Meeting_Body
CONSTRUCTION COMMITTEE
OCTOBER 14, 2026
Subject
SUBJECT: BUSINESS INTERRUPTION FUND (BIF) AND EAT-SHOP-PLAY (ESP) PROGRAMS
Action
ACTION: APPROVE RECOMMENDATION
Heading
RECOMMENDATION
Title
CONSIDER:
A. ADOPTING the Business Interruption Fund (BIF) Project Eligibility Policy, establishing two pathways to eligibility: Standard Eligibility and the Project Acceleration Partnership (Attachment A);
B. RECEIVING AND FILING information on Metro’s construction mitigation strategy for Bus Rapid Transit (BRT) projects, including Eat Shop Play (ESP).
Issue
ISSUE
At its May 2023 meeting, the Board approved Motion 17 by Directors Horvath, Dupont-Walker, Solis, Barger, Krekorian, and Dutra, directing the Chief Executive Officer (CEO) to establish a permanent BIF (Attachment B). The Motion also directed staff to provide a program update that considers, but is not limited to: A) resources necessary to maintain the permanent BIF and B) culturally competent outreach and inclusive technical assistance to adequately support affected businesses.
Metro will deliver an unprecedented program of transit construction over the next decade. BIF has proven to be one of Metro’s most effective tools for keeping small businesses open through that construction, and clear eligibility criteria allow Metro to deploy it consistently and strategically. This report recommends adoption of a BIF Project Eligibility Policy, informed by ten years of experience.
The Policy also supports faster project delivery. Through a new Project Acceleration Partnership, BIF eligibility can extend to shorter-duration projects, such as Bus Rapid Transit (BRT), where the local jurisdiction commits to streamlining approvals that shortens construction. Qualifying construction acceleration strategies can reduce the duration of disruption for businesses allowing an earlier return to normal customer access. This report also responds to Director Solis’s request for information on how Metro will support businesses along the North Hollywood to Pasadena BRT Project and other BRT corridors.
Background
BACKGROUND
At its October 2014 meeting, the Board approved Motion 57 by Directors Molina, Dupont-Walker, Ridley-Thomas and Garcetti (Attachment C) authorizing the CEO to establish a special BIF pilot program for small businesses, including micro businesses, located along the Crenshaw/LAX Line, the Little Tokyo area along the Regional Connector and Section 1 of the Purple Line Extension due to the forecast schedule of sustained construction activity of at least six years. The Board subsequently authorized the expansion of the program to additional major rail construction projects, including the 2nd/Broadway segment of Regional Connector, Sections 2 and 3 of the Purple Line Extension, and most recently the East San Fernando Valley Light Rail Project.
The BIF was established to provide financial assistance to qualifying small businesses that experience revenue loss resulting from the duration of significant Metro construction impacts. Historically, the program has primarily supported businesses affected by major rail projects involving sustained, concentrated construction activities over extended periods.
At the conclusion of eight years of construction and opening of the Crenshaw/LAX rail project, now the K Line, program data indicated that 181 of the 240 businesses that received BIF grants, or 75%, remained in business. Similarly, following eight years of construction associated with the Regional Connector, 20 of the 33 businesses receiving BIF grants in the Little Tokyo area of the project, or 60%, remained in business.
These outcomes are notable given the duration of construction associated with these major rail projects. According to the Commerce Institute, an independently funded organization that publishes research, trends and advice for small business owners, broad data shows survival rate declining from approximately 76%-80% in the first year to 36%-47% after five years. This is generally consistent with Los Angeles County data indicating that fewer than half of new businesses remain active due to various management and environmental factors. Against these broader benchmarks, the fact that 60% -75% of BIF-assisted businesses along the Crenshaw/LAX and Little Tokyo portion of the Regional Connector corridors remained open following approximately eight years of construction demonstrates positive business retention outcomes among BIF participants.
Feedback from participating business owners reinforces these results. Owners report that BIF provided critical financial support during periods of significant construction disruption, and some report that they would have closed without a BIF grant. The program outcomes and participant feedback demonstrate the value of BIF as a construction mitigation tool.
Based on the experience and outcomes of the pilot program, at its May 2023 meeting, the Board approved establishment of a permanent BIF. Staff subsequently provided a March 2024 update outlining culturally competent outreach and inclusive technical assistance to adequately support affected businesses, next steps for the BIF Assessment and development of a BIF Project Eligibility Policy.
In support of Metro’s broader construction mitigation efforts, Eat-Shop-Play (ESP) provides a targeted strategy to support small businesses affected by Metro’s construction activities. The program objective is to mitigate reduced customer traffic by dedicating outreach and resources to promote local shops through marketing tools and promotional initiatives to drive community engagement. Originally launched as a pilot in July 2021, ESP initially helped brick-and-mortar businesses near existing major transit stops build an online presence during the COVID-19 pandemic.
In May 2026, Director Solis requested that staff provide an update on how Metro could support businesses that may experience impacts during construction of the North Hollywood to Pasadena BRT Project. This report responds to that request by providing information on Metro's construction mitigation programs, including Eat Shop Play (ESP), the proposed new BIF policy, and the resources and services available to support businesses along North Hollywood to Pasadena and other upcoming BRT project corridors.
Discussion
DISCUSSION
Metro currently implements three complementary construction mitigation programs designed to support small businesses affected by Metro construction:
1. Business Interruption Fund (BIF) provides financial assistance to qualifying small businesses that demonstrate revenue loss resulting from eligible Metro construction impacts.
2. Business Solution Services (BSS) provides technical assistance and individualized support to businesses.
3. Eat Shop Play (ESP) provides marketing and promotional assistance to help businesses remain visible and connected with customers during construction.
Each program provides a different type of assistance, allowing Metro to deploy business mitigation strategies that are responsive to the nature, duration, and extent of construction impacts.
The BIF Project Eligibility Policy
Staff recommend two pathways for BIF eligibility on future Metro construction projects:
Pathway 1: Standard Eligibility. A project, or a defined portion of a project, qualifies when it meets both of the following criteria:
a) Type of Construction Impacts: Projects that include concentrated construction at station sites and along alignments, such as: extended lane closures, turn restrictions, directional closures, or full streets closures; K-rail installation and fencing treated with privacy screens or sound wall panels in front of or adjacent to businesses; building station structures; tunneling; drilling; piling and decking work; extensive relocation of utilities; major rearrangements of curbs, gutters and sidewalks over at least one city block; or street resurfacing and paving over one city block or full intersection.
b) Duration of Construction Impacts: Projects with construction sites adjacent to businesses where discrete, meaning individual construction work sites, construction impact activities (as defined above) are expected to exceed 2 months*. Duration refers to the duration of construction activities at a local area on the project, and not the duration of the entire project.
*The 2-month threshold is based on historical BIF activity for meaningful revenue loss with one month as the lowest common denominator for analysis of comparable financial documentation.
Standard Eligibility may apply to an entire project or to a defined portion of a project, depending on where qualifying impacts occur.
Pathway 2: Project Acceleration Partnership. Where construction is shorter in duration, as is typical of Bus Rapid Transit (BRT) projects, BIF eligibility may be extended when the local jurisdiction partners with Metro to streamline project delivery beyond what is already allowed via cooperative agreements or pending changes to agreements. The streamlining measures should shorten construction and reduce costs, such as approving extended street closures, expediting permit approvals, or expanding work hours. Eligibility applies to the area directly affected by the streamlining.
Staff will determine BIF eligibility for each Metro construction project before construction begins and report determinations to the Board in the annual BIF update. Figure 1 summarizes the two pathways, and Figure 2 shows their anticipated application to upcoming projects.
Figure 1: BIF Eligibility Pathways
Figure 2: Anticipated Application to Upcoming Projects
Together, the two pathways direct BIF to the construction conditions that cause meaningful revenue loss and create a shared incentive for Metro and its city partners to shorten construction. Under either pathway, individual businesses must continue to satisfy BIF program eligibility requirements, including demonstrating qualifying construction-related revenue loss, before receiving a grant.
BIF Assessment
The BIF Assessment was advanced to inform implementation of the permanent BIF and development of the BIF Project Eligibility Policy. The Assessment examined Metro’s historical BIF experience and anticipated future construction program to evaluate the potential number of businesses that may be impacted, projected BIF funding needs, and program governance considerations.
The Assessment focused primarily on five major rail transit projects with planned construction during the 2025-2035 period: the East San Fernando Valley Light Rail Transit Project IOS, K Line Extension to Torrance, Southeast Gateway Line IOS, Eastside Extension IOS, and Sepulveda Transit Corridor Phase 2 LPA (IOS).
As a supplemental analysis, the Assessment also reviewed construction conditions on three upcoming Bus Rapid Transit (BRT) projects.
Project and Business Corridors Assessment
The Assessment evaluated business corridors associated with the five major rail projects to estimate the potential number of small businesses that could experience construction impacts and inform future BIF funding needs. The analysis considered business size, revenues, industry, and socioeconomic characteristics, including the location of businesses within Equity Focus Communities (EFCs).
Using BIF program eligibility criteria and available business data, supplemented by observational surveys of businesses adjacent to project corridors, the Assessment identified approximately 3,175 potentially eligible businesses across the five rail projects during the 2025-2035 study period.
These estimates are intended for program planning and forecasting purposes and do not constitute a determination of individual business eligibility for BIF.
Assessment of Projected Annual Budget Allocation
To evaluate the resources necessary to maintain the permanent BIF, the Assessment used historical program experience to forecast potential funding needs associated with the five rail projects. The analysis considered the estimated number of potentially eligible businesses, historical participation in BIF, anticipated grant amounts, duration of assistance, and periods when multiple major projects are expected to be under construction concurrently.
Historical program data showed that approximately 30% of eligible businesses within the Crenshaw/LAX impact area received BIF grants. Because the composition and construction conditions of future project corridors may differ, the Assessment tested a range of scenarios to account for variations in participation, grant amounts, duration of assistance, inflation, and other factors.
The analysis found that projected BIF funding needs for the future rail projects evaluated in the Assessment are expected to increase during periods when multiple major rail projects are under construction simultaneously. Under the range of scenarios evaluated, projected annual expenditures for these five projects remained below $10 million in any given year. The Assessment forecasted BIF funding needs for these five future rail projects and did not include existing projects already receiving BIF assistance or administrator costs. Accordingly, the projections should not be interpreted as a forecast of total BIF expenditure across all Metro construction projects.
Figure 3: BIF Cost Projections for 5 upcoming rail projects by Scenario and Recent Actual Program Expenditures ($ in Millions) by Calendar Year
*Figure 3 includes total actual BIF expenditures for calendar years 2025 and 2026 to date. Unlike the Assessment projections, the actual expenditure includes the BIF Fund Administration fee and BIF assistance for existing projects, including Crenshaw/LAX, D Line Sections 1, 2, 3 which were not among the five future rail projects assessed in the study’s cost projections. Accordingly, the actual expenditures are provided as recent program context and are not intended as a direct comparison to the study’s projected scenarios.
** Value to date
The Assessment concluded that projected BIF funding needs for the future five rail projects through 2035 remain below $10 million in any given year under the scenarios analyzed. Recent actual expenditures have exceeded the Assessment’s high estimate reflecting expenditures associated with existing projects, including D Line activity, that were not part of the Assessment projections. Staff will continue to monitor program spending closely, and total BIF funding needs will continue to be addressed through Metro’s annual budget process.
Leveraging BIF to Accelerate BRT Delivery
The Assessment reviewed three BRT projects anticipated to be under construction during the study period: the Vermont Transit Corridor, North Hollywood to Pasadena BRT, and Metro G Line Improvements.
BRT construction differs from rail. Rail projects involve concentrated, multi-year construction at station sites and along alignments. BRT construction adjacent to businesses consists primarily of curb, gutter, sidewalk, roadway, and station platform work lasting approximately four to eight weeks per site, typically completed in multiple traffic control phases.
Expanding BIF to shorter-duration construction would increase program administration costs, particularly given the historically low level of claims. Pairing this expansion with permit streamlining helps offset those costs while also shortening the duration of construction impacts on businesses. This approach allows Metro to provide additional business support while reducing overall construction time and cost.
Local permit conditions may influence the duration of BRT construction. When a city commits to streamlining approvals beyond existing cooperative agreements, Metro can complete construction faster and at lower cost. The Project Acceleration Partnership recognizes that commitment by extending BIF eligibility to businesses in the affected area. The partnership benefits every party:
• Businesses: A shorter construction period means less disruption and a faster return to normal customer access, with BIF available during the most intensive work.
• Cities: Local jurisdictions deliver a completed project to residents sooner, with fewer months of construction on local streets.
• Metro: Fewer traffic control phases and shorter schedules reduce construction cost and schedule risk.
Staff will pursue Project Acceleration Partnerships first on the North Hollywood to Pasadena and Vermont corridors. Eat Shop Play marketing support will be available on all BRT corridors, as described below.
Eat Shop Play (ESP) is Metro’s construction mitigation and marketing program designed to support local businesses located near active Metro construction. Businesses within one-quarter mile of participating construction projects are eligible to enroll. Currently, ESP is active in the D Line Subway Extension, East San Fernando Valley Light Rail Transit, North Hollywood to Pasadena Bus Rapid Transit, and Vermont Transit Corridor projects, with the program scheduled to launch later this year in the Southeast Gateway Line Project. The program follows construction milestones and is intended to help businesses remain visible, accessible and connected to customers while construction is underway.
The program offers:
• Promotional Support: Opportunities to be featured in print and digital media "spotlights" through a combination of social media campaigns, banners on construction fencing, bus and rail ads, email promotions, editorial features online, and more.
• Visibility: Access to signage and collateral to help keep business visible while construction is underway.
• Marketing Assistance: Free virtual marketing webinars and coaching to help manage online presence and other marketing topics.
ESP has a history of supporting businesses along Metro construction corridors. During the Crenshaw/LAX project, more than 150 businesses received free marketing assistance with campaigns including social media, business spotlights and customer promotions to encourage residents to continue supporting local businesses. More recently, the reimagined ESP program has expanded its offerings beyond promotional campaigns to offer a long-lasting impact on businesses by running digital marketing education webinars paired with one-on-one marketing coaching.
ESP is offered across Metro construction projects and scales efficiently to shorter-duration work such as BRT, because it directly addresses customer awareness, business visibility, and access. Paired with the Project Acceleration Partnership, ESP gives Metro a complete set of tools for BRT corridors: marketing and visibility support throughout construction, and financial assistance where cities partner with Metro to accelerate delivery through permit streamlining.
Determination_Of_Safety_Impact
DETERMINATION OF SAFETY IMPACT
Approval of this item will not impact the safety of Metro’s customers or employees.
Financial Impact
FINANCIAL IMPACT
There is no immediate financial impact to approving this recommendation.
Impact to Budget
Board approval of this recommendation has no immediate impact on the FY27 budget. The funding for the administrative costs is provided through Measures R and M Administration funds. Funding for BIF in future years will be addressed through the annual budget development process. BIF eligibility established through a Project Acceleration Partnership will be funded within the annual BIF budget, and staff will document the schedule and cost savings associated with each partnership.
Equity_Platform
EQUITY PLATFORM
BIF directly supports the small and microbusinesses most affected by Metro construction. As of July 31, 2026, BIF has awarded more than $57.4 million to nearly 600 businesses. Approximately 66% of participating businesses are owned by individuals identifying as Black or African American, Hispanic or Latino, or Asian, and approximately 56% of grant dollars have gone to minority- and women-owned businesses (Attachment D).
The five rail projects planned through 2035 traverse 81 Equity Focus Community census tracts, with the highest concentrations of affected businesses along the East San Fernando Valley and Eastside Extension corridors. Metro supports these communities with one-on-one technical assistance through Business Solution Services, promotional support through Eat Shop Play, grants of up to $60,000 per impact year, and a $1,500 Presumptive Eligibility Award for street vendors and microbusinesses. All outreach, applications, and workshops are offered in English and Spanish, with additional languages provided based on community needs.
The Project Acceleration Partnership extends BIF to businesses on shorter-duration projects and shortens the time communities experience construction impacts. Staff have not identified any inequitable impacts from adoption of the Policy.
Vehicle_Miles_Traveled _Outcome
VEHICLE MILES TRAVELED OUTCOME
VMT and VMT per capita in Los Angeles County are lower than national averages, the lowest in the SCAG region, and on the lower end of VMT per capita statewide, with these declining VMT trends due in part to Metro’s significant investment in rail and bus transit.* Metro’s Board-adopted VMT reduction targets align with California’s statewide climate goals, including achieving carbon neutrality by 2045. To ensure continued progress, all Board items are assessed for their potential impact on VMT.
While this item does not directly encourage sharing a ride, walking, or rolling, Metro’s construction mitigation programs support transit-adjacent businesses and communities during construction. Supporting the retention of businesses located near transit has the potential to reduce VMT by helping maintain access to goods, services, and employment opportunities that can be reached by transit, walking, or rolling. Because the Metro Board has adopted an agency-wide VMT Reduction Target, and this item generally supports the overall function of the agency, this item is consistent with the goals of reducing VMT.
*Based on population estimates from the United States Census and VMT estimates from the highway performance monitoring system data between 2001-2019.
Implementation_of_Strategic_Plan_Goals
IMPLEMENTATION OF STRATEGIC PLAN GOALS
Approval of this item aligns with Metro Strategic Goal 3 - Enhance communities and lives through mobility and access to opportunity.
BIF and Metro’s complementary construction mitigation programs support this goal by helping small businesses and local economies withstand disruptions associated with construction of Metro transportation infrastructure. Supporting businesses located along Metro project corridors also contributes to the long-term economic vitality of the communities Metro serves.
Alternatives_Considered
ALTERNATIVES CONSIDERED
The Board could decline to adopt the Policy and continue determining BIF eligibility on a project-by-project basis. Staff do not recommend this alternative. Case-by-case determinations create uncertainty for businesses and local jurisdictions and make program costs harder to forecast.
The Board could adopt the Policy without the Project Acceleration Partnership, limiting BIF to projects that meet the Type and Duration criteria. Staff do not recommend this alternative. It forgoes the opportunity to use BIF to secure permit streamlining that shortens construction and reduces project costs, and it leaves businesses on BRT corridors without a path to financial assistance.
Next_Steps
NEXT STEPS
Upon Board approval, staff will incorporate the BIF Project Eligibility Policy into the BIF Administrative Guidelines and apply it when evaluating future Metro construction projects. Staff will advance BIF for the Southeast Gateway Line IOS project consistent with the Policy.
Staff will engage the local jurisdictions along the North Hollywood to Pasadena BRT and Vermont Transit Corridor projects on Project Acceleration Partnerships and will report to the Board on any partnerships established, including the streamlining approvals secured and the associated schedule and cost savings.
Staff will also advance Eat Shop Play services and enhancements to support businesses along the East San Fernando Valley LRT, Southeast Gateway Line IOS, Vermont BRT, and North Hollywood to Pasadena BRT project corridors.
Staff will provide annual updates to the Board on BIF, Eat Shop Play, and Project Acceleration Partnership outcomes.
Attachments
ATTACHMENTS
Attachment A - BIF Project Eligibility Policy
Attachment B - Motion 17
Attachment C - Motion 57
Attachment D - BIF Diversity Portfolio Ending July 31, 2026
Prepared_by
Prepared by: Angela Winston, Director, Business Interruption Fund & Business Solution Services, DEOD, (213) 922-7669
Elke Campbell, Senior Executive Officer, DEOD (213) 418-3081
Michael McKenna, Deputy Chief, Program Management Officer, (213) 922-4239
Anthony Crump, Executive Officer, Community Relations, (213) 418-3292
Marisa Perez, Deputy Chief, Community Relations Officer, (213) 922-3808
Reviewed_By
Reviewed by: Nicole Englund, Chief of Staff, (213) 922-7950
Sharon Gookin, Deputy Chief Executive Officer, (213) 418-3101
