The Denver City Council on Monday approved allocating $1.7 million in American Rescue Plan Act money to the Downtown Denver Partnership to address ongoing “negative economic impacts of the COVID-19 pandemic.”

The council specifically wants the group to focus on retail sectors in downtown.

Three councilmembers questioned the contract, worrying that using the federal money may be “inappropriate,” as businesses are no longer recovering from the COVID-19 pandemic.

Some said ongoing construction, rather than lingering effects of the COVID-19 pandemic, is hurting businesses on the 16th Street Mall.

Ultimately, the council approved the measure, 10-3, with Councilmembers Sarah Parady, Shontel Lewis and Serena Gonzales-Gutierrez voting against awarding the contract to the group.

Money for the contract comes from Denver’s dwindling ARPA money.

Parady does not believe businesses on the 16th Street Mall are hurting because of the pandemic, but rather because of ongoing construction on the mall that has heavily affected foot traffic.

Because of this, she called the contract an “inappropriate” use of the federal funds.

“We have dedicated $6.4 million in the last two years for downtown business recovery and construction impacts of the 16th Street Mall Project,” she said. “The analysis that I’ve seen from city agencies shows that what’s happening on the 16th Street Mall now is no longer a product of COVID-19, but rather a product of the ongoing construction project on the mall.”

Further, many areas of downtown have already seen strong recovery as the effects of the pandemic have subsided, Parady said. The 16th Street Mall is “uniquely lagging” in its recovery, despite some stretches reopening in previous weeks.

Previously, Downtown Denver Partnership officials said they were optimistic the contract would be approved even after the vote on it was delayed during the Aug. 19 meeting.

Kourtney Garret, the group’s CEO, earlier said she recognized the council was taking time to properly assess whether the money could be used, as ARPA money has a lot of strings attached to it, for parts of downtown recovery.

Lewis’s comments broadly echoed Parady’s, but she dove into some of the financial details of the $1.7 million contract.

Of the total $1.7 million, $430,000 will go to patio and façade improvements, $380,000 is for retail activation — including giving incentives to businesses to rent vacant retail space — and $735,000 has been set aside to “plan, organize and execute single and multi-block activations along 16th Street to encourage pedestrian activities and support small businesses as 16th Street reopens,” according to a city presentation.

The rest was set aside for administrative purposes.

This breakdown perplexed Lewis.

“We’ve heard directly from small businesses about what they need, and they need direct dollars because they’ve lost a lot of foot traffic due to construction,” Lewis said. “I will be a no-vote. I do support small businesses. I do not think this is the strategy that we should be employing to give them the resources they need.”

Councilmember Kevin Flynn disagreed and characterized voting against the contract as unfair to businesses. These small businesses on the 16th Street Mall have been heavily affected by the construction, and to deny them would leave businesses wanting of aid they deserve, he said.

“This particular contract has been in a pipeline for quite some time and there are small businesses that are hurting right now… I think it’s an appropriate use of the ARPA of dollars,” he said. “The impacts on downtown are directly related to the effects of the pandemic, but more importantly these small businesses are being directly impacted by our work on the 16th Street Mall, which is quite extensive and taking quite a long time.”