LA MESA WILL USE RELIEF MONEY TO AID NEW BUSINESSES

La Mesa is setting aside hundreds of thousands of dollars to launch dozens of businesses, potentially making it the only city in the region using federal relief funds to get new ideas off the ground.

An estimated 5.5 percent of local storefronts are vacant, a higher rate than the region’s, so local officials hope investing in entrepreneurs will fill those spaces, create jobs and increase sales tax revenue.

People can apply starting in June.

“What we’re trying to do is give these entrepreneurs the best possible start,” Assistant City Manager Carlo Tomaino said in an interview.

The City Council approved the spending plan 3-2 late last month. (The members who voted against it had opposed an unrelated part that gives bonuses to vaccinated city workers.)

La Mesa should receive more than $10.8 million from the American Rescue Plan Act, which the federal government passed last year, and the city will use $800,000 of that for the La Mesa Entrepreneurship Accelerator Program, known as LEAP.

While many places have helped existing businesses during the pandemic, La Mesa may be the first in at least Southern California to direct federal funds toward new businesses, according to representatives of local business organizations.

“I think it’s a pretty practical, pretty innovative approach,” said James Sly, president and chief executive officer of the East County Economic Development Council, which will oversee the program with La Mesa.

Regionally, Sly said, about 4.5 percent of storefronts and offices are vacant, based on a review last year.

Applicants do not have to live in La Mesa to be eligible, though their businesses must open within the city. Applications will be vetted by the development council, and the program’s 14-page plan says officials are especially interested in women and minority entrepreneurs.

Once approved, participants must commit to one-on-one advising sessions with one of the program’s mentors, who have decades of business experience, as well as classes with the Small Business Development Center. That could add up to a commitment of ten or more hours a week for months, depending on how complex the proposed business is, Tomaino said.

The workshops will likely include “Pitching Your Product to Retail Store Buyers” and “Business Loan Readiness,” among other options. They should last a few hours and take place in-person at city hall, local leaders said.

Participants will also be eligible to receive up to four $5,000 payments for rent, to hire staff or pay other expenses. The money will not need to be returned if the business ultimately fails.

“Entrepreneurship is risky,” Sly said. “Someone might do everything right, and the market just says, ‘No thanks.’”

While different businesses will require different levels of support, Tomaino said they should be able to support between 40 to 50 proposals.

The plan also calls for “prioritizing new business started in underserved communities.”

It’s unclear how many local businesses folded during the pandemic.

The county’s unemployment rate was slightly higher than the national average as of February, 4 percent to 3.8 percent, according to the U.S. Bureau of Labor Statistics. More than 12 percent of residents lived below the poverty line in 2020, U.S. Census data shows.

La Mesa’s program is scheduled to last through 2026.

blake.nelson@sduniontribune.com