Six businesses were awarded $280,000 in grants by the Springfield City Council on Sept. 17 from the city's share of sales taxes on adult-use cannabis sales.
The unanimous vote on the allocations, which were part of the council's "consent agenda," came more than two years after the first round of allocations and after a September 2023 audit that pointed out numerous inconsistencies in the program and suggested reforms.
Val Yazell, the city's director of planning and economic development, told Illinois Times that she and her staff evaluated 15 applications for second-round funding and recommended six based on rules and promotional materials put out by the city before the administration of former mayor Jim Langfelder left in May 2023.
Applications for the second round began to be accepted on May 2, 2023, and closed 10 days later. Mayor Misty Buscher took office on May 5, 2023.
"What we had to do for this round is we had to follow the guidelines that had been presented to these people," Yazell said. "We can't change the rules midstream."'
Yazell said delays in getting the second round of business grants under way were needed to make sure city staff understood what applicants were told by the previous administration and future grant recipients understood the rules going forward.
Ward 2 Ald. Shawn Gregory said he was "glad to see" the second round of allocations move forward to assist minority-owned businesses in a designated section of the city – mostly in Wards 2 and 3 and bounded by the 10th Street corridor on the west, Dirksen Parkway on the east, Carpenter Street on the north and Ash Street on the south.
"It took too long," Gregory said. "It's not a lot of money already. ... We still have a lot of businesses in our community that can benefit from cannabis funding."
Awarded $40,000 grants for renovations and equipment were: Harold's Chicken (2503 LLC), 1126 South Grand Ave. E.; Connie Delights (Mony Enterprises LLC), 610 S. Martin Luther King Drive; POBoy & LJ's Banging Wings & Thangs Kitchen LLC, 1407 S. 16th St.; and Snack Shack K LLC, 1530 S. Pope St.
Awarded $60,000 grants for equipment and inventory were: Mary's Spot LLC, 2150 E. Clear Lake Ave., and R&M Maintenance Services, 422 S. 11th St.
Kayla Graven, the economic development office's operations coordinator heading up the cannabis grants program, said the nine other applicants were denied for a variety of reasons. Among them were they didn't have a location in the cannabis grant area or they were nonprofits or home-based businesses.
In the first round, cannabis grants were supplemented, in many cases by funding from the Far East Tax-Increment Financing District. The second round didn't include TIF funding.
Not all of the more than $600,000 in cannabis grant money and $404,000 in TIF dollars awarded in the first round were paid out. That's because city officials said some businesses didn't comply with requirements for funding. The city has considered legal action to "claw back" money paid to two businesses.
Some businesses benefiting from the first round told Illinois Times that city staff members gave them conflicting information or were hard to reach, leading to misunderstandings. Some also disagreed with findings in the audit, conducted by the Buscher administration, that they said were incorrect or misleading.
Springfield's business grant program, unique in Illinois when it began, resulted from a City Council decision to devote half of the city's 3% sales tax revenue from cannabis sales to help pay off the city's fire and police pension-related debt.
The council is devoting the other half to economic development on the east side, with more than three-fourths of it to the business grant program and the remainder for an exterior home improvement grant program.
For the city's 2025 fiscal year, which began March 1, 2024, $550,000 in cannabis funds for business grants and home improvement was budgeted, and $384,856 of the total has been allocated, Graven said.
The remainder will be rolled over for potential use in the next fiscal year, Yazell said, adding that applications for the third round of business grants will be accepted in February 2025.
By that time, city officials plan to tweak the program based on recommendations in the audit. Those recommendations included reviewing the program's goals and establishing a fraud hotline that allows anonymous reporting of suspected fraud and misappropriation of funds.
The audit called for the city to "establish a protocol for responding to whistleblower complaints."
After the third round, city staff may consider whether business grants are a good use for cannabis tax dollars, Yazell said, though Gregory said he wants business grants to continue.
The program, Gregory said, has "paid dividends" for Springfield-based businesses in the poorest parts of the city. But delays in awarding a second round of grants resulted in some businesses finding locations outside the cannabis grant area, he said.
Lawrence Curtis Bolden, 71, who received about $40,000 in cannabis and TIF funds to renovate The Fadeologists LLC at 1431 South Grand Avenue E., said the money "helped me tremendously" though he originally expected to receive up to $100,000 in grant funding and make more needed improvements at the barbershop.
He also didn't like that the city required him to pay for work upfront and then be reimbursed. That resulted in him putting $5,000 on a credit card and borrowing another $5,000.
"I didn't know why they did it like that," he said.
Bruce Clark, owner of Bourbon Street Rhythm & Ribs at 1031 South Grand Avenue E., said he appreciated the cannabis and TIF funds, which allowed him to create a walled-off beer garden and second-floor deck overlooking the busy intersection of South Grand and 11th Street.
But Clark said he received only $30,000 to $35,000 of the $80,000 awarded in cannabis and TIF funds. Yazell said Clark received the full amount, and she has the canceled checks to prove it.
Clark said he also has dealt with resistance from the city's building and zoning department in his quest to obtain the required permits and approvals for an enclosed kitchen he spent tens of thousands of dollars to build next to the beer garden. The kitchen, he said, would be used to cook ribs and other food to accommodate parties in the new beer garden, serve patrons of his tavern and offer a new dining and entertaining experience on the east side.
Clark said he has lost sleep because of the frustration of receiving conflicting information over the past year about what the city requires and what it will approve before the kitchen can open.
"They are trying to destroy me," Clark said. "There is no reason why this place should not be up and running."
Matthew McLaughlin, a projects manager with the city, downplayed the situation. He said the city wants Clark to succeed even though there has been "some back and forth" between Clark and inspectors on final details.
Only minor changes in the portable shed housing the kitchen will be needed, and "nothing that should cost a whole lot of money," McLaughlin said.
Clark, however, said he doesn't know when the dispute will be resolved.
"They are lying about everything," he said, "and I don't understand why they're giving me a hard time."
