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July 31, 2019

Dear City Councilmembers:

Seattle’s Small Business Community takes much pride in our contributions to this City. We provide jobs, generate tax revenues, create memories, activate our streets, and serve as neighborhood gathering places. We can only continue to play these crucial roles if we are supported in our efforts to thrive and survive in the ever-challenging environment in which we have built our businesses. The financial obstacles that have been imposed by the City of Seattle are making it increasingly difficult for us to thrive.

We’ve recently become aware of proposed Council Bill 119555, which will impose a significant health care expenditure requirement and put further regulations on small and family-owned hotels and small businesses which simply happen to lease space from a hotel. While we know the original initiative included more businesses than what your legislation does, we do not believe your definition protects small, family owned Seattle businesses. As members of Seattle’s small business community, we implore you to resist passing this legislation without a more thorough examination of the impact and lasting effect it will have on Seattle’s vibrant Small Business Community. We understand that your objective was to implement the initiative passed by voters but we also understand that your objective was to create responsible legislation that would not have unintended consequences. We’re sorry to see that that did not happen. The Small Business Advisory Council has members who would be faced with potential cost increases of upwards to $600,000.00. Many small hoteliers imagine they would be forced to close within 2 months of the legislation’s enforcement date.

The legislation the Council is currently considering makes no distinction between how different types of hotels are able to purchase health insurance and imposes the same requirements on a non-hotel employee who works at a café or retail establishment as it does on a hotel employee. The draft claims it is meant to apply to large hotels, yet many of the hotels are small and family- owned businesses, and it also applies to what it calls “ancillary hotel businesses,” the definition of which is so broad it applies to businesses

simply because they may be tenants of hotels. These classifications of businesses are fundamentally different and need to be treated as such. Even if these ancillary businesses are “carved out”, the reality is that the Seattle economy is an ecosystem -- what affects large businesses almost always affects smaller businesses, or trickles down to them.

The required health care expenditures in the proposal far exceed the coverage requirements in the Affordable Care Act, and the resulting expense is not sustainable for small businesses. It is those small businesses – many of them immigrant- and family- owned – that we should be encouraging to grow and thrive in Seattle, not bringing in new requirements that may force them to move or close their doors.

We urge the City Council to slow down, identify who this legislation will impact, and take the time to understand the consequences. Small businesses are the fabric of Seattle. These business owners live locally, support other small businesses, non-profits, schools, and arts and cultural organizations. Their absence would leave an irreparable void in the flavor of Seattle. We have already seen a departure of much of Seattle’s service industry employees to Renton, Burien, Tacoma and Auburn/Kent. Without viable solutions, Small Business owners and their businesses will follow. We also believe that business and government should work together at the state level to find sustainable solutions to family health care costs without putting the burden upon one specific industry which includes small and family-owned businesses.

Please take time to reconsider and fully comprehend the impact on the beloved small business community in Seattle before moving forward. We would be more than amenable to engaging with you to offer a better understanding of the effects of this legislation.

Sincerely, Joe Fugere, Small Business Owner, SBAC Co-Chair Taylor Huang, Small Business Owner, SBAC Co-Chair Donna Moodie Marjorie’s SBAC Co-Chair Tracy Taylor, Elliott Bay Book Company SBAC Co-Chair Shaiza Damji, Hotel Nexus, SBAC Ryan Suddendorf, Co-Founder Arriba Cantina

Linda Di Lello Morton, SBAC Tamara Murphy Rachel Marshall - Rachel’s Ginger Beer, SBAC Joey Burgess, Owner/Operator Burgess, SBAC Beto Yarce, Nonprofit leader and entrepreneur Travis Rosenthal, Founder/Owner Pike Street Hospitality Group Sara Nelson, Fremont Brewing Jasmine Donovan, President & CFO, Dick’s Drive-In Restaurants Dan Austin, Owner- Peel & Press (West Seattle)/Owner- Flight Path (Intentionally not in Seattle) Lei Ann Shiramizu, Momo in Japantown, SBAC