HomeMy WebLinkAbout11 18 2013 EDA Report 8B
4646 Dakota Street SE
Prior Lake, MN 55372
ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT
MEETING DATE: November 18, 2013
AGENDA #: 8B
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 have the EDAC also 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 TIF District 1-1, it appears that the corresponding TIF Plan
would need to be amended to include this type of program as an eligible
expenditure. This downtown redevelopment district currently has
approximately $200,000 available for property acquisition, demolition, site
improvements/cleanup and public improvements.
The façade improvement guidelines will also need to be updated and approved
in a new version.
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, Souh Lake Village or Gateway
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 at a total estimated budget of $100,000.
Upon the City Council amending TIF Plan 1-1, expenditures could be identified
for this type of program. This would require a public hearing by the council to
modify the proposed use of these funds. Another potential source would be
the General Fund Reserve, which would need council authorization. The city
may need to hire Northland Securities to modify the TIF Plan, which they did
two years ago in order to retain excess incremement in that district.
ALTERNATIVES: 1. Motion and second directing city staff to initate the necessary steps to
modify TIF Plan 1-1 to reivise the budget to include a façade improvement
grant program as an elgible expenditure, and to direct the EDAC to gauge
interest in a potential facade improvement program with recommendations
to the EDA.
2. Take no action and provide direction to staff.
RECOMMENDED Alternative 1.
MOTION: