"We need every nickel and dime that we can get. But by us not applying - I can't believe we would miss that opportunity," said Noel Gallo.
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Oakland City Councilmember Noel Gallo says the city is currently suffering through multiple crises.
The worst, he says, he's ever seen in his lifetime.
"By the city administration making excuses that we didn't apply on time or submit the proper paperwork - that's just an excuse that the residents and businesses are not going to accept," Gallo said.
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State officials say Oakland blamed their late application on a technical issue.
A spokesperson for the city says they are reviewing everything that went wrong to try and prevent something like this from happening again.
Oakland City Council President Nikki Fortunato Bas says they're also actively exploring other grants and partnerships.
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"We are incredibly committed to getting the resources that we need. And we do have a strong proposal that we can shop around to other partners to get the resources that Oakland's business community needs," she said.
Whatever the reason, the failure is little comfort to many business owners in the city.
"It is very frustrating, upsetting. Especially during this very difficult time for our small businesses," said Carl Chan.
VIDEO: Thieves in SUV hook chain to Oakland store gate, drive away to yank it open
VIDEO: Thieves in SUV hook chain to Oakland store gate to break in
Chan is a community leader in Oakland's Chinatown. He says many in this community believe the Oakland Police Department would have greatly benefited from the extra cash.
Chan introduced us to Shirley, who works at a nearby restaurant. She spoke to us with the help of Chan's translation and said crime has gotten so bad in this area that her restaurant closes hours early.
"They are so afraid. The employees are afraid, and so they are having a tough time and making a tough decision," said Shirley Zhong.
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Some city leaders say they're going to petition Governor Newsom's office to try and get Oakland some of the money it missed out on.
A plan Chan supports, and one he hopes isn't too little too late.
"When we're hearing other cities are getting millions and millions of dollars, and we missed out? Are you kidding me?"