In light of the unprecedented social and economic disruptions created by the COVID-19 pandemic, City Council has extended a previously established Rent Deferment Program, meaning tenants in city-owned properties will have until June 30, 2022 to pay back their dues.
Originally established in April 2020 in accordance with the City’s emergency orders, the City’s Rent Deferment Program protected those who lease or license City-owned properties from eviction and allowed them to defer any rents owed for the period of April 2020 through March 2021.
“This discussion regarding rent relief built upon the many efforts the city has been taking over the last year to address the impacts of COVID on our community,” Economic Development Manager Jennifer Taylor said this week. Along with the waiving of late fees and any interest penalties that have been accumulated, the program has deferred approximately $5.3 million in rents for the 60 tenants enrolled in the Rent Deferment Program across all funds.
The deadlines for repayment depend on the classification of the tenant though some small retailers, restaurants, food vendors and others covered under the commercial eviction moratorium would have had to start paying monthly rent on April 1 and any deferred payments would begin on July 1, according to Taylor, who said she and other city leaders have recognized that it’s going to be nearly impossible for many tenants to pay full rent on top of the deferred payments, which is why staff proposed an extension to the program.
Following Council’s approval Tuesday, city tenants will have some or all of their rent deferred, City Attorney George Cardona said. “And then the repayment period would expire June 30, 2022, and that’s obviously subject to staff coming back with additional suggestions in the future.”
Councilmember Kevin McKeown said one of the suggestions he would like to see is how Council can actively get additional funds to local businesses beyond simply deferring rent payments.
Gleam Davis shared similar worries and asked if it was possible to tell businesses they city would be flexible for repayment beyond the deadline.
“I do want to express to the businesses that we are open and perhaps even inclined to move that date,” Davis said, “because I think… if they have any sense that we’re going to put their feet to the fire on that date, we’re gonna lose them.”
Councilmembers agreed and said they’d be open to any ideas that would help tenants throughout the city, which is part of the reason why it also opted to suspend rent increases in fiscal year 2121-22.
Council also attempted to earmark American Recovery Act funds for small business recovery.
“I really do feel we need to allocate, you know, an amount of money for our city tenants and for small businesses,” Christine Parra said.
Interim City Manager Lane Dilg and others were hesitant to support the move since it would reserve a large chunk of the stimulus funds expected to come Santa Monica’s way before the exact amount has been determined.
Council agreed to hold off on tying a specific number to the motion but it did direct staff to return with a proposal and analysis on how city leaders can help all tenants in Santa Monica, not just those who lease or license city property.
“The reality is that it’s going to mean that the city brings in less money,“ McKeown said, “then there may be choices and sacrifices we’ll have to make to make this happen.”