Economic inequality, rich and poor gap, unfairness income, different money people being paid concept, white rich businessman standing on high salary coins tower with poor black man on low coins stack.

Public Records Show Millions in Pandemic Grants Distributed Inequitably in Counties Serviced by Ann Arbor SPARK

By The Ann Arbor Independent Editorial Team Last updated Jan 11, 2022

Businesses in Livingston County received exponentially larger grants than they did to businesses in Washtenaw and Jackson Counties.

by P.D. Lesko

In 2021, between the Washtenaw Small Business Emergency Relief Fund, Michigan Small Business Relief Program and Michigan Small Business Survival Grant programs, Ann Arbor SPARK officials told the public they distributed millions in public funds to hundreds of businesses in six Michigan counties. A total of five percent of overall funding for the programs went toward administrative costs of the economic development organizations administering the grants. Which businesses got how much? Which business owners applied and were not awarded funding? How many Black-owned businesses benefitted? SPARK officials refused to hand over public records related to their dispersement of these public funds. However, Michigan Economic Development Corporation (MEDC) officials told The Ann Arbor Independent that the information is, indeed, public. Public records documenting how SPARK distributed funding for hundreds of grants, show the public money was inequitably distributed.

SPARK is supported in part by almost $4 million in tax-increment financing from businesses, schools and libraries within the Ann Arbor DDA boundary. The largest grants administered by SPARK and its “committee” went to businesses in Livingston County. Jackson County businesses received the smallest individual grants, on average. Public records show that business owners who sought grant money through SPARK, and who disclosed in their applications the grants would impact zero jobs, in several instances received larger sums than businesses seeking grant money that would impact dozens of jobs. There were, ostensibly, objective criteria used by “committees” to determine eligibility.

SPARK’s first grant criteria was “number of employees impacted.” Yet, business owners who reported zero jobs impacted not only received funding, but received larger grants than companies that reported dozens of jobs would be impacted.

Despite the objective criteria for grant applicants, records show the grant amounts awarded varied wildly between counties, between businesses within the same industry (i.e. restaurants), and applicants that had the same number of employees impacted.

Ashley’s Restaurants, LLC and Old Town Ann Arbor, Inc. both received grants. Old Town owners told SPARK officials that 14 jobs would be impacted, and Ashley’s said 24 jobs would be impacted. Ashley’s Restaurants, LLC received a $7,500 grant and Old Town Ann Arbor, Inc. received a $10,000 grant.
Top Shelf Bar and Grill, Inc. in Livingston County told SPARK officials 10 jobs would be impacted. The restaurant received a $15,600 grant. Livingston County Snapper’s Bar Inc. officials said 0 jobs would be impacted and SPARK gave that restaurant a $12,000 grant.
In Jackson County, the owners of Thuli’s Pub told SPARK officials 0 jobs would be impacted, and the restaurant received a $6,500 grant. Owners of Jackson County’s Alpha Coney, LLC, like Livingston County’s Top Shelf Bar and Grill, Inc. said 10 jobs would be impacted. Unlike the Livingston County restaurant that received a $15,600 grant, Jackson County Alpha Coney, LLC received a $3,500 grant.

Ashley’s owner Jeff More said, “We looked to see what support was out there for restaurants, from individual grants, small levels by counties and cities and state, all federal grants, any other federal programs, we took advantage of every one we could find.”

SPARK officials are refusing to release information about the companies that applied for funding, but whose applications were rejected or denied.

“I have no idea why our small business didn’t get funding,” said the owner of a popular, downtown Ann Arbor restaurant, since closed. “That money, $20,000, would have helped me help my staff, but I’m not the only little guy business owner in Ann Arbor who wonders how these decisions were made.”

The Michigan Daily published a piece in which it was reported that over 100 restaurants in Ann Arbor have closed since March of 2020.

The applicants, below, who applied to receive Michigan Small Business Survival Grant funding facilitated by SPARK officials, reported that grant money received would impact zero jobs. Nonetheless, awarded grants to the companies ranged from $1,957 to $15,000.

Records show that American Office Solutions, Inc. in Jackson County reported that grant funding received would impact 31 jobs. The company received a $3,500 grant.

The Michigan Small Business Survival Grant Program distributed approximately $52.5 million to nearly 6,000 small businesses across Michigan. MEDC records show during SPARK dispersed $4,465,132 in Michigan Small Business Survival grants to 644 businesses in six counties (Hillsdale, Jackson, Lenawee, Livingston, Monroe and Washtenaw), and $350,000 in Michigan Small Business Relief Program funding to Washtenaw County companies. Through the Michigan Small Business Relief Program, 2,879 Michigan small businesses were awarded a total of $20 million in grants and loan. SPARK officials were given $900,000 to distribute under the auspices of the Michigan Small Business Relief Program.

MEDC records show SPARK facilitated the dispersal of Small Business Survival grants to individual businesses in amounts ranging from $1,957 to $20,000 (the maximum awarded to companies that were closed). Records show SPARK dispersed grants to 200 Washtenaw County businesses worth a total of $1,627,500, and grants to 79 Livingston County business worth a total of $830,164. Livingston County grant recipients, on average, received awards between 15 and 50 percent larger than those dispersed to Ann Arbor and Washtenaw County businesses. Records show that while Livingston County businesses received the largest individual grants, businesses in Jackson County received, on average, the smallest awards.

On October 14, 2021 the Livingston County Board of Commissioners voted to approve a fee for service agreement with SPARK worth $175,000. Livingston County Commissioner Martin Smith said at the October meeting that the BOC had seen how “powerful the county association with SPARK can be, especially over the last 24 months.” He noted “[SPARK was] instrumental in spreading the word about state and federal programs available to the business community and assisted them in obtaining funds to get through a very difficult and trying time.”

The committee that fielded applications from business owners for funding from the Michigan Small Business Survival Grant program, included representatives from these local entities:

Washtenaw County Committee

Ann Arbor SPARK
Washtenaw Community College Entrepreneurship Center
Washtenaw County’s Office of Community and Economic Development
Washtenaw County’s Racial Equity Office
NewFoundry CEO
Advisory review from the Small Business Development Center

The Washtenaw Community College Entrepreneurship Center is a part of the community college led by Rose Bellanca, a member of SPARK’s Board of Directors. The director of the Center is Kristin Gapske. According to her Linkedin profile, Gapske’s longest stretch of employment was the 13 years she marketed and sold “an extensive range of functional and decorative wares through sales calls, phone solicitations, trade show sales and direct mail.” She holds a Master’s in Contemporary Asian Analysis, Southeast Asian Studies and an undergraduate degree in political science.

Teresa Gillotti is the Interim Director of the Washtenaw County’s Office of Community and Economic Development. According to her Linkedin page, Gillotti holds a degree in Urban Planning from the University of Wisconsin at Madison and an undergraduate degree in English/Anthropology. Unlike Gapske, who has experience as a small business owner, Gillotti’s work experience is entirely as a public servant.

The Washtenaw County’s Racial Equity Office was also involved with SPARK’s committee.

A January 2021 study at the University of Michigan revealed that Black-owned businesses are around 30 times less likely to receive federal funding than those businesses owned by white owners. In the Fall of 2021, Black business owners in Washtenaw County found themselves unable to access financial relief. As a result, a group of local business owners created the Association of Businesses of Color to provide aid to businesses run by people of color.

The Ann Arbor Independent reached out to Jenn (Cornell) Queen, SPARK’s VP of Communications, to comment on the disparities in the amounts of grant funds distributed. She was also asked to comment on the number of grants awarded to business owners of color in Washtenaw County. Cornell is running for Ann Arbor City Council to represent Ward 4, a seat currently held by Elizabeth Nelson (D).