Request for Committee Action
A briefing memo explaining the purpose, background, and impact of the requested action.
Great Streets Facade Improvement Matching Grant Program updates and Cultural Districts Interior Improvements Pilot Program guidelines (RCA-2021-00586)
ORIGINATING DEPARTMENT
To Committee(s)
| # | Committee Name | Meeting Date |
|---|---|---|
| 1 | Business, Inspections, Housing & Zoning Committee | May 18, 2021 |
Action Item(s)
| # | File Type | Subcategory | Item Description |
|---|---|---|---|
| 1 | Action | City Policy | Adopting updated program guidelines for the Great Streets Facade Improvement Matching Grant Program. |
| 2 | Action | City Policy | Approving program guidelines for a Cultural Districts Interior Improvements Pilot Program. |
Previous Actions
2020-00446 - Cultural Districts ordinance
2020-00584 - Great Streets Program changes
2020-00088 - Great Streets Program Eligible Areas
2020-00024 - Small Business Program Review
2017-01284 - Great Streets Program Areas Categorization
2017-00366 - Great Streets Program changes
On March 27, 2009, the City Council adopted target categories for commercial nodes, corridors, activity centers, and LRT station areas, as defined by The Minneapolis Plan for Sustainable Growth.
On April 27, 2007, the City Council created the Great Streets program to provide resources to revitalize and sustain neighborhood business districts.
Ward / Neighborhood / Address
| # | Ward | Neighborhood | Address |
|---|---|---|---|
| 1. | All Wards |
Background Analysis
This report includes recommendations to update the Great Streets Façade Improvement Program guidelines and approve program guidelines for a Cultural Districts Interior Improvements Pilot Program, which would be administered alongside the Façade program. These updates to the Façade program are informed by the Small Business Program review conducted by CPED staff in late 2019. The Cultural Districts Interior Pilot Program stems from an appropriation in the City budget to support Cultural Districts. Both the updates and the pilot program aim to align with current City policies such as the 2040 Plan, the Strategic Racial Equity Action Plan (SREAP), and the Cultural Districts ordinance.
1. Great Streets Facade Improvement Matching Grant guideline updates
The Great Streets Program began in 2007 to provide funding tools for commercial district revitalization. The City partners with community organizations to implement the program across the city. Great Streets resources are limited to the geographic areas in the City that are guided for commercial uses in the City’s comprehensive 2040 Plan.
In addition to eligibility, the program categorizes the eligible areas in one of two categories: eligible and priority. The City updated these categories last year to align with the 2040 Plan. With this report, staff recommends updating the guidelines of the Facade Improvement Matching Grants in terms of the matching investment requirements and maximum grant amounts.
The Great Streets map shows all the program areas in blue, orange, or purple. The blue parcels are eligible areas. The parcels in orange are priority areas and the purple parcels are Cultural Districts.
The match amounts and maximum grant amounts for the Façade Improvement Matching Grant Program would be updated as follows:
|
Previous Guidelines |
Current Guidelines |
Proposed Guidelines |
|
Monitor areas – 1:2 public to private match, maximum grant amount $5,000 |
Eligible parcels – 1:1 public to private match, maximum grant amount $5,000 |
Eligible parcels – 1:2 public to private match, maximum grant amount $5,000 |
|
Support areas – 1:1 public to private match, maximum grant amount $5,000 |
Priority parcels - 1:1 public to private match, maximum grant amount $7,500 |
Priority parcels - 1:1 public to private match, maximum grant amount $7,500 |
|
Intervene areas – 1:1 public to private match, maximum grant amount $7,500 |
Cultural District parcels are included in priority areas |
Cultural District parcels - 1:0.5 public to private match, maximum grant amount $10,000 |
Under the proposed guidelines, for example, businesses located on Eligible parcels could apply for a $5,000 grant with a private investment of $10,000. For Priority parcels, costs are split between the grant and private funds. For businesses located in Cultural Districts, a $10,000 grant would require $5,000 in private funds.
Staff is also recommending that the current requirement for businesses to obtain two bids for projects costing over $1,000 be modified to projects costing over $5,000. This recommendation comes from the Small Business Program Review and is based on feedback received from partner organizations about the challenge some businesses have obtaining two bids for smaller projects.
2. Cultural Districts Interior Improvements Pilot Program Guidelines
The City appropriated $200,000 in one-time funding for this pilot program to help fund improvements to the interior of commercial buildings in Cultural Districts. Commercial buildings in these areas have faced intentional public-policy choices and market failures that have resulted in lower property values, less commercial demand, and deferred maintenance. This pilot aims to reduce barriers to maintaining the commercial building stock and financing interior improvements for small business tenants. The program is structured as a forgivable loan with deferred payments and zero interest, given the City’s statutory authority for economic development activities.
Building owners and commercial tenants (with property owner’s approval) can apply for the assistance if:
- They are located within a designated Cultural District AND,
- The interior improvements are for a commercial business or commercial building.
- For-profit and not-for-profit entities are eligible to apply, as long as the funding is used for a commercial building. Most commercial uses are retail and office; however, other uses may qualify, such as daycare centers. Mixed-use buildings are eligible for the commercial portion of the building.
The terms of the loans include:
|
Loan Amount: |
Up to $10,000 per building. All loans must be matched on a 1: 0.25 basis. (e.g. $10,000 in City loan dollars requires $2,500 in private investment) |
|
Interest: |
0% |
|
Debt Forgiveness: |
No debt forgiveness during the first year. At end of the first year, debt is forgiven if the business remains open, in place, and in good regulatory and legal standing with the City. If the business or property owner sells the business/property without the consent of the City, the loan would be due on sale. |
|
Payments: |
No payments for one (1) year. If not forgiven after first year, loans are due in full. |
|
Collateral: |
Unsecured. No personal guaranty nor mortgage required. |
|
Uses of Funds: |
The following are examples of eligible interior improvements: •Mechanical systems •Plumbing •Lighting •Walls, ceilings, floors •Windows •Painting •Other items that are viewed as necessary to facilitate interior improvements to the building |
Staff will collect demographic information on applicants and borrowers on a voluntary basis.
If the Cultural Districts Interior Improvements Pilot Program guidelines are approved, staff will include the program as a component of the Notice of Funding Availability (NOFA) for the Great Streets Façade program, which invites community-based organizations to apply for funds to administer the program. Eligible administering organizations include community development corporations, business associations, neighborhood organizations, and other entities that have demonstrated capacity to perform the work, such as staff devoted to business development activities or staff experience providing assistance to businesses and managing contracts. Organizations lacking this experience and capacity are encouraged to submit a proposal in partnership with an organization that does have this staff capacity.
Organizations administering these programs are responsible for activities such as spearheading the marketing effort, deciding on awards, assisting property and business owners with all steps of the application and disbursement process, keeping records, tracking each award, reviewing applications for eligibility and providing the City with all required documentation. As with the Façade program, organizations administering the Interiors pilot program can receive an administration fee of 15% of its contract value to cover its costs of administering the program.