HomeMy WebLinkAbout10 21 2013 EDA Report 8C
4646 Dakota Street SE
Prior Lake, MN 55372
ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT
MEETING DATE: October 21, 2013
AGENDA #: 8C
PREPARED BY: Casey McCabe, Community Development Specialist
AGENDA ITEM: DOWNTOWN BUILDING FACADE PROGRAM
DISCUSSION: Introduction
The purpose of this agenda item is to consider establishing a matching
grant program to encourage downtown building facade improvements
along Main Avenue, south or CR 21.
History
In 2002 the Prior Lake City Council approved a resolution establishing a
matching grant program to encourage downtown building façade
improvements. The program was initially funded with $150,000 from a Tax
Increment Fund to provide matching grants to business owners who wished
to make facade improvements. Due to demand, the City Council
authorized an additional $134,000 in 2004 to provide facade grants to
eligible businesses.
To be eligible for grant assistance, all improvements were required to be
approved by City staff and be consistent with the design standards for the
downtown area. Only actual verified costs were reimbursed. The program
guidelines established a maximum grant amount of $25,000 and a
minimum grant amount of $5,000. At a minimum, the applicant must
provide a 1:1 match to the city’s grant (i.e., total project cost must be
$50,000 or more to receive a $25,000 grant).
Current Circumstances
As a result of comments received during the 2013 Prior Lake Business &
Industry Forum related to downtown redevelopment, the EDAC has
recommended the EDA consider establishing a matching grant program to
encourage downtown building façade improvements for Main Avenue
properties located south of CR 21.
If the EDA and City Council choose to allocate funds for a new round of
building facade improvements, the EDAC recommended all existing
commercial properties along Main Avenue, not previously assisted, would
be eligible for a rehabilitation grant, provided funding was available.
When the facade improvement program was approved in 2002, a
qualification was included that required a property to be used primarily for
retail, office or other uses permitted in the downtown district to be eligible
for funding. Because of this qualification a few commercial properties,
primarily automotive repair businesses, were deemed ineligible for a
façade improvement grant. The City Council minutes from 2002 indicate
the Council was reluctant to provide grant funding to those businesses that
were not consistent with the long range plans for the downtown area. The
EDAC feels that if a façade improvement program is pursued, all
businesses in the target area should be eligible.
Conclusion
With the direction of the EDA, the EDAC will visit with existing Main Avenue
commercial property owners south of CR 21 to gauge interest in a potential
façade improvement program. The Main Avenue properties south of CR
21 would be the primary target area for improvements; however, the EDA
may also wish to poll existing Main Avenue businesses north of CR 21 to
see if they would also have interest. The EDA may also wish to consider
improvements to all downtown commercial properties or just those that did
not receive grant funding with the 2002 program.
ISSUES: If the EDA wishes to pursue a façade improvement program, and use the
funding from the expired TIF District, staff will need to research whether
and what steps would be required.
The façade improvement guidelines will need to be formalized and
updated.
The EDA may also want to consider whether other commercial structures
should be considered for eligibility and whether they must be located in the
downtown. For example what if Velishek’s requested façade improvement
funding?
FINANCIAL Staff estimates the City would provide three or four matching grants at a
IMPACT:
maximum amount of $25,000 each. While the staff will have to do more
research, we believe that the EDA could utilize a portion of the $200,000
from the expired Downtown TIF District. We believe that such action would
require a public hearing by the city council to modify the proposed use of
these funds which at this time are limited to land acquisition, demolition,
site cleanup and public improvements.
Another potential source would be the General Fund Reserve. The city
council would have to authorize such action.
ALTERNATIVES: 1. Motion and second directing the staff to confirm funding source
availability and if so, directing the EDAC to gauge interest in a potential
facade improvement program and return to the EDA with
recommendations.
2. Take no action and provide direction to staff.
RECOMMENDED Alternative 1.
MOTION: