Santa Ana City Council members are committing $1.5 million to help bail out downtown’s Fourth Street businesses pummeled by construction work for the upcoming OC Streetcar.

A majority of council members plan to later double that amount to $3 million. 

Once they find the funding source for it. 

The money will also cover some lost sales for street vendors and pushcart businesses.

“The question I get asked every day is, ‘Ana, how am I gonna pay my rent?’ ‘Ana, how am I gonna survive this?’ And I don’t have any answers for this,” said Ana Laura Padilla, owner of a personal accounting service and Perla Mexican Cuisine in the area, during public comments before the City Council’s decision at its Tuesday night meeting. 

“I have already called more than 15 lenders to ask for a grace period to pay for March rent for all these business owners,” she said. “I have no idea how we’re going to survive the next couple months.”

Yet some in town wonder whether an enhanced commitment of direct dollars toward downtown’s economic interests will come at the expense of other city investments and priorities.

Some also question how city leaders will reconcile their advocacy for Fourth Street’s bottom line with other areas that are also impacted by the streetcar’s development but don’t drive commerce in the city’s urban core. Construction work has also disrupted areas along Bristol Street and the Artesia Pilar neighborhood.

Downtown Santa Ana on March 2, 2022. Credit: JULIE LEOPO, Voice of OC

Meanwhile, City Manager Kristine Ridge said the approved $1.5 million was supposed to go toward economic development activity for businesses along the South Main Street corridor, currently sited for infrastructural and aesthetic enhancements. 

“Because the timing of South Main Street is further down the road, staff is comfortable recommending economic development use of the $1.5 million for this urgent need,” Ridge said.

Council members at their Tuesday night meeting voted 5-2 in favor of later doubling the assistance money, with Thai Viet Phan and Jessie Lopez dissenting.

Phan said she’s not ready yet to commit more public dollars toward the fund beyond the $1.5 million already proposed – dollars that had yet to be located within the city budget.

Meanwhile, Lopez looked at the precedent:

“Is it okay for me to assume then that down the road we’re’ gonna do something like this for South Main Street businesses?” she asked before the vote.

City staff is expected to bring another $1.5 million back for council members’ approval, per their direction Tuesday, at a later date – possibly April – when staff locates money in the city budget to be redirected toward the fund. 

With the $1.5 million already approved, eligible businesses may receive up to $10,000. 

To qualify, a business must rely on “foot traffic flow as their main source of revenue, such as retailers, restaurants, and personal care services,” according to a staff report. 

Staff say the financial help will go off a “tiered” system, the first tier being businesses directly adjacent to construction on Fourth Street and the second being businesses with a storefront entrance within 100 feet of the Fourth Street construction zones. 

The council’s help comes seven years after the Orange County Transportation Authority (OCTA) took the lead on the 4.15-mile streetcar project, which expects to carry passengers through Fourth Street in downtown Santa Ana in 2024.

Over those same years, advocates for downtown merchants have long called on the transit agency and city officials to protect merchants from the vexing road closures, dust, and noise spurred by the construction along an area known better by longtime locals as La Cuatro.

At their Tuesday night meeting, council members slammed OCTA officials for ignoring repeated demands for things like better signage, promises of round-the-clock security, and putting their own money into a business assistance fund.

Asked about OCTA chipping in, agency spokesperson Eric Carpenter said most of the funding for the project, which comes from the Federal Transit Administration, is restricted in use.

The Federal Transit Administration “limits spending of federal funds to the construction of the OC Streetcar project and does not allow for direct financial assistance to individual businesses,” Carpenter said in a Wednesday email.

The city council’s move comes three weeks after protesting downtown merchants climbed dirt mounds, blocked tractors, and occupied the project’s dirt pit construction zone in the middle of Fourth Street, desperate and seemingly out of options.

[Read: Downtown Santa Ana Small Business Owners Block OC Streetcar Construction Over Lost Profits]

Business owners and community members took to the construction site to protest the street demolition and demand help from the city of Santa Ana and transparency surrounding OCTA funds meant to help businesses impacted by the streetcar construction. Credit: JULIE LEOPO, Voice of OC

Phan lambasted OCTA officials.

“They’re causing the problems, they’re causing the pain, they’re the ones who are slow … they’re the ones who aren’t providing security and the city and taxpayers are the ones stuck with the bill,” Phan said before the vote.

Councilmember David Penaloza apologized to merchants for feeling the need to come back to advocate for themselves “again.”

“The (merchant) advertising OCTA has provided is terrible,” Penaloza said. “Half the banners are an advertisement for the streetcar which we all know is coming … then you get ‘businesses are open’ in tiny letters underneath …”

“There’s no reason we need to be going around in circles here,” Penaloza said.

“I​​’ve seen transportation projects throughout this region that always include assistance to businesses impacted by construction. Why this project does not have that included is amazing to me,” said Councilmember Phil Bacerra.

Bacerra noted the crews working for OCTA’s project contractor, Walsh Group, are “leaving their equipment outside with no security” and questioned how security showing up late at night on weekends will stem safety concerns.

“And I’m hearing from many folks in downtown that security is not even showing up or even if they are they’re not even patrolling,” Bacerra continued, adding signage that is out there for businesses is “not secured” and is “being used to break windows.”

Though council members also aimed their ire at City Hall staff for persisting safety and cleanliness issues at downtown’s city-owned parking structures – a key feature for the shops – which the city has long charged visitors for. 

“I can’t tell you how many complaints I’m getting about parking structures, whether it’s cleanliness or safety issues,” said Bacerra. “While I do want to point the finger at OCTA – they need to get act together – we need to do the same. We’ve gotta step that up, especially the fact that … those parking structures are essential, they’re vital for folks” to get into the downtown area.

In response, Ridge said her staff has boosted security in parking structures as well as offered free parking from 7 a.m. to 5 p.m. Monday through Friday. 

The city will still charge people after 5 p.m., and will still charge people on the weekends after one free hour.

“We’re also reaching out to the County of Orange to determine if they have anything further than just the micro, $2,500 business grants,” Ridge said.

Council members like Bacerra said the $1.5 million isn’t enough. 

Councilmember Johnathan Ryan Herndanez proposed the increase to $3 million on Tuesday, citing “growing demand” by merchants for whom the current $10,000 per business “is not gonna allow any business in downtown to sustain.”

Phan questioned where this additional money would be located.

“I fully understand where you’re coming from regarding approving the $1.5 million and having staff come back with another $1.5 million, but I’m not ready yet, I’m not there yet, and it’s not because I don’t support additional funding, it’s because I really want us to see what our budget will look like.” 

Especially, Phan said, as the city’s financial surplus “is not a sure thing.”

Mayor Vicente Sarmiento said, “I know once that $3 million is exhausted, we may be back here again. Everything we use is taken from somewhere else in the city. If we see it (used) for downtown, it could be at the detriment of (businesses along) South Main, at the detriment of Bristol.” 

“We have to find ways that are equitable,” Sarmiento said.

Members of the public who tuned in on Tuesday also had thoughts. Maria Ceja, an urban planner and self-described community advocate in town, acknowledged that officials are including street vendors in their assistance fund, reacting to the council vote after the meeting.

Many of the protesters who occupied the construction zone along La Cuatro have also done business in the area for years and say they don’t exactly fit the image of urban hotspots that they say some in town want this area to be known for. 

Still, Ceja said, “I’m just curious to know how other businesses along the fixed guideway had to adjust to the construction when they were facing it, particularly the businesses along Santa Boulevard & Bristol.”

“I’m also wondering what residents adjacent to the guideway have felt during its construction,” Ceja said.

Sarmiento before the vote said “it’s easy to say these are things we need to correct … all of us have seen this project coming for years. This isn’t a surprise.”

Council members like Nelida Mendoza suggested that Sarmiento, who sits on OCTA’s board, pressure his transit colleagues to pitch in OCTA dollars toward the fund at their next meeting. Her suggestion was met with applause from the chambers. 

Sarmiento later responded that he’s just one of twelve board members. 

Though he similarly criticized the streetcar construction work progress. 

“This is the first streetcar they’ve ever built in OC … the contractor they selected years ago is part of the problem, but we can’t do anything about that now because the project is already 60% completed so to pull out is nearly impossible,” he said. “All we can do right now is make things as survivable for everybody as possible.”

Phan questioned whether OCTA’s governmental structure allowed transit officials to commit money for such a purpose.

Still, Penaloza reminded everyone of the board’s next meeting date. 

“The next OCTA board meeting is, indulge me mayor, March 14 at 9 a.m. just down Main Street.”

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