Costa Mesa lifts ban on commercial evictions, uses $14M in federal funds to spur pandemic recovery

Citing an ebbing coronavirus pandemic, Costa Mesa city officials decided this week to end a temporary eviction ban on commercial properties and apply nearly $14.2 million in federal American Rescue Plan funding toward civic cuts sustained in the past year.

The Costa Mesa City Council approved an urgency ordinance that would repeal a commercial renter protection put in place on April 21 to assist tenants unable to pay rent due to the impacts of the coronavirus, including the ongoing closure of businesses throughout the pandemic.

The ordinance would take effect immediately and give commercial tenants a 120-day grace period to pay back rent incurred up to April 2021. Landlords of such properties could move to evict non-paying tenants who become delinquent on or after May 1.

City Manager Lori Ann Farrell Harrison said her office had heard from landlords and property owners hoping to resume collecting rent on commercial properties after a long drought.

“We do believe with the [state’s impending] reopening on June 15 we’re starting to see some improvements in the economy and the reopening of businesses that would allow for most tenants to be able to make those commercial payments,” she said.

Newly appointed Mayor John Stephens said it seemed like a prudent time to change course.

“I’m glad we issued the eviction moratorium when we did — I think we saved some businesses there,” he said. “But we’re now in the orange tier, moving into the yellow tier, and it’s time for businesses to pay their rent moving forward.”

Officials also agreed Tuesday to use the first half of an anticipated $28.3-million allocation from the Biden administration’s $1.9-trillion American Rescue Plan to replenish cuts to city funds sustained during the pandemic.

City Finance Director Carol Molina said more than $14 million would become available to Costa Mesa 60 days after the measure’s March 11 passage, with the remaining allocation anticipated to arrive one year from that date.

Molina proposed using $2.5 million from the initial influx of funds to relieve a deficit in the city’s disaster fund and placing $2 million into general fund reserves that were drawn down in December to fund a bridge grant program for small businesses.

Another $4 million would be used to replenish general fund emergency reserves that were used to help close a $10-million gap in the city’s 2020-21 budget, Molina told the council Tuesday.

“Being able to use these dollars instead of general fund reserves will allow us to ensure the general fund stays full,” she added.

To help restore city employees — whose collective bargaining teams agreed to 5% across-the-board employee furloughs in June to help close the budget deficit — the city proposed eliminating the cuts from April through June 2021 and providing $2.4 million in one-time reimbursements to cover pay cuts sustained from July 1, 2020, through March 31, 2021.

Councilman Manuel Chavez called the replenishment “great news” for the city and its staff.

“We are only in the budget position we’re in because city employees took it upon themselves to really be a bastion of hope for our city,” Chavez said. “They’re the ones who took money out of their pockets during a pandemic. I think there’s nothing better to do than to give them back the money they gave us during these hard times.”

Mayor Pro Tem Andrea Marr said the move was an important first step toward Costa Mesa’s pandemic recovery.

“This is the beginning of a return to normalcy,” she said.

The funding plan was approved in a 6-0 vote, with Councilman Loren Gameros absent from Tuesday’s meeting.

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