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Bill aims to pay California merchants if transportation construction affects business

July 5, 2024

Legislation winding its way through Congress aims to provide funding for small businesses and nonprofits negatively impacted by major transit and highway projects.

Introduced by Rep. Lou Correa, D-Santa Ana, the bill, called the Business Uninterrupted Monetary Program Act of 2023 — or BUMP Act — would require “local sponsors of major transit and highway projects to create a funding pool that will provide impacted businesses with monetary relief to cover expenses during interruption by transportation construction,” according to his office.

Major transit projects required to create a BUMP fund would have a total price tag of $100 million or more, and for highway projects, $50 million or more.

Funding would potentially cover utilities, insurance, rent or mortgage, payroll and loss of income. As the bill is written, it’s up to the sponsors of a transportation project to determine which businesses would be eligible for that funding and how much each business should receive. The local agencies would also need to verify the information provided by the impacted businesses.

If the project already has an equivalent program or the agencies can prove that there is no interruption to business, they could request a waiver from the Secretary of Transportation to opt out of creating a BUMP fund, according to the legislation.

In Santa Ana, where Correa resides, merchants near downtown Fourth Street say they are still coping with the effects of construction that went through the area for the OC Streetcar, a 4.1-mile line connecting Santa Ana and Garden Grove.

Construction of the streetcar, which kicked off in 2018, shut down sidewalks and parking spaces on Fourth Street for several months, which small business owners operating on the historic thoroughfare said led to income losses. Construction is ongoing, said Orange County Transportation Authority spokesperson Eric Carpenter, and streetcar testing is expected to begin in 2025.

In 2022, dozens of merchants demanded financial assistance and relief from OCTA and Santa Ana, and the city offered $3 million in grants to businesses impacted by the streetcar construction.

OCTA reimbursed the city nearly $680,000 for lost parking revenue and other costs incurred between February 2022 and December 2022. The OC Board of Supervisors also approved grants up to $20,000 for impacted businesses.

But longtime business owner Shawn Makhani said the place is still “a ghost town.”

“There are no customers, there is no business,” said Makhani, who owns and runs Telas Fabrics.

Makhani said a significant drop in sales has forced him to downsize. He has been in this location for about 26 years, but now rents out half of his store to another business. Makhani has only one-fourth of the merchandise he used to carry, he said.

“People used to come from all over, and we had a very active business,” Makhani said. “If I did not own my building, I would’ve gone out of business a long time ago.”

The Pizza Press restaurant just down the street from Telas Fabrics has a similar story to tell.

“We saw a massive, massive decline in customers and revenue,” said franchise owner Dara Maleki. “We lost tens of thousands of dollars of revenue that was clearly from the rail car construction project. We saw other restaurants boom, but that was not the case for Santa Ana.”

Carpenter said the OCTA has been “well aware of concerns raised by business owners along Fourth Street” and has worked with them on several fronts to address their concerns.

“Some of what OCTA has done to address those concerns included inspecting the work site daily, providing security in the area and adding extensive fencing and signage to let the public know that local stores and restaurants remained open for business even during the heaviest construction,” he said. “OCTA also continued to coordinate with the construction contractor to increase work hours in the area to complete the work faster.”

Maleki said the BUMP Act would be welcome, but added: “How do we fix what’s already been done?”

“For weeks you would have dirt in front of your store. The whole entire block was ripped up, the walkways were limited, your storefront would be blocked off and you’d have to walk down two blocks to get to the other side,” he said. “What happens when these projects last so long, is people forget about the downtown.”

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“That is the lasting effect of how this rail car has affected the business environment down here.”

Correa said his colleagues around the country have heard from constituents who experience similar hardships during construction projects.

“You’ve got beautiful infrastructure projects going on in the district, and small businesses that are going out of business for the sake of progress,” Correa said. “Local businesses should not have to bear the burden of progress.”

The legislation, co-sponsored by Rep. Adam Schiff, D-Burbank, was referred to the House Subcommittee on Highways and Transit last November and has seen no movement since. Correa’s office shared that it is currently engaging in outreach with other House members and actively working with outside stakeholders on next steps.

Orange County Register

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Bill aims to pay California merchants if transportation construction affects business

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