Nop Zay, owner of First Cup Cafe, says construction on 23rd Avenue has resulted in only a few customers a day at her coffee shop near 23rd and Union.
Nop Zay, owner of First Cup Cafe, says construction on 23rd Avenue has resulted in only a few customers a day at her coffee shop near 23rd and Union. Kelly O

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After weeks of saying his administration had no legal avenue to offer mitigation money to struggling businesses on 23rd Avenue, Mayor Ed Murray changed his tune today. Murray announced that his administration will offer $650,000 to small businesses in the area to mitigate the effects of the overhaul of 23rd Avenue, which has severely restricted car and pedestrian traffic in the area.

Central District businesses along 23rd Avenue have complained about drops in business of as much as 80 percent because of the road project, especially between Jackson and Union Streets. The overhaul of 23rd was initially supposed to be done in phases, but delays resulted in multiple phases being under construction at once, further squeezing businesses.

While businesses along the waterfront and in the Rainier Valley have in the past received mitigation money (during seawall and light rail construction, respectively), the mayor and his staff have continually said those projects were under different circumstances and used federal money. Most notably, the city's legal department makes a distinction between the "full taking" that required some businesses on the waterfront to shut down during construction and the less burdensome limits to access that businesses on 23rd are experiencing.

Today, the mayor acknowledged the damage being done on 23rd.

"It is obvious that the project is having serious impacts on those businesses," Murray said today. "It is obvious that they need help."

The city will create a fund using $400,000 in federal Community Development Block Grants and $250,000 in funds from a federal tax credit program that's meant to encourage development in low-income areas.*

Mitigation money will be available to businesses with five or fewer employees located in a low-income area and affected by this project. Small businesses can also qualify if the owner or a majority of the employees are low-income (meaning they make less than 80 percent of the area median income or about $66,000 for a family of four). The city estimates about 20 to 30 businesses will qualify for the funding. That translates to between about $21,700 and $32,500 per business. The project is expected to last until February 2017. Less than $35,000 to endure the project for the next year is unlikely to satisfy all business owners, especially since waterfront businesses received a total of $15 million. Murray defended the amount, saying the $650,000 is the most his administration can legally offer the businesses on 23rd Avenue since they are not being required to close. The city will also offer businesses deferrals on their utility and tax payments.

Murray was also on the defensive today about recent statements from Seattle-King County NAACP President Gerald Hankerson, who has publicly criticized the city's handling of the project as part of an ongoing effort to gentrify the Central District. Murray said the city would do a race and social justice analysis of the 23rd Avenue project and if they discover it will have longterm negative impacts on the community, Murray said, "I will shut it down." This seems more like political posturing than a real likelihood the project could be shut down. Hankerson's criticism, and similar criticism from Council Member Kshama Sawant, has focused more on the ongoing trend of gentrification in the Central District and the city's lack of mitigation for these businesses than on a demand that the road project be stopped altogether. Murray said he believes "the answer to depressed communities [is to] invest in infrastructure."

Over the next few weeks, the city council will figure out exactly who qualifies and when money will be distributed. The council will start those discussions in a committee meeting tomorrow morning at 9:30.

Council Member Kshama Sawant, who represents the Central District, credited businesses for agitating and pressuring the mayor on this issue.

Small businesses—especially those owned by people of color, women, and the LGBTQ community—are often left out of the political calculus of City Hall," Sawant said in a statement. "Through organizing and activism, the 23rd Ave. small businesses have won mitigation."

*The basics of this funding pot: The feds offer New Market Tax Credits to investors for projects in low-income areas and the city collects fees to provide some oversight of those projects. This money is coming from those fees, which the city also sometimes uses for facade improvements on buildings in low-income areas.