Springfield To Spend Some Cannabis Tax Money Supporting East Side Small Businesses, Homeowners
Under a program recently approved by the Springfield City Council, minority-owned businesses and residents on the city’s east side will have access to grants funded by city taxes on recreational cannabis.
The program allocates half of the 3% sales tax, which is estimated at around $445,000 according to city officials. The money is targeted to home and business owners in the area bound by Carpenter and Ash streets and Dirksen Parkway and the 10th Street rail corridor.
Just over three-quarters of the money will fund one-time grants of up to $100,000 for minority-owned, small businesses to pay for inventory, equipment, construction or renovations. Business owners are responsible for a 10% match.
Springfield Black Chamber of Commerce President Dominic Watson said the grants will benefit “pillars” of the Black business community. The area includes a commercial stretch of South Grand Avenue between the 10th Street Rail and 12th Street.
“Those would include the neighborhood restaurants, neighborhood barbershops,” Watson said. “We even have a new increase in businesses that are operating within the construction realm.”
Watson said the infusion of cash will put the businesses on a path to sustainability after a particularly difficult year and could spur more investment in the area of town.
“We expect a domino effect, which is going to invite investors to come in and start looking at the area from a more feasible standpoint,” he said.
Ward 2 Ald. Shawn Gregory co-sponsored the creation of the program with now-State Sen. Doris Turner when she was still an alderman. In 2019, Turner helped negotiate rules for the sale of recreational marijuana in Springfield, including an additional city-level tax. The plan earmarked half the money for economic development projects on the east side and half for police and fire pension payments.
“For this city, we did something historic,” Gregory said Tuesday. “There’s only one other city in the state that really tried to use this funding source to stay true to the state law intention of helping out communities that are impacted the most by the War on Drugs.”
Illinois officials, including Gov. JB Pritzker, tout the state’s equity focus in its landmark approval of recreational marijuana, promising to use state tax money generated from sales for economic development projects in communities of color. But the legislation has fallen short of goals to grant dispensary licenses to people of color, a program that has been mired in controversy.
A recent report from the Illinois Department of Financial and Professional Regulation found that one of the 219 people with ownership stakes in dispensaries statewide identifies as African-Amerian and two as Hispanic. Twelve identify as Asian, and the rest as white.
The fact that Springfield does not have a Black-owned cannabis dispensary or grow facility is a problem, Watson said.
“Now that we have this (program) in place, what else can we do? The most obvious thing that we can definitely tackle right now is ownership within the cannabis industry,” Watson said.
The remaining funding from the cannabis program offers up to $25,000 to homeowners in the designated area for home improvements. Homeowners must provide a 5% match and promise to live in the house for five years after completion of the project.
“We can fix parking lots, we can fix broken down fences, we can fix porches that are slanted,” said newly appointed Ward 3 Ald. Roy Williams, Jr., who took over the seat from Turner. Williams and Gregory now represent the east side, where the economic development and home improvement plan is targeted.
“Once we do that, it will change perception and hopefully we can get development here, whether it’s housing or commercial,” Williams said.
The city's planning and economic development office will manage the grant program.