Small business owners in Menlo Park now have one less thing to worry about in the middle of a global pandemic: Between now and the end of May, they won't be kicked out by their landlords for not paying rent.
The Menlo Park City Council voted unanimously Tuesday night to adopt a moratorium on evictions for small businesses and nonprofits, including religious institutions, that have gross receipts of less than $2.5 million. The ordinance took effect immediately.
The ordinance, set to last until May 31, may be extended. After the ordinance ends, tenants will have 90 days to repay the rent, with the possibility to extend the deadline to 180 days. In that time, tenants will have the chance to apply for some of the small business relief programs and loans now being offered.
The ordinance is based on one adopted recently by the San Mateo County Board of Supervisors that applies to businesses in unincorporated county areas like North Fair Oaks and West Menlo Park.
The city's ordinance also includes a "hardship waiver," in which a landlord may ask to be exempted from the moratorium. The City Manager, Starla Jerome-Robinson, would be in charge of deciding whether to grant the waiver.
Tenants that can pay must continue to do so, and if they can't, they have to demonstrate that they are unable to do so because of circumstances related to COVID-19.
The decision to include churches in the ordinance was a policy raised by Mayor Cecilia Taylor, who said she's been in discussions with nine local pastors and religious leaders in her council district in Belle Haven. The discussions represented the loose formation of a "council of churches" that she convened to help spread information to her district about the coronavirus. She suggested that other council members could do similar outreach to the church communities in their districts.
Most of the local churches own their properties, said Interim City Attorney Cara Silver. However, Taylor said that three of the nine churches she has been in contact with rent their spaces, so she asked that small-scale churches be included for eviction protection as well.
The impact of the ordinance is somewhat limited by the fact that the California Judicial Council announced April 6 that it won't move forward with legal proceedings for evictions unless it's a timely matter of public health and safety.
Acknowledging the courts' decision, Councilman Ray Mueller said that the council is, in effect, just stopping the procedural part of an eviction for a limited amount of time.
It wasn't immediately clear how many businesses, nonprofits and churches in Menlo Park will be eligible to benefit from the ordinance.
Fran Dehn, president and CEO of the Menlo Park Chamber of Commerce, said she believed that the majority of downtown businesses lease, rather than own their properties.
The California legislature considers a business with gross receipts of $2.5 million a "microbusiness." And the U.S. Small Business Administration uses different specific definitions of what counts as a small business, based on industry, and those revenue limits are generally more inclusive than the city's limit. The city of San Mateo set the eligibility limit for a similar ordinance to halt small business evictions 10 times higher, at $25 million.