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Racine business owners file suit in federal court over being denied COVID-19 grant money

Posted at 9:19 PM, Feb 16, 2021
and last updated 2021-02-16 23:48:44-05

CITY OF RACINE — A Racine small business is filing legal action against the City of Racine and its mayor, alleging they were denied Small Business Emergency Assistance grants due to their participation in a protest at the state capitol in April of 2020.

Dimple and Denis Navratil, the owners of Dimple's Fine Imports, allege the city and Mayor Cory Mason violated their First and Fourteenth Amendment rights. Lawyers representing the business owners are asking for an award of damages and other expenses.

As TMJ4 News reported last June, the Navratils applied for CARES Act Small Business Emergency Assistance grants twice and were denied both times. Dimple said when she pressed the mayor on the reasoning as to why they were denied, she was told it was a compliance issue.

"He told me it had to do with compliance. I said, 'what compliance? My store was closed until Gov. Evers told me I can open,' and he said 'no, it was about being at the rally,'" Dimple told TMJ4 News then.

RELATED: People from across Wisconsin rally at State Capitol to protest 'Safer at Home' extension

The rally was held to protest against Gov. Tony Evers' extension of Wisconsin's 'Safer at Home' order.

TMJ4 initially interviewed Denis at the rally, he was wearing a mask and socially distancing himself from others in the crowd. During the initial interview, Denis said he was attending the rally to support opening the state, but in a safe way.

"I think you can care about both things at the same time," Denis said at the time.

According to Mayor Cory Mason last summer, the small business grants were given out through a competitive grant process. During the two rounds of grants, the city received 357 applications totaling almost $3 million in requests. Mason said they had a total of $900,000 to give out, which went to 164 businesses.

A spokesperson for the city on Tuesday referred TMJ4 News to a statement sent by the city to TMJ4 News last year. It reads as follows:

“The small business grants were given out through a competitive grant process. These were discretionary grants, and no one was entitled to funding. Between the two rounds of grants, the City received 357 applications totaling almost $3 million in requests, and we had a total of $900,000 to give out, which went to 164 businesses. That means we had funding for less than half of all the applicants. Many great City businesses didn’t get funded because there were simply not enough funds to go around. However, if an applicant was in violation of laws or city ordinance, not conforming to zoning requirements, or hadn’t paid their taxes, that applicant was less competitive. As Mayor, it is my duty to protect the public health of our City's residents. While I certainly support the rights of free speech and assembly, I cannot in good conscience send scarce City resources to a person or business that willingly jeopardized public health, especially when they were competing with other businesses who were not as flagrantly violating safety measures. If an applicant was openly violating the statewide "Safer at Home" order and the public health emergency under which the City was operating to help mitigate the spread of coronavirus, that applicant would compete less favorably. For instance, participating in mass gatherings outside of our community, such as a rally with a thousand or more individuals at the State Capitol, only served to put City residents at unnecessary risk, and was certainly factored into the funding determinations. When it comes to disbursing discretionary funds aimed at helping businesses who were sacrificing to protect public health, the City is not going to reward business owners who took reckless behaviors that risked the health of our community.”

Read their lawsuit below:

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