When the Sealy Economic Development Corporation provided grants to local businesses to help them through financial struggles related to the COVID-19 pandemic, it did so with the caveat that the money would have to be repaid if the business didn’t stay open for at least a year.
One such business went under and is now asking to be pardoned from paying back the grant.
Mike Gajewski owns and operates All Out Weapons and in May accepted a $3,700 grant from the Sealy EDC to help cover rent and salaries. That bought him two more months of operation before he had to close his store due to a nationwide inventory shortage of guns and ammunition.
“I cannot continue to keep my doors open when my suppliers cannot keep me supplied with firearms and ammo,” he told the Sealy City Council. “How can I stay in business when my suppliers cannot give me what I need to sell to my customers? This is heartbreaking to me, but COVID-19 hasn’t just affected me, it’s hit our whole nation.”
He noted that even large retailers such as Academy Sports and Outdoors can’t get the inventory they need.
Gajewski first went to the Sealy EDC board, which sent its recommendation for grant forgiveness to the Sealy City Council. The council, meeting Sept. 1 online, declined to forgive the grant but wasn’t ready to call it due, either.
“I would like just to wait. A lot can happen … in nine months,” Councilmember Dee Anne Lerma said. “I’d hate to make a decision today that we would make differently in nine months. I’d like to see where we are at the end of 12 months rather than making a decision today.”
City Attorney Tim Kirwin interrupted and said that wasn’t a legal option for the council.
“That was brought up at the EDC and the problem is that he is already out of business,” Kirwin said. “He has already closed his storefront. So even if he reopens it at the end of the year, he’s already in non-compliance with the current terms of the 380 program (performance agreement). That’s why he couldn’t come back at the end of the year. He’s already in non-compliance and even if he opened up tomorrow he would still be in breach of the program requirement.”
Gajewski said he has owned his business since 2009. He recently closed the storefront he has had downtown on Second Street, laid off his employees, and moved what is left of his business online to operate out of his house.
“I have had my ups and downs in my little mom and pop shop, but this pandemic with the COVID-19 has really hit me hard. The Sealy EDC came to me and provided me the grant for which we’re very thankful for, helping me in my small business. It paid for two months rent and two months salary for my employees. Now the Sealy EDC has informed me to turn the full grant back because I cannot keep my doors open,” Gajewski said.
The council had two related agenda items to consider. The first was an amendment to the 380 Economic Development Program for Businesses Impacted by the COVID-19 Epidemic to allow it to decide such hardships on a case by case basis. The second was to allow All Out Weapons a waiver from the claw back requirement.
“This 380 agreement, a lot of questions were asked and I don’t think we should be making changes right now,” said Councilmember Chris Noack.
Councilmember Adam Burttschell wanted to know if Gajewski would be considered in compliance if he reopened his store.
“The intent of it was you had to stay in business for 12 months at a storefront,” Kirwin answered him.
“I had an issue with this particular clause because we didn’t know what the impact of COVID-19 would be,” Burttschell said. “I disliked putting a time period on it because the whole purpose of the agreement was to assist businesses… I wouldn’t have an issue amending it.”
Councilmember Larry Koy made a motion to not waive the requirement. Lerma seconded it. The motion passed with Burttschell voting against.
Kirwin said that made the second part moot, but Lerma made a motion to table it until after the year had passed. That motion was approved with Koy voting against.
In other action, the city council:
• Awarded a bid to Mercer Construction for a sewer improvement project.
• Approved an amendment to a performance agreement with Maass Flanges Corp.
• Approved spending $5,000 of SEDC funds to convert a storage facility (All Mini Storage) into office spaces.
• Approved spending up to $9,900 in SEDC funds to provide city infrastructure to the above-mentioned office spaces.
• Approved spending up to $200,000 for asbestos remediation and demolition related to upgrading the Rooms to Rent facility, which is low rent housing.
• Approved an engineering/surveying contract with Strand Associates for a Community development Block Grant program.
• Considered a request by Noack to increase the drainage fee on utility bills. The item will be discussed at the next meeting.
• Approved on second reading new rates for sewer, gas and solid waste services.