time because many of the City’s small business tenants have expressed the need for financial support beyond the deferrals currently offered through the Program.”

Proposed actions include extending the rent repayment window, potentially allow tenants to exit their leases early, possibly forgive rents to some tenants entirely and prioritize aid to arts tenants at Bergamot Arts Center.

The City’s Community Development Department, Economic Development Division, manages 750 City properties, including concessions on the beach, restaurants and vending carts on the Pier, and kiosks on Third Street Promenade, and since a significant sector of Santa Monica’s economy relies on tourism, specifically international visitors, many local businesses have suffered as a result of safer-at-home orders.

“While the Federally funded CARES Act created programs such as the Paycheck Protection Program (PPP), Economic Injury Disaster Loans (EIDL), and Emergency Economic Injury Grants (EIDL Grants) to help struggling businesses, many tenants shared they did not qualify for the assistance or did not apply to avoid incurring additional debt obligations,” the report reads. For this reason, staff is recommending additional time for tenants to repay deferred rents as well as the suspension of rent increases from July 1, 2021 to June 30, 2022.

Because the General Fund revenues are not projected to return to pre-COVID levels for some time, the staff report concludes, “If Council approves the recommendations in this report, funding would likely be covered by stimulus funds as the City does not have other sources to cover deficits to the General Fund, Pier and Beach funds at this time.”

Economic impacts of aid vary based on where and how much Council could approve.

Council will meet at 5:30 p.m. on Tuesday March 23 for a virtual meeting. The open session will begin no later than 6:30 p.m. Visit www.smgov.net for more information.

brennon@smdp.com