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The City of Santa Ana could yank money from the promotion of downtown businesses if those companies sue over parking, traffic or other disruptions caused by construction of the OC Streetcar Project that runs through one of the city’s busiest commercial areas.

The streetcar broke ground Nov. 30 and has been a passion project for Santa Ana Mayor and county Transportation Agency director Miguel Pulido, who pushed it for years as an engine of economic growth. But critics of the project say the three-year construction period along 4th Street would disrupt the area’s storefronts with lane closures, take parking spaces away from family households, and drive gentrification by pricing mostly Latino families out of their homes and commercial spaces.

Madeleine Spencer, Executive Directing Consultant for the Santa Ana Business Council, said a clause in a funding contract with the city places an “embargo” on the 796 downtown merchants the Business Council represents and limits them “from litigating against any damages and or harm that may be caused or related to the OC Streetcar Project.”

The contract is for an annual $100,000 allocation from a city “Downtown Merchants Fund” to the Business Council, which then disperses the money to things like marketing, events, and training for business owners in the area. A breach of the streetcar clause could prompt the city to withhold all of the funding.

Former Councilwoman Michele Martinez publicly criticized a broader version of the streetcar clause in December 2017, in which merchants who are part of the Business Council “would also not be able to participate in any activities opposing the OC Streetcar or opposing any issues or activities related to the streetcar project” such as a public protest.

“This (language) goes against everything we believe in regarding transparency,” said Martinez, who requested that section of the clause be removed. In the current version of the contract, that language is no longer there, though City Attorney Sonia Carvalho didn’t respond to inquiries of whether or not merchants under the Business Council can now speak out publicly.

“In the long term, the Santa Ana Business Council recognizes the benefit of multi-modal transit and building a networked city. In the short term … we are setting aside funds to assure some small loans to assist with mitigation,” said Spencer, who added that the small loans would only go to businesses in most need during construction. Spencer publicly requested in a Voice of OC op-ed last year the city and OCTA look into a plan to mitigate potential disruptions to downtown business.

OCTA spokesman Eric Carpenter said in an email the agency won’t have a good idea of the construction schedule or potential impacts until after the start of the new year.

But an OCTA webpage for the streetcar explicitly states that parking “will be impacted” and “construction lane closures will be required.”

“As of now, there’s no road closure or detour information for construction-related activities. Utility companies are working to relocate utilities where needed and some temporary lane reductions have been required. But that work is mostly being done without interfering with car or pedestrian traffic,” Carpenter said. The streetcar is set to begin operating in 2021 and will run just over four miles from Santa Ana’s train station to Garden Grove’s.

Spencer said despite potential disruptions caused by the streetcar construction, the businesses along 4th Street will remain open.

“We have an amazing and resilient group of merchants in our downtown,” Spencer added. “We know that if we all work together we can weather any storm and come out again with the sun shining on everyone.”

Brandon Pho is a Voice of OC intern. Contact him at bpho@voiceofoc.org or on Twitter @photherecord.