These mom-and-pops—and along with them the distinctive urban villages they enliven—face a potentially devastating threat in the COVID-19 pandemic. For many, help has come in the form of a nimble little organization called RAIL (that’s for rail, arts, innovation, and livability) Community Development Corporation.
By midsummer 2020, just a few months into the pandemic, RAIL had provided technical assistance to more than 200 local businesses, the vast majority owned by people of color. With RAIL’s help these hard-put small-business proprietors of Mesa and Tempe had jumped through the various hoops required to access some $2.4 million in public funds—relief money that, perversely, flows more readily to bigger, richer companies well-served by banks, accountants, and lawyers.
RAIL is a decidedly place-based business development organization, and that feeds its core strength: “We are one of the only groups that does old-school door knocking, face to face, wearing your shoes out,” says Ryan Winkle, RAIL co-founder and board chair. RAIL’s first and only full-time employee, Executive Director Laura Suarez, had been in the position just five months when COVID-related business restrictions began in March. But she’s worked hand in hand with longtime consultant Augie Gastelum and board members like Winkle. “All of them love their city, know the light rail corridors, and are very involved,” says Suarez.
Making connections to meet a crisis
Early in the pandemic, a grant from U.S. Bank Foundation via LISC seeded RAIL’s effort, providing $20,000 to augment organizational capacity and $40,000 for dispersal as small grants to businesses in Tempe and Mesa. Also via LISC, Bell Bank contacted RAIL for help distributing federal Paycheck Protection Program (PPP) forgivable loans to underserved businesses in need. And when the City of Mesa, using funds made available by the CARES Act, started a program providing three months’ utilities and rent to businesses suffering COVID-related losses, says Suarez, “we called the city and said we would love to help, we want to reach out to places we know are not being reached.”
RAIL folks pounded the pavement, encouraging business owners to go after these and other resources, then coached them through arduous applications. Language was a barrier for many. Businesses that had been established for years and are “great at what they do,” says Suarez, didn’t have systems in place to spit out ownership documents, financial statements, and payroll figures, or to arrange for electronic deposits when a grant came through. Gastelum worked over a weekend with local CPAs to help nine businesses complete required tax filings. . .
What’s past is prologue
RAIL’s readiness to hit the ground running when COVID emerged reflects a decade of legwork and investment. With the light rail’s extension into downtown Mesa imminent in 2012, LISC Phoenix, working with partners, launched a multi-million-dollar program of equitable transit-oriented development along the corridor, as well as mural painting, musical events, and other creative placemaking projects to activate the corridor and stem business losses during construction. RAIL was born in 2012 to invite diverse local voices into the process, with Winkle as lead organizer. “For years,” Winkle recalls, “it was literally me, walking in and out of businesses saying, ‘Hey, how’s business today? What are you missing?’” He’d refer their needs to Gastelum or another local expert for specific assistance.
The overall goal, substantially met, was to ensure the new light rail wouldn’t plow under the existing community of ethnically diverse businesses as so many transit projects have done in the past, but instead bring revitalization and new opportunity. Not incidentally, its years of organizing also built the capacity of RAIL itself, growing an on-the-ground organization equipped to sustain and enrich the local business ecosystem in the even more dire situation of mass contagion.
Something special on Main Street
With the group’s help one business, a Venezuelan food enterprise called Que Chevere, even managed to launch a bricks-and-mortar restaurant in downtown Mesa—in the very midst of a broiling Arizona summer marked by pandemic.
Husband-and-wife team Maria Fernanda and Orvid Cutler had run a successful food truck for four years, and Fernanda, the more conservative of the two, had finally quit her day job to go all-in on offering the authentic Venezuelan recipes she’s learned from her mother and grandmother to the people of Mesa and beyond. But in May Cutler came down with COVID and Fernanda was worried. Their business account was dwindling fast, the food truck’s corporate lunchtime traffic at a drastic ebb. “What are we going to do?” she asked her husband.
“Augie [Gastelum],” says Cutler, “has helped us out every time.” RAIL walked the couple through successful applications for a PPP loan, so they could pay four new hires to work the restaurant they opened in June, and for a $20,000 Lowe’s grant through LISC they’re planning to put toward a fenced-in outdoor space with shade and misters to freshen diners in Arizona’s 100-plus-degree summer heat.
Now, as winter comes on, the space is comfortable and business is surprisingly good, says Cutler. “We’re never going to get rich doing this,” he says, “but I absolutely love it. The community is amazing. And I love my wife’s food. I’ve told her it’s special. It’s truly something special.”
America’s millions of small businesses are essential to the country’s functioning and to its diverse ways of life. They create jobs and keep consumer dollars circulating within local economies. Along with goods and services they bring distinctiveness and variety to Main Streets both urban or rural. And while it’s no small feat to create a thriving business in the face of structural inequities, independent entrepreneurship is the vehicle by which many people of color, women, and immigrants build wealth for their families and communities.
With independence, of course, comes risk. The coronavirus pandemic has had a harsh and disproportionate impact on the country’s smaller businesses, especially restaurants and nightspots, retail shops, and providers of personal services including neighborhood barbershops and beauty salons—and particularly among enterprises owned by people of color. In one survey of small business owners taken in early April, more than half said if the COVID crisis lasted four months they didn’t expect to be in business by the end of the year.
Small businesses can’t be expected to go it all alone. They may need support to get on their feet and grow in normal times, and to weather economic shocks like the COVID pandemic. That’s where a lesser-known entity comes in: the business development organization, or BDO.
Since the pandemic began in March LISC has deployed nearly $100 million in private funds to buoy the suffering small-business sector, with dedicated support from partners including Lowe’s, Verizon, U.S. Bank Foundation, Sam’s Club, Truist and many others who have contributed to our COVID-19 relief and recovery efforts. Those investments include direct grants to some 4,000 small businesses, money that may help proprietors cover rent and utilities, pay employees and suppliers, or mount an online marketing campaign. And it includes over $4.8 million in assistance to some 130 BDOs across the country that since the onslaught of COVID have been running on all cylinders to address sharply increased demand for advice and resources.
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