San Jose shops fined for COVID violations can’t get grants

Over the last year, Santa Clara County has cited hundreds of businesses—big and small—with fines that now add up to more than $5 million for violating COVID-19 restrictions. The county put that money into a grant program to help struggling businesses—but those with violations say they’re not getting financial help.

Dung “Calvin” To has cut hair for more than 15 years, offering cheap and fast haircuts to customers of all ages. In March 2020, To shut down his business, Mt. Pleasant Barber Shop, following suit with other hair salons and barbershops in Santa Clara County obeying shelter-in-place orders designed to curb the spread of COVID-19.

“This shop is our only income,” To told San José Spotlight, adding that his family also relies on work at the barber shop. “But I was so scared of violating the rules.”

To said other salons snuck customers through the back door during the December lockdown, but he refused to do the same.

Despite that, county inspectors slapped To’s business with a $5,000 fine in January. The violation? Someone in the shop cleaning up in preparation for reopening the next day.

“Five thousands dollars is too much,” he said. “Do you know how many haircuts I have to do to make $5,000?”

Now hundreds of businesses like To’s won’t even qualify to apply for county grants because of documented COVID violations. To said his business has not received any financial aid through the city or county since the pandemic started.

“Now there’s not much that I can do,” To said. “Once they fined me, it’s over.”

To said he doesn’t blame the county, understands government officials are just doing their jobs and appreciates them reducing his fine amount.

‘Devastating results’

Many citations, such as those given to Calvary Chapel San Jose, stem from blatant violations. But business owners feel the county was too heavy-handed with “businesses that are trying to survive,” Salon Blu owner James Griffiths told San José Spotlight.

“It’s such a waste of time,” Griffiths said. “It’s just scare tactic… but it left such devastating results. A third of my competition is now out of business.”

Businesses in Santa Clara County are at least 13 times more likely to fined—with much heftier amounts—than those in other Bay Area counties, according to the Mercury News. Santa Clara County defended its COVID enforcement against a backlash from local businesses, saying the fines weren’t meant to be a revenue stream.

In May, the Board of Supervisors directed the county to turn the penalties into a grant program to help struggling businesses.

“The purpose of the grant program is to reinvest the fines with businesses that were compliant with the law,” a county health official told San José Spotlight.

Out of more than 40,000 business visits by the county’s enforcers, only 434 shops received fines.

Businesses that corrected their violations in the grace period, which went away during the holiday season, did not face fines. Those businesses are eligible to apply for the grant program.

“At my suggestion, the program will apply a location-based diversity, equity and inclusion framework to the award of grants, so that grants are awarded with an eye toward those parts of the county where small businesses are least able to access affordable credit and banking services and that have suffered the ravages of the pandemic,” Supervisor Susan Ellenberg said. “So far, it has committed to more than $500,000 in grant funding.”

According to the county, COVID enforcers resolved 90% of complaints by trying to educate businesses before handing out citations.

The program is now accepting applications and offering up to $5,000 per business. More than 1,900 businesses have applied as of Friday, county officials said. Businesses have until Sept. 7 to apply, and the county will announce further rounds of grants as it continues to collect COVID-19 fines.

‘It’s not fair’

Local businesses, especially those in the salon industry, are frustrated after 18 months of dealing with seemingly endless COVID restrictions. Being disqualified from the new grant program adds insult to injury for some business owners.

“They have never communicated with us,” said another salon owner in South San Jose who was fined $500. The owner asked not to be named out of fear of retaliation from the county. “They just expected us to know the rules.”

Salon Blu remained open during the pandemic, defying the county’s order as the owner insisted his business only answers to the city and the state’s Board of Barbering and Cosmetology. The shop faces $18,500 in fines.

“It makes no sense,” Griffiths said. “We’re very clean. We all have done 1,600 hours of sanitary training for our licenses… It’s not fair to let the liquor store open and not us.”

Big businesses also fell victims to the county’s COVID-19 enforcement. Bay 101 Casino faced a whopping $20,000 fine last September because of its outdoor tents, said Ron Werner, vice president of the casino.

“There was a guideline that we followed when we’re setting up the canopy,” Werner said. “But then the guidelines were withdrawn, and the county was unhappy with the way we did it… It’s just more work and money for us.”

Businesses attempted to fight the citations, owners said, but small shops without resources to hire attorneys to fight their cases often ended up settling with the county for a reduced fine. For To, the county cut his fine down to $2,000.

“That was fine,” To said. “But the thing is, I didn’t want my business to be in the record… All I can do now is keep on working hard.”

Contact Tran Nguyen at [email protected] or follow @nguyenntrann on Twitter.