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Solvang Council OK's COVID-19 business loan package, temporary moratorium on evictions

Solvang Council OK's COVID-19 business loan package, temporary moratorium on evictions

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Solvang City Council members unanimously voted Monday to provide an emergency loan package for small businesses as well as a temporary moratorium on residential and commercial evictions for failure to pay rents as a result of COVID-19.

The $250,000 loan program, proposed March 20 and developed by staff in a matter of days, will provide up to $5,000 to qualifying Solvang businesses. Preference will be given to those in the downtown, commercial area most impacted by the loss of tourism as a result of the statewide shelter-at-home order.

“We’re trying to provide that immediate initial relief to try to give hope, give opportunity so we don’t lose the bread and butter that actually brings the money into this city, actually pays all the services the residents enjoy,” said Mayor Ryan Toussaint.

The loans are intended to serve as a bridge to financial survival while businesses await SBA loans and other state, federal or additional emergency relief funding that could help them make ends meet through the statewide shutdown and the months to follow.

“They’re signing an agreement, but we’re also a community of friends and neighbors and we’re just trying to do something quick to take care of each other,” said Mayor Pro Tem Robert Clarke.

Acting City Manager Xenia Bradford reported Solvang, which depends heavily on tourist-generated sales tax and hotel tax to fund city services from parks to emergency services, has essentially seen “economic cessation where stores are shut, the whole town is shut and the streets are empty” since Gov. Gavin Newsom issued his March 19 shelter-at-home order.

That order, which essentially shuttered tourist-driven local economies like Solvang’s, has been extended to April 30.

Toussaint noted on multiple occasions that property tax paid by residents falls far short of the city’s expenses. Sales tax and transient occupancy tax, also known as the hotel bed tax, cover the lion’s share of city expenses.

“Our worst case scenario is that we’d need to rely on reserves, and they’ll run out very quickly,” Bradford said.

The moratorium on evictions for non-payment of rent by residential and commercial tenants who have been harmed financially as a result of COVID-19 is slated to expire May 31 unless the council enacts further updates. The emergency ordinance allows for the deferral of rent payments, not the erasure of them.

Residents and businesses have until the 21st of April to notify landlords they intend to take advantage of the program for April and until May 21 to notify of May rent deferral. When the ordinance expires, renters would be expected to return to paying their rents as well as begin making payments to cover those deferred rents over the next six months.

The program is only available for rent deferrals beginning April 1. Tenants who are already in arrears could still face eviction proceedings, though courts are currently closed as well.

Council member Chris Djernaes noted that landlords also have mortgages to pay, but that he suspected they could find relief from their banks under SBA business grant programs announced days ago.


— Bradford reminded the council and general public that city parks are officially closed. While restrooms remain unlocked, all playgrounds including their play structures are off limits.

— Residents were asked to treat the city’s sewer kindly by flushing only human waste and toilet paper. Everything else, including wipes marketed as “flushable,” facial tissues, disinfectant wipes, diapers, hair, towelettes and feminine products, should be disposed of in trash bins.

— The council voted 5-0 to renew the Solvang Skytt Mesa Landscape and Lighting Maintenance District program. The minimum wage increase and cost of weeding requirements resulted in an increase in the assessment from $1,224 to $1,272 per parcel.

— The council voted 5-0 to allocate its $109,959 in Senate Bill 1 state road repair funds for the South Alisal Road Pavement Reconstruction Project.

— The council voted unanimously to revoke the business license of Golden Elements, 1650 Copenhagen on the grounds the business has repeatedly violated the city code against barkers and hawkers. City staff reported it has received “numerous public complaints related to aggressive sales tactics, including on the public sidewalk, and of potential violations of other local, state and federal law,” and that, “despite the many notices, personal contact, and issuance of administrative citations and fines, (the business) has continued its offending business practices and it appears that it has no intention of coming into compliance with legal requirements to continue operating business.”

Coronavirus Series: Local impact and reaction to COVID-19 on the Central Coast

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