Skagway residents applied for relief checks in robust numbers. That means there may be less CARES Acts money left over for local businesses.

View up Broadway from upper deck of a docked cruise ship in Skagway/Randy Roach

More than $7 million dollars sounds like a lot of federal relief money. But most of it will be funneled into the community assistance program in Skagway—the one that gives residents $1000 monthly checks. Municipal staff estimate that will leave only one million dollars for local business relief. That means some businesses could get left behind. 

“We can only help 250 businesses at a max,” said Kaitlyn Jared is the director of the Skagway Development Corporation, which will distribute the business relief money.

“The number of eligible businesses I know would be eligible just off the bat—it’s 289.”

Her original plan counted on $2.5 million in relief money from the borough. But there’s unlikely to be enough left if the high demand for Skagway’s direct financial assistance checks continues–that money comes out of the same pot. She said she’s concerned some businesses will have to shut their doors.

“We’re worried about what’s October, November gonna look like? Is there going to be a mass exodus from this town because there’s no restaurants open, there’s no stores open, and there’s no work?” she asked.

The small business grants program is still moving through the finance committee and has not yet been finalized. The grants will be awarded on a first-come first, serve basis. 

As it stands now, each qualifying business would receive a $4,000 grant with an additional sum based on the number of employees. It’s not enough money to solve most businesses financial woes.

“What we would receive off of that doesn’t even cover one month’s worth of bills that we cannot pay,” said Michael Healy, the owner and operator of the Skagway Brewing Company, and a couple of other restaurants in town. His operations expanded substantially last year and he was counting on the record-breaking 2020 cruise ship season that didn’t materialize. For larger enterprises like his, 4k doesn’t go very far.

“So the little cottage business that does $30,000 a year in business is going to get the same funding that my business does that you know, has multi-million dollars worth of sales… But I don’t know how they would do it any different with the amount of money they have,” he said.

He said he’s supportive of the municipality’s effort—and the community assistance program—but so far relief programs in general have fallen short for him. The federal Economic Injury Disaster Loan doesn’t even cover the cost of his inventory and the federal Payroll Protection Program money he uses to pay employees will dry up in October. He said after that, something has to give or he will have to shut down for the winter.

“Some sort of a forgivable loan if you stay open for the winter or something like that is what the municipality is going to have to do in order to keep our business district somewhat afloat and open this winter,” he said.

The municipality does have a healthy savings account. But unlike many Southeast communities, it’s putting most of the CARES Act relief money back in the hands of its residents, rather than into its coffers. And that savings account won’t be replenished with sales tax dollars this summer either—because cruise ships won’t be pouring into the port.

The small business grant proposal will be discussed by the finance committee on Wednesday at 5:30 p.m.