Woodstock City Council approves converting up to $280,000 in emergency loans into grants, not to be repaid

Chilly Willie’s frozen yogurt shop, Dr. John Evans dental services tell city they do not expect to reopen

Melissa Keclik thinks the B Tan tanning salon she co-owns with her husband in Woodstock fell through the cracks when emergency relief was offered to local businesses to alleviate the effects of the COVID-19 pandemic.

With only a few part-time employees, Keclik’s payroll costs at B Tan were too low to net much benefit out of the federal Paycheck Protection Program, she said.

But the $5,000 loan she received from the Woodstock city government helped to keep the tanning business from closing, she said.

On Friday, she learned the Woodstock City Council this week voted unanimously to convert those loans into grants that do not need to be repaid to the city as originally intended.

“We haven’t really had the option of the grants for the small businesses, not like the restaurants and the bars and the breweries. They’re all getting more assistance,” Keclik said.

Some of the 57 businesses that received $280,000 total in the loans forgiven by Woodstock are restaurants and bars, but many are retailers, personal services and professionals that saw their customers and revenue disappear as the coronavirus surged and government orders that included mandatory business closures and instructions to stay at home followed to stem its spread.

B Tan needs more financial help, too, Keclik said, as customers have stopped coming in as frequently or at all during the pandemic, even during what normally is the salon’s busy season.

The city also implemented the Woodstock Restaurant Relief Grant Program, established in October with funds obtained through federal pandemic relief legislation, that offered larger awards of up to $35,000. As grants, these awards were not expected to be repaid.

The restaurant relief program saw 31 restaurants participate, with seven receiving the maximum of $35,000 for a total of $500,000 in grant awards issued through the program, Woodstock Economic Development Director Garrett Anderson said.

“I just think there are a lot of small businesses out there who did enter into this loan program who would kind of like to have consideration for their situations because they remain in very tough circumstances,” Mayor Brian Sager said.

The city surveyed the small businesses that participated in the $5,000 loan program. Of the 38 that responded, six said they may never fully recover.

Another 11 said they don’t think revenue will return to the level it was at before the coronavirus outbreak until the state moves into Phase 5 of the Restore Illinois Plan, which would involve all sectors of the economy being fully reopened with large gatherings able to take place.

Of the remaining businesses that responded, 13 said they thought revenue would rebound by the summer, two said early 2021 and four said they already are seeing revenue similar to levels before the pandemic.

“I’m actually somewhat encouraged by the progress being made,” Anderson said, noting that the survey represents only a few businesses out of the hundreds in town. “There are a lot of winners and losers in the situation we’ve all been through this year. We are rejoicing with those that are doing well and sorrowing with those that are not.”

The move by the council to turn the $5,000 small-business loans into grants also absolves small-business owners of the personal guarantees they provided to pay back the city even if their business failed.

That means the two businesses that have indicated to officials that they won’t be reopening their doors, Chilly Willie’s frozen yogurt shop and Dr. John Evans dental services, also can have their loans forgiven, officials said, since it is believed participating businesses took the loans in good faith that they would try to survive the outbreak.

“This grant money really stayed in the community,” council member Jim Prindiville said. “It did its job.”

Sam Lounsberry

Sam Lounsberry covers local government, business, K-12 education and all other aspects of life in McHenry County, in particular in the communities of Woodstock, McHenry, Richmond, Spring Grove, Wonder Lake and Johnsburg.